Management ACCOUNTING

6) A special Order can be acknowledged at

- Below marginal cost

- Below total cost and above marginal cost
- Below fixed cost
- Above total cost

11) From the perspective of cost allocation , Service department costs are:

- Generally treated as period costs rather than product costs

- Reported as selling and administrative expenses on the income statement.
- Eventually applied by the user departments to the units produced
- Seldom found in manufacturing organizations

13). The following is true about activity- based costing

- It is a two stage allocating system that allocates costs to activities and then to products based on
their uses
- Under this , both direct costs and indirect costs are absorbed into products using predetermined
department
- Under this standard cost system is used
- Under this budgeted costs are used

1) . The p/v ratio of a company is 40% and the margin safety is 20%. If present sales is RS 20,00,000 then break
even point in Rs is

- Rs 4,00,000
- Rs 12,00,000
- Rs 8,00,000
- Rs 16,00,000

7). The accounting statement of cash flow reports a firm's cash flow segregated into what categorical order

- Operating, investing and financing

- Investing, Operating and financing
- Financing, Operating and investing
- Financing, Investing and Operating

12). Code of ethics for accounting professionals is based upon:

- Integrity
- Objectivity
- Confidentiality
- All of these

8). It is a separate performance obligation

- Assurance Warranty
- Service Warranty
- Both of these
- None of these

5). The word “relevant range” is used in cost accounting, means the range over which

- Relevant costs are incurred

- Costs may fluctuate
- Cost relationships are valid
- Cost data is available

20). An increase in variable cost per unit will lead to

 - An increase in profits
- An increase in contribution
- A reduction in contribution
- An increase in P/V ratio

16). The activity based management (ABM) refers to a set of actions that management can take, Based on
information from an ABC

- Repricing of unprofitable products

- Increasing sales volume of highly profitability products
- Process improvement
- All of these

14). which remains constant in total but reduces per unit as the volume of the production increase is known as:
The cost

- Variable cost
- Fixed cost
- Mixed cost
- Semi-variable cost

- But answer is fixed cost

9). On the basis of flexibility budget is classified into two types such as fixed budget and _ budget

- Flexible
- Semi – Variable
- Rolling
- Constant

3). Which of the following items would be subtracted from net income when using the indirect method of
calculating cash flows provided by

- Depreciation expense
- Repayment of bonds payable
- A gain of sales on land
- A loss on the sale of equipment

4). Flexible budgets, as a tool of planning and control, are superior to fixed budgets are their inability to

- Show the potential variability of various estimates used in preparation of budget

- Indicate the range which costs doesn’t change
- Indicate the range within which cost change
- None of these

10). ------ are the assets which the management expects to convert into cash within 12 months after the
balance sheet date.

- Non-current assets
- - Deferring tax assets
- Current asset
- Intangible asset

19). If an accounting firm certifies a company’s financial statement, it should have ---- to make the financial
situation look better

- Motivation
- Financial incentive
- Financial incentive
- Ethical intention
17). In general, the first budget prepared is the

- Production budget
- Direct labour budget
- Sales budget
- Overheard budget

15). The fixed manufacturing cost can be carried forward to next period as part of inventory cost in which of
the following control system: -

- Marginal costing
- Variable costing
- Unit costing
- Full costing

50)- Revaluation gain is included in

- Net profit
- Other Comprehensive income
- Other income
- Net income

51. The ABC system has advantages

A. All of these

52. As at April 1 2017 100000 shares were outstanding..

A. 125000

53. When production is less than unit sold then the income under absorption costing will be - - - - - - than the
income from variable costing

A. Lower

When production is More than unit sold then the income under absorption costing will be - - - - - - than

SAME

53. A company makes a single product and incurs fixed cost of Rs 60000 per annum

A. 6000 BEP =FC/SP - VC

54. Which of the following would be considered a cash flow item from a financing activity

A. A cash outflow to repurchase the firm's own common stock

55. The excess of AVERAGE SALES REVENUE over BESR is known as

A. Margin of Safety

56. Income from after sales services to customers would be recorded in:

A. Other income

57. Goodwill is categorised under which assets:

A. Intangible assets.

58. The costs of a single process or a series of processes that produce two or more products of significant sale
value is known as:

A. Joint product cost

59. Ethics and integrity standards are based on the following except

A. There are no clear rules or responsibilities???

60. In process further and sell now decisions, the decision should be taken based on:

A. Incremental revenues and Incremental costs.

61. As on April 1 2017 100000 shares were outstanding. On October 1 2017 50000 shares were issued. The
weighted average number of shares to be used as denominator to calculate Basic EPS is

A. 125000

62. Following information is available for Prime Ltd…..Fixed Cost 800000, variable cost 20/unit, and selling price
per unit 30/- of 200000 units. Closing stock 50000 units. What will be the profit earned during the year as per
the Marginal costing method.

63. Which of the following equations represent break even point:

A. Contribution = Fixed cost

64 Cost of factory lighting is an example of

A. Indirect cost

65. Assumptions regarding VCP graphs are

A. All of these

66. In shut down or continue decisions the factors to be considered are:

A. Contribution Margin

67. Fixed costs are fixed for a relevant range of volume for a given Budget period,Lean period, Production
period

A. All of these.

68.Banks generally see that the Debt to Equity ration is equal to or below

A. 1:1

69. The underlying difference between Absorption costing and Variable costing is the treatment of

A. Fixed Manufacturing cost

Q. 72 The term financial statement cover:

A. Profit and Loss statement and Balance sheet

73. Horizontal Analysis needs preparation of________ financial statements

A. Cash flows

74. Activity based costing is a costing technique that uses a two state allocation and these are:

A. The costs are assigned to activities and then to products based upon the use of the activities.

75. Which of the following will not cause the BEP to change

A. Sales volume decreases

76 In ________ strategy of earning management the entity increases or decreases the earning in order to
reduce the visibility in reported earnings from period to period

A. Income smoothing

77. Calculate overhead rate using material costing method Factory overhead 1600000, Direct materials 100000
and Direct wages 80000

A. 2

78. Master budget is the budget of the entire

A. Organisation

79 The cost of the single process or a series of processes that simultaneously produce two or more products of
significant value are;

A. Joint costs.

80. Which statement shows the flow of cash and cash equivalents during the financial period?

A. Cash flow statements

81. Under Abs costing which of the following fixed expenses charged to COGS

A. All of these ( Fixed manufacturing costs fixed admin cost and fixed selling cost)

82. ______ analysis is used for Trend analysis

A. Ration Trend Analysis

84. A Volume cost profit analysis is a tool to show the relationship between various ingredients of profit
planning namely

A. All of these.

85. When BEP is 2000 units and SP is 14 and VC is 8, what is the fixed cost

A. 12000 ( FC/Sp-Vc)

86. Annual requirement 100000 units, unit price 5 order cost 20 per order, carrying cost 1 per unit and lead
time is 2 weeks the EOQ would be

A. 2000( Square root of 2AB/C where A is requirement, B is order cost and C is carrying cost)

87. The following costs are irrelevant to Special order that will allow the Organisation to utilise some of its idle
capacity:

A. Unavoidable Fixed OH

88. R&D and Advertising expenses in the P &L statement are

A. Cost of sales

89. A balance sheet of the company shows equity 100000 and financial assets 30 lakhs the NOA at the balance
sheet date was

A. 70 lakhs

90. The accounting statement of cash flows reports a firms cash flow segregated into what categorical order

A. Operating, investing and financing

91.BEP is computed on the basis of relationship between Fixed cost and

A. Contribution Margin.

92. One of the following is not included in the costing and control of factory overhead

A. No allocation of overhead

94. Profit and Loss from discontinuing operations and other comprehensive income are not included in the
profit and loss for computing

A. NOPAT ( Net Operating Profit after Tax)

95. Patents are categorised as under:

A. Intangible asset

96. Revaluation gain is included in

A. Other comprehensive income

97. Financial assistance given to co investing in pollution control machines is known as

A. Govt grant.

98. The form of balance sheet is

A. Horizontal or Vertical

99. All costs that affect a decision are called

A. Relevant costs.

100. SEBI requires the non-finance co to present cash flow using

A. Indirect method

101. Which of the following equation represents break even point

A. Contribution = Fixed cost

102. Cost of factory lighting is an example of

A. Indirect cost

103. Assumptions regarding VCP graphs are

A. All of these Costs can be bifurcated into variable and fixed components.

2. Fixed costs will remain constant during the relevant volume range of graph.

3. Variable cost per unit will remain constant during the relevant volume range of graph.

4. Selling price per unit will remain constant irrespective of the quantity sold within the relevant range of the
graph.

5. In the case of multi-product companies, in addition to the above four assumptions, it is assumed that the
sales-mix remains constant.

104. For shut down and continue decision factors to be considered are

A. Contribution margin

105.Fixed costs are fixed for a relevant range of volume for a given

A. All of these

106. The underlying difference between Abs costing and Variable costing is the treatment of

A. Fixed Manufacturing cost

ACCOUNTING

1. The cost of raw materials used in production is an example of

a. Product cost
 2. Quick assets do not include
a. Inventories

3. An increase in selling price per unit lead to

Increase in contribution

4. Which of the following will not appear in a cash budget?

Depreciation of Machinery

5. Financial leverage of a company with can not be calculated

Negative Net worth

6. A special Order can be acknowledged at

Below marginal cost

7. Costs that consist of both fixed costs and variable costs are known as

Mixed Cost

8. If a company revalue its assets , its net worth

Will improve

9. The cost allocation process does not comprise of one of the basic activities which is

Rationalization of activities

10. For a Financial Institution Interest paid and Interest dividends received are classified as
Investing

11. From the perspective of cost allocation , Service department costs are:
Eventually applied by the user departments to the units
produced
 12. The following is true about activity- based costing
It is a two stage allocating system that allocates costs to activities and then to products based on their
uses

13. Net profit is reported as 500000. Net profit includes interest expense 5,00,000 income tax
expense 20,00,000. Interest income 3,00,000 depreciation 6,00,000. Working capital increased
during the year 4,00,000. There was no income tax liability at the beginning and at the end of the
year. Cash flow from operating activities is
540000

14. The p/v ratio of a company is 40% and the margin safety is 20%. If present sales is RS 20,00,000
then break even point in Rs is

Rs 4,00,000
Rs 12,00,000
Rs 8,00,000

Rs 16,00,000

15. The accounting statement of cash flow reports a firm's cash flow segregated into what categorical
order
Operating, investing and financing

16. Which report gives a review on the profitability of business

Income statement

17. Code of ethics for accounting professionals is based upon:

All of these

18. It is a separate performance obligation

Service Warranty

19. The word “relevant range” is used in cost accounting, means the range over which
Cost relationships are valid
20. An increase in variable cost per unit will lead to

A reduction in contribution
 20. The Activity based costing ( ABC) system has advantages

All of these

21. The activity based management (ABM) refers to a set of actions that management can take,Based
on information from an ABC

Repricing of unprofitable products

Increasing sales volume of highly profitability
products Process improvement
All of these

22. The cost which remains constant in total but reduces per unit as the volume of the production
increase is known as:
Variable cost

23. On basis of flexibility budget is classified into two types such as fixed budget and _ budget

Flexible

24. Which of the following items would be subtracted from net income when using the indirect
method of calculating cash flows provided by
A gain of sales on land

25. When assets are subtracted from liabilities it will be equal to

Capital

26. Flexible budgets, as a tool of planning and control, are superior to fixed budgets are their inability
to
Show the potential variability of various estimates used in preparation of budget

27. Flexible budget estimates cost at several levels of

Activity
 28. ------ are the assets which the management expects to convert into cash within 12 months after
the balance sheet date.
Current asset
 29. A current asset that can be transferred into cash within three months as known as
Cash equivalent

30. ----------------- is an obligation present at the balance sheet date

Liability

31. is an example of Non-current assets

Property plant

32. Current Ratio is 4:1. Net working capital is 30,000. Find the amount of current
assets 10,000
40,000
24,000
6,000

33. Current ratio of a concern is 1, its net working capital will

be NIL

34. the Closing Inventory, if any, under variable costing is valued

at Variable and fixed manufacturing cost per unit

35. If there is no opening and closing inventory then profit under marginal costing will
be in comparison to absorption costing
Same

36. Financial statements of the companies are required to be presented in the format prescribed
in of the companies Act,2013
Schedule III

37. The transfer of legal right of an asset may indicate that the customer has obtained control of the
Asset
 38. Horizontal Analysis requires preparation of
Indexed

39. The term Current asset doesn’t cover

Car

40. net profit as per statement of profit and loss is 10,00,000, finance cost 300,000, ---------

A 1105000

B 1170000

C 845000

D 1235000
 40. ----------------is an example of non cash expense

Depreciation

41. if an owned premises is used for a business , the rental income forgone by not giving it
Sunk cost

42. A company makes a single product and incures fixed cost of Rs. 60,000 per annum. Variable cost
per unit is Rs. 10 ans each unit sells for Rs. 30. Annual sales demand is 14,000 units. The
breakeven point is
60000 /30-10
=3000 units

43. If an accounting firm certifies a company’s financial statement, it should have ---- to make
the financial situation look better
Ethical intention

44. In general, the first budget prepared is the

Sales budget

45. The fixed manufacturing cost can be carried forward to next period as part of inventory cost in
which of the following control system : -
Full costing

46. The ABC system has advantages

All of these

47. When production is less than unit sold then the income under absorption costing will be - - - - - -
than the income from variable costing
Lower
 48. Which of the following would be considered a cash flow item from a financing activity
A cash outflow to repurchase the firm's own common stock

49. The excess of ASR over BESR is known as

A. Margin of Safety
 50. Research and development training programs for its employees, advertising and sales promotions,
charitable and/or political donations , management consulting services and so on are called
Discretionary Fixed Cost

51. Income from after sales services to customers would be recorded in:
Other income

52. Goodwill is categorised under which assets:

Intangible assets.

53. Ethics and integrity standards are based on the following except
A. There are no clear rules or responsibilities???

54. In process further and sell now decisions, the decision should be taken based on:
A. Incremental revenues and Incremental costs.

55. As on April 1 2017 100000 shares were outstanding. On October 1 2017 50000 shares were
issued. The weighter average number of shares to be used as denominator to calculate Basic EPS
is
A. 125000

56. Following information is available for prime limited for year end march 2020 fixed cost 800000
Variable cost rs 20 per unit selling price rs 30 per unit output level 2,00000 units Closing stock
50,0000 units what will be the amount of profit earned during the year using the absorption costing
technique Ans 7,00,000

57. Is a detailed budget of all cash receipts and all expenditures Cash
budget
58. Selling and distribution charges are incurred for marketing of products, dispatching goods sold,
and so on and include
All of the above
 59. For cash ltd. Estimated sales for April , may, June & July , august are 46,000 , 48000, 28,000,
44,000, 30,000. increase 50% sales are realized in the next month and the balance in the next
to next month . determine cash collection from sales in June& July –
38000 & 36000

60. Cost of factory lighting is an

example of Indirect cost

61. Assumptions regarding VCP

graphs are All of these

62. The point at which different individual products are separated after a common stage of production
is known as the
Split off point

63. In shut down or continue decisions the factors to be considered are:

Contribution Margin

64. Banks generally see that the Debt to Equity ratio is equal to or below
2:1

65. In case of a bank, interest income should be recognised in the statement of profit and loss
as Other income

66. The Principle underlying the variable costing is that the fixed manufacturing
overheads are Period cost

67. Potential equity shares are treated as dilutive when and only when their conversation to equity
shares would increase from continuing ordinary operations
Net profit per share

68. The following is included in overheads

Indirect material
indirect labour
indirect expenses all
of these

69. -------------------attached with the balance sheet forms a part of the financial statements
Schedules or notes to accounts

70. The term financial statement covers:

Profit and Loss statement and Balance sheet

71. Activity based costing is a costing technique that uses a two state allocation and these are:

The costs are assigned to activities and then to products based upon the use of the activities.

72. Which of the following will not cause the BEP to change

Sales volume decreases

73. Cash flows arising from the purchase and sale of dealing securities are classified as

Operating Activities

74. A contract with a customer sets out the rights and obligations of both, the entity and the
customer. Which of the statement is correct
A: The entity’s right is to deliver goods and services. And the obligation----------

75. 76 In strategy of earning management the entity increases or decreases the earning in order
to reduce the visibility in reported earnings from period to period
Income smoothing
 76. Resources that are limited in quantity are
called as CONTRIBUTOR

77. Master budget is the budget of the entire

Organisation

78. The quality of being honest and having strong principles that you refuse to change
is Integrity

79. 79 The cost of the single process or a series of processes that simultaneously produce two or
more products of significant value are;
Joint costs
 80. Which statement shows the flow of cash and cash equivalents during the financial period

Cash flow statements

81. Under Abs costing which of the following fixed expenses charged to COGS

All of these ( Fixed manufacturing costs fixed admin cost and fixed selling cost)

82. analysis is used for Trend analysis

Horizontal Analysis

83. The following details relate to a particular co. total cost centre oH are 200000, for machining
Deptt and Rs. 150000 for assembly dept, machine hrs used in machinery are 10000hrs, and in
assembly 5000hrs labour hrs used in machinery are 4000 and in assembly 12000, the most
appropriate rate to be used for machinery deptt. Is

15

84. A VCP analysis is a tool to show the relationship between various ingredients of profit planning
namely

All of these.

85. When break even point is 2000 units and SP is 14 and VC is 8, what is the fixed cost

12000 ( FC/Sp-Vc)

86. Annual requirement 100000 units, unit price 5 order cost 20 per order, carrying cost 1 per unit
and lead time is 2 weeks the EOQ would be

2000( Square root of 2AB/C where A is requirement, B is order cost and C is carrying cost)

87. The following costs are irrelevant to Special order that will allow the Organisation to utilise some
of its idle capacity:

Unavoidable Fixed OH
 88. R&D and Advertising expenses in the P &L statement are

Cost of sales
 89. A balance sheet of the company shows equity 100000 and financial assests 30 lakhs the NOA at
the balance sheet date was
70 lakhs

90. is the traditional method of income determination which includes all

manufacturing costs i.e and fixed expenses
ABSORPTION COSTING

91. Cash receipt received from the sales fixed assets are registered under the haed
of Investing activities

92. are the expenses related to business activity but are disproportionate selling in amount
Operating Expenses

93. Opportunity cost represents the forgone by not choosing the second best alternative in favor of
the best one :
A. Loss
Benefit
Both
none of the above

94. Fixed cost is a cost

Which do not change in total during a given period despite changes in output

95. The accounting statement of cash flows reports a firms cash flow segregated into
what categorical order

Operating,investing and financing

96. Break even point is computed on the basis of relationship between Fixed cost and
 Contribution Margin.

Q. The ABC system is a widely used classification technique to identify various item of inventory for purpose
of inventory control

HIGH IN VOLUME

MOST COSTLY AND/OR SLOWEST

FAST - TURNING

ALL OF THESE

Interest received, dividend received are an example of

Other operating income

.
 97. Compute contribution if sales is 5,00,000 fixed cost is 2,00,000 and variable cost is 2,00,000

3,00,000

98. One of the following is not included in the costing and control of factory Overheads
No allocation of Overheads

99. The tax expense statement of Profit and Loss account is Rs. 4000000 current tax liability at the
beginning and end of the year is 2lacs and 1lac respectively. Cash outflow on account of income
tax payment was:
A.3900000

100. is a proxy for pretax cash operating margin

EBITDA

101.The main operations related expenses of a business are termed as

Operating expenses

102.If rent of factory is 10000 per month and a machine occupies 1/4th space of factory
calculate machine hour rate. If machine works for 1000 hours in a year. Calculate MHR
Rs. 30/hour

103.Companies earn interest from investments and therefore for them interest income is not
revenue
Non-Financial

104.Profit and Loss from discontinuing operations and other comprehensive income are not
included in the profit and loss for computing
NOPAT ( Net Operating Profit after Tax)

105.The purchase of Jan feb march is rs 10000, 12000, 15000. Payment to supplier is done 50% in
the month of purchase and 50% in the next month. Calculate the cash payment for the month
of feb
11000
 106.Patents are categorised as under:

Intangible asset

107. Revaluation gain is included in

Other comprehensive income

108.Financial assistance to companies which invest in pollution control equipment is an

example of
Govt grant

109.The form of balance sheet is

Horizontal or Vertical

110.All costs that affect a decision are called

Relevant costs.

111.SEBI requires the non-finance co to present cash flow using

Indirect method

112.Which of the following equation represents break even point

Contribution = Fixed cost

113.Cost of factory lighting is an example of

Indirect cost

114.Fixed costs are fixed for a relevant range of volume for a given
All of these
 115.The underlying difference between Abs costing and Variable costing is the treatment of
Fixed Manufacturing cost

116. For a given info on shine Ltd answer the question

Cost of Machine 200000

Estimated life 10yrs
Scrap value 6000
Factory ops hrs in week 48

Machinery break down 15%

Electricity used by machinery is 10 units/h and 60p /unit Machine Hr rate=

Calculate depreciation

19400

1. Calculate electricity consumption rate per hour ?

Rs 6 per hour

Rs 10 per hour

Rs 60 paise per hour

Rs 60 per hour

2. Calculate the effective machine hours worked in a year ?

2496 hours

374 hours

2122 hours

576 hours

3. calculate machine hour rate

Rs 14 per hour

Rs 11.61 per hour

Rs 12.60 per hour

Rs 18 per hour

4. calculate deprecation rate per hour.

Rs 9.43 per hour

Rs 5.61 per hour

Rs 6.60 per hour

Rs 8.01 per hour

117. The direct method and indirect method of presenting cash flow statement the force only in respect of presenting
cash flow from

Non- operating

Direct

Operating

Indirect
 116.Which break even point is 2000 units. Selling price per unit is Rs. 14 and variable cost is Rs. 8
find out fixed cost
Rs 12000

117.For ABC Limited annual rent of factory is 12,0000 and units produced in the current year at
1,0000
s2 LACS

118.The distribution of common cost among user departments is known as

Apportionment of Cost

119.In product mix decision. Most important factor to be considered is

contribution per unit of a scarce resource used to make the product

120.A asset is classified as asset if its value is not determinable in a fixed amount of cash Non-
monetary

121. is the firm ability to arrange cash in short term to meet its short term obligations where as
is its long term visibility and ability to honour long term financial commitments Liquidity.
Solvency option C

122.Furniture Ltd. produces multiple types of chairs. It uses activity-based costing and has the
following activity cost pools, estimated overhead cost for each pool and related cost driver: a)
Handling material Rs 240,000 for which cost driver is number of parts, total parts are 6000 b)
Processing purchase orders Rs 720,000 for which cost driver is number of purchase orders, total
purchase orders placed in a year are 12000. If number of purchase orders and number of parts for
the Manager chair are 2000 and 2000 respectively then calculate the overheads allocated to
Manager chairs.
Rs 80000
Rs 120000
Rs 480000
Rs 200000 - Ans (shared in the other group)
 123.Printers limited uses activity based costing for its products which includes laser printers and ink
jet printers. The total estimated overhead cost for the
7,20,000

As per flexible budget, sales is Rs 5,00,000 CoGS is Rs 3,00,000 and 20% of which is fixed. Calculate at
80% capacity utilization, considering that current utilization of capacity is 60% ::

Rs 320000

Rs 380000

Rs 400000

Rs 500000

Furniture Ltd. produces multiple types of chairs. It uses activity-based costing and has the following activity
cost pools, estimated overhead cost for each pool and related cost driver: a) Handling material Rs 240,000 for
which cost driver is number of parts, total parts are 6000 b) Processing purchase orders Rs 720,000 for which
cost driver is number of purchase orders, total purchase orders placed in a year are 12000. If number of
purchase orders and number of parts for the Manager chair are 3000 and 3000 respectively then calculate the
overheads allocated to

A 120000

B 180000

C 300000

D 960000

P
 124.The earnings management mechanics in which the management takes as many write-
offs as possible in a period of markedly poor performance is called--------
Liquidity Smoothening

125. Tibu Company

Question 60000

126.For Torque Ltd the sales income from

1,30,000 0.33

127.Buy back of shares is an

of fund – INVESTMENT

128.A system assigns indirect costs or products in two stages: first, the accumulated cost
are allocated to production departments, second, the accumulated cost
centres Traditional costing systems

129.According to the critics of the professional accounting rules, conflict of interest is

built into the accounting system because the accounting firm is working

For the company whose accounts it is auditing

130.In process further or sell now decisions , the decisions should be taken based on …..

Incremental revenue and incremental cost

131.The part of cost of joint products that can be attributed exclusively and wholly to
a particular product, process, division or department is known as…..

Seperable
In cash flows, when a firm invests in fixed assets and short-term financial investments results in

Select one:

a. Increased Liabilities

b. Decreased Cash

c. Increased Equity

d. Increased cash

It is a part of business analysis.

Select one:

a. Credit details analysis

b. Financial statement analysis

c. Financial accounting

d. Bank statement analysis

For a non-finance entity, interest and dividend income are classifed as ................

Select one:

a. Government grant

b. Other operating income

c. Other income

d. Operating income

All the assets that an entity controls are recognised in the ................

Select one:

a. Accounting book

b. Balance sheet

c. Pro

t & loss statement

d. Financial statement

Cash flow example from an investing activity is

Select one:

a. Sale of investment by non-financial enterprise

b. Repayment of long-term loan

c. Purchase of raw materials for cash

d. Issue of debenture

The terms ‘................’ is used in the context of PP&E and the term '................' is used in the context of
intangible assets.

Select one:

a. Amortisation, Depreciation

b. Amortisation, Depletion

c. Depreciation, Amortisation

d. Depreciation, Depletion

................ reduces the opportunity for window dressing by controlling accounting policy.

Select one:

a. GDP

b. GAAP

c. Equity

d. Company Law

A firm that issues stocks and bonds to raise funds results in

Select one:

a. Increases cash

b. Decreases cash

c. Increases equity

d. Increases liabilities

Revenue is categorized as ........

Select one:

a. Earnings

b. Other income

c. Profit

d. Operating Income

Financial assistance to companies which invest in pollution control equipment is an example of

................

Select one:

a. Private Fund

b. Government donation

c. Government grant
d. NGO Fund

In the Balance sheet of a firm, the debt equity ratio is 2:1. The amount of long term sources is `12 lac.
What is the amount of tangible net worth of the firm?

Select one:

a. ` 2 lac

b. `12 lac

c. ` 4 lac.

d. `8 lac

Managing it through accounting manipulations is known as earnings management.

Select one:

a. Accounting

b. Earnings

c. Accrual management

d. Tax liability

If members of the auditing profession breach the trust that investors and other stakeholders place on
the profession and misreport on the true and fairness of financial statements due to negligence or
otherwise, the smooth functioning and growth of the capital market

Select one:

a. Will not be affected at all

b. Will not be affected

c. Will be affected positively

d. Will get affected adversely

EBIT= EBITDA- ................

Select one:

a. Depreciation and Amortisation

b. Profit

c. Depreciation

d. Amortisation

An asset is a

Select one:
a. Source of fund

b. Inflow of funds

c. None of the above

d. Use of fund

Equity is classiffed into...... and .........

Select one:

a. Equity capital, other equity

b. Total equity, equity share

c. Equity shares, total equity

d. Equity capital, equity shares

Statement of cash flows includes

Select one:

a. All of the above

b. Financing activities

c. Operating activities

d. Investing activities

It applies values in its conduct with all the stakeholders, including those with whom it has no
commercial dealing.

Select one:

a. Ethical business

b. Responsible business

c. Professional business

d. None of the above

The expenses in Statement of Profit and Loss are classified as per their________

Select one:

a. Nature

b. Function

c. Variable-Fixed

d. Finacial-Non Financial

Total comprehensive income has ................ components

Select one:
a. Six

b. Five

c. Two

d. Three

While analysing ...... both investors in equity shares and lenders evaluate downside risks.

Select one:

a. Credit statement

b. Liabilities

c. Assets

d. Financial statement

An accountant who is employed with a company and is a member of a project team must have the
knowledge of the product and the application issues in applying...........in the industry.

Select one:

a. Guidelines of confidentiality

b. Guidelines for CFO

c. accounting guidelines

d. IndAS

Which of these are unique features of the accounting profession

Select one:

a. Do not share confidential information

b. Form professional judgements

c. 1&3

d. Do not necessarily serve public interest

Financial statements, including consolidated financial statements should be approved

by............................

Select one:

a. Members

b. Board of directors

c. Chairman

d. CEO

Authorised capital of a company is `5 lac,40% of it is paid up. Loss incurred during the year is
`50,000.Accumulated loss carried from last year is `2 lac. The company has a Tangible Net Worth of

Select one:
a. `1 lac

b. (–) `50,000

c. Nil

d. `2.50 lac

................ Facilitates comparing performance of a company with peers by ensuring uniformity in

accounting policy being adopted by all the

Companies in the same industry.

Select one:

a. Accounting ledger

b. Balance sheet

c. GDP

d. GAAP

In last year the current ratio was 3:1 and quick ratio was 2:1.Presently current ratio is 3:1 but quick
ratio is 1:1.This indicates comparably

Select one:

a. Lower stock

b. High liquidity

c. Low Pro

tability

d. Higher stock

cost is the amount of benefitts foregone from the second-best alternative decision/action.

Select one:

a. Opportunity

b. Sunk

c. Direct

d. Indirect

The type of cost which changes with the change in alternative course of decision/actions whereas
irrelevant cost remains constant across all the alternative course of decision/ actions

Select one:

a. Irrelevant

b. None of these

c. Constant

d. Relevant
Zero base budgeting (ZBB) can be defined as

Select one:

a. It is a management process that provides for systematic consideration of all programs.

b. Justification of each program

c. A tool for efficient use of resources

d. All of these

The ____________ costs which would change as a result of the decision under consideration, whereas
irrelevant costs are those which would remain unaffected by the decision and therefore, only these
costs would be included in the analytical framework.

Select one:

a. Relevant costs

b. Incremental cost

c. Irrelevant costs

d. None of these

If selling price per unit increases and variable cost per unit decreases, and total fixed cost does not
change, then margin of safety (MOS) at a given level of output will

Select one:

a. Need more facts to answer

b. Remain unchanged

c. Decrease

d. Increase

The following is the basic assumption of variable costing technique

Select one:

a. Fixed costs resulting from the investment are product costs.

b. Fixed costs resulting from the investment are period costs.

c. Variable costs are period costs.

d. Fixed costs are sunk cost

Overheads include which of the following component?

Select one:

a. Indirect labour cost

b. Indirect material cost

c. All of these
d. Indirect expenses

The following is considered as product cost under variable costing.

Select one:

a. Fixed cost

b. Contingent cost

c. Direct material cost

d. Opportunity cost

It is the cost of materials which cannot be conveniently assigned to a specific physical unit of
production.

Select one:

a. None of these

b. Indirect expenses Cost

c. Indirect material cost

d. Direct material cost

There are three different types of cost behaviors which can be visualized with changes in volume or
level of activity:

Select one:

a. All of these

b. Mixed costs

c. Variable costs

d. Fixed costs

If the Rent of building os 12000 and there are two production departments A & B. Department A uses
one-third area of building and department B uses two-third area. How much overhead cost must be
apportioned to Department A

Select one:

a. 4000

b. 6000

c. 12000

d. 8000

A type of costing system in which only variable costs are recognised as product costs is called as

Select one:

a. Variable
b. Fixed

c. Invariable

d. None of these

cost concept which is relevant to the short-term decision making is the

Select one:

a. Sunk cost

b. Opportunity costs

c. None of these

d. Committed cost

While analysing ...... both investors in equity shares and lenders evaluate downside risks.

Select one:

a. Financial statement

b. Credit statement

c. Liabilities

d. Assets

Entities estimate the transaction price at contract inception which is important for allocating the
................ to different performance obligations in a single contract.

Select one:

a. Performance obligation

b. Revenue

c. Transaction price

d. Warranties

Indian companies present balance sheet in the format prescribed in ................ of the Companies Act,
2013

Select one:

a. Schedule III

b. Schedule II

c. Schedule V

d. Schedule IV

A firm that issues stocks and bonds to raise funds results in

Select one:

a. Increases equity
b. Increases cash

c. Increases liabilities

d. Decreases cash

Preference Dividend is to be treated as part of ______

Select one:

a. Operating Expense

b. Capital Expense

c. Financial Expense

d. Cash Expense

Statement of cash flows includes

Select one:

a. Investing activities

b. All of the above

c. Financing activities

d. Operating activities

The expenses in Statement of Profit and Loss are classifed as per their________

Select one:

a. Finacial-Non Financial

b. Nature

c. Variable-Fixed

d. Function

ROIC stands for

Select one:

a. Return of Investing company

b. Reserve of Investing company

c. Reserve of invested capital

d. Return on invested capital

It applies values in its conduct with all the stakeholders, including those with whom it has no
commercial dealing.

Select one:

a. Ethical business
b. Responsible business

c. Professional business

d. None of the above

Authorised capital of a company is `5 lac,40% of it is paid up. Loss incurred during the year is
`50,000.Accumulated loss carried from last year is `2 lac. The company has a Tangible Net Worth of

Select one:

a. `2.50 lac

b. `1 lac

c. (–) `50,000

d. Nil

For a non-finance entity, interest and dividend income are classifed as ................

Select one:

a. Operating income

b. Other operating income

c. Other income

d. Government grant

Net profit is profit after ................ and tax expense.

Select one:

a. Sales

b. Purchase

c. Non-operating

d. Interest

A company having one or more subsidiary companies are required to publish ................

Select one:

a. Cash flow statements

b. Consolidated Financial statement

c. Financial statement

d. Statement of profit & loss

It is a part of business analysis.

Select one:

a. Financial statement analysis

b. Bank statement analysis

c. Credit details analysis

d. Financial accounting

If members of the auditing profession breach the trust that investors and other stakeholders place on
the profession and misreport on the true and fairness of financial statements due to negligence or
otherwise, the smooth functioning and growth of the capital market

Select one:

a. Will not be affected

b. Will be affected positively

c. Will get affected adversely

d. Will not be affected at all

Directors’ Responsibility Statement is a component of ..........................

Select one:

a. Auditor's report

b. Periodical report

c. Board of directors’ report

d. Technical report

For a non-finance entity, interest and dividend income are classified as ................

Select one:

a. Operating income

b. Other operating income

c. Other income

d. Government grant

It is a part of business analysis.

Select one:

a. Financial statement analysis

b. Bank statement analysis

c. Credit details analysis

d. Financial accounting

Net profit is profit after ................ and tax expense.

Select one:

a. Sales

b. Purchase

c. Non-operating

d. Interest

Cash flow example from an investing activity is

Select one:

a. Repayment of long-term loan

b. Issue of debenture

c. Sale of investment by non-financial enterprise

d. Purchase of raw materials for cash In the Balance sheet of a firm, the debt equity ratio is 2:1. The
amount of long term sources is `12 lac.What is the amount of tangible net worth of the firm?

Select one:

a. `12 lac

b. ` 4 lac.

c. `8 lac

d. ` 2 lac

A company having one or more subsidiary companies are required to publish ................

Select one:

a. Cash

ow statements

b. Consolidated financial statement

c. Financial statement

d. Statement of profit & loss

measures the change in equity during the current period other than changes from transactions with
equity shareholders.

Select one:

a. Profit/Loss

b. Revenue
c. Capital

d. CoGS

All the assets that an entity controls are recognised in the ................

Select one:

a. Balance sheet

b. Accounting book

c. Financial statement

d. Profit & loss statement

Any economic resource that the entity uses to carry out its operations is an ................ in the context
of financial accounting.

Select one:

a. Debt

b. Liability

c. Loss

d. Asset

Debt Equity Ratio is 3:1, the amount of total assets `20 lac, current ratio is 1.5:1 and owned funds `3
lac. What is the amount of current

asset?

Select one:

a. none of the above

b. `12 lac

c. `5 lac

d. `3 lac

The statement of only parent

rm without including the subsidiary statements are known as_____

Select one:

a. Standalone Financial statement

b. Non Consolidated Financial Statements

c. Consolidate Financial Statement

d. Individual Financial Statement

Identifying ............. is the key to recognising revenue correctly.

Select one:

a. Operating income

b. Transaction price

c. Value of money

d. Performance obligations

Manoj is a professional accountant and leading a group, which cheats nave villagers through a Ponzi
scheme. She is arrested by the enforcement authority along with other members of the group. He has
violated the principle of ......

Select one:

a. Con

Dentiality

b. Professional behaviour

c. Dilemma

d. Self-interest threat

Equity is classified into...... and.........

Select one:

a. Equity capital, other equity

b. Equity capital, equity shares

c. Total equity, equity share

d. Equity shares, total equity

While analysing ...... both investors in equity shares and lenders evaluate downside risks.

Select one:

a. Financial statement

b. Credit statement

c. Liabilities

d. Assets

Entities estimate the transaction price at contract inception which is important for allocating the
................ to different performance obligations in a single contract.

Select one:

a. Performance obligation

b. Revenue

c. Transaction price
d. Warranties

Margin of ________ is the excess of actual sales revenue over the break-even sales revenue

Select one:

a. Hazards

b. Quality

c. None of these

d. Safety

Zeta Ltd. Manufactures the furniture and sells it without furnishing. Their material and labour cost is
Rs 2000 per unit and Rent is Rs 25000 per month. Company sells 25 units per month. Now the
management decided to do proper finishing and polishing of furniture before selling it. This will lead
to additional Rs 500 variable cost per unit and selling price can be increased by Rs 800 per unit. What
is the

relevant cost to take this decision?

Select one:

a. Rs 3000 per unit

b. Rs 2000 per unit

c. Rs 2500 per unit

d. Rs 500 per unit (this seems more correct...2000 will anyways will be incurred )

The substance from which the product is made is known as material and all the materials which
become an integral part of the finished product and which can be conveniently assigned to specific
physical units are called as

Select one:

a. Indirect Material

b. Labour

c. None of these

d. Direct material

It is a system based on activities linking spending on resources to the products/services produced or

delivered to customers.

Select one:

a. Activity based cost

b. Activity rate cost

c. Activity cost driver rate

d. None of these
________ costs have been incurred by a decision that was made in the past and cannot be changed
by any decision that would be made in

the future.

Select one:

a. Budgeted cost

b. Targeted cost

c. Sunk cost

d. None of these

If selling price per unit increases and variable cost per unit decreases, and total fixed cost does not
change, then margin of safety (MOS) at a given level of output will

Select one:

a. Need more facts to answer

b. Remain unchanged

c. Increase

d. Decrease

A cost result from over costing of high-volume products and under costing of low-volume products is

Select one:

a. None of these

b. Activity cost driver rate

c. Cost distortion

d. Traditional costing system

There are three different types of cost behaviors which can be visualized with changes in volume or
level of activity:

Select one:

a. Mixed costs

b. Fixed costs

c. All of these

d. Variable

It is the cost of materials which cannot be conveniently assigned to a specifc physical unit of
production.

Select one:

a. Indirect material cost

b. Direct material cost

c. None of these

d. Indirect expenses Cost

Incremental or differential costs are useful in planning and decision-making and provide a device for
testing the proftability of increased output, and give a better measure than the

Select one:

a. Additional cost

b. Average Cost

c. None of these

d. Sunk Cost

The Pearl Merchandise Company has budgeted Rs 40,000 in sales for the month of December. The
company’s cost of goods sold is 30% of sales. If the company has budgeted to purchase Rs 18,000 in
merchandise during December, then the budgeted change in inventory levels over the month of
December is:

Select one:

a. Rs 22,000 Decrease

b. Rs 15,000 Increase

c. Rs 10,000 Increase

d. Rs 6,000 Decrease

A margin is the excess of unit sale price over unit variable cost.

Select one:

a. Contribution

b. None of these

c. Situational

d. Cost

The Planning Process includes:

Select one:

a. Objectives

b. All of these

c. Strategies

d. Goals

The cost that has been incurred in the past _____

Select one:

a. Indirect
b. Sunk

c. None of these

d. Direct

The following is considered as product cost under variable costing.

Select one:

a. Fixed cost

b. Opportunity cost

c. Direct material cost

d. Contingent cost

If fixed cost is Rs 5000 and units produced in a year are 1000, then how much fixed cost will be
charged to product in case of variable costing?

Select one:

a. Rs 60

b. Rs 5000

c. Rs 5

d. Rs 0

The monetary benefits that would accrue from taking the alternative course are sacrificed and these
benefits, if measurable, should be added to the costs of the

Select one:

a. Money

b. All of these

c. Decision

d. Time

Activity based costing is primarily used for proper absorption of _______ to product

Select one:

a. Material cost

b. All of these

c. Overhead Cost

d. Labour Cost

A type of costing system in which only variable costs are recognised as product costs is called as

Select one:

a. Fixed

b. Variable

c. Invariable
d. None of these

The costing indicates that the manufacturing fixed overheads are inventoriable costs; they are the
product costs and must be matched against the revenue of the year in which sales are made is

Select one:

a. Absorption cost

b. Variable cost

c. None of these

d. Fixed cost

If the total inspection cost is Rs 10 lacs and number of inspections done during the year are 10000,
what will be the overhead cost for a product which requires 5 inspections

Select one:

a. 20

b. 100

c. 500

d. 10000

The contribution margin ratio is 25% for Crowne Company and the break-even point in sales is Rs
200,000. If Crowne Company’s target operating proft is Rs 60,000, sales would have to be:

Select one:

a. Rs 260,000

b. Rs 440000

c. Rs 280000

d. Rs 240000

Direct Human efforts, both physical and mental, used for conversion of materials into finished
products is

Select one:

a. Labour

b. None of these

c. Production

d. Work

If the Rent of building os 12000 and there are two production departments A & B. Department A uses
one-third area of building and department B uses two-third area. How much overhead cost must be
apportioned to Department A

Select one:

a. 12000
b. 6000

c. 4000

d. 8000

No. of Inspections is an example of which type of activity cost driver

Select one:

a. None of these

b. Transaction

c. Intensity

d. Duration

The ____________ costs which would change as a result of the decision under consideration, whereas
irrelevant costs are those which would remain unaffected by the decision and therefore, only these
costs would be included in the analytical framework.

Select one:

a. Incremental cost

b. Relevant costs

c. Irrelevant costs

d. None of these

Indirect Labour Cost cannot be conveniently traced to a specifc unit of product /output and includes

Select one:

a. Wages of storekeepers

b. Foremen, time-keepers

c. Directors’ and salesmen salary

d. All of these

Which of the following is feature of Zero base budgeting?

Select one:

a. Individual units are linked to organizational targets

b. All of these

c. Concentration on justification of the activity

d. Based on cost-benefits

A _______ break-even point is total cash fixed cost divided by contribution margin per unit.
Select one:

a. Cash

b. Profit

c. None of these

d. Loss

Avoidable costs are relevant costs when particular decision alternatives are

Select one:

a. None of these

b. Inexpensive

c. Compared

d. Expensive

The Planning Process includes:

Select one:

a. Goals

b. Strategies

c. All of these

d. Objectives

At a break-even point of 400 units, variable costs were Rs 400 and fixed costs were Rs 200. What will
the 401st unit sold contribution to operating profits before income taxes is

Select one:

a. Rs 1.00

b. Rs 2.00

c. Rs 0.50

d. Rs 1.50

Operating budgets relate to the physical activities or operations of a firm such as sales, production,
purchasing, debtors collection and creditors payment schedules and in specific terms, an operating
budget has the following components:

Select one:

a. Purchase budget

b. Sales budget

c. All of these
d. Production budget

If the total inspection cost is Rs 10 lacs and number of inspections done during the year are 10000,
what will be the overhead cost for a product which requires 5 inspections

Select one:

a. 100

b. 20

c. 10000

d. 500

Direct Human efforts, both physical and mental, used for conversion of materials into finished
products is

Select one:

a. None of these

b. Work

c. Production

d. Labour

A cost-profit analysis shows the relationship among the various ingredients of profit planning, namely,
unit sale price, variable cost, sales volume, sales mix and fixed cost is

Select one:

a. Cost-Weight-Profit Analysis

b. Quantity-Volume-Profit Analysis

c. Cost-Volume-Profit Analysis

d. None of these

The following is considered relevant cost under variable costing.

Select one:

a. Direct expense

b. All of these

c. Direct labour cost

d. Direct material cost

Margin of ________ is the excess of actual sales revenue over the break-even sales revenue

Select one:

a. Safety

b. Hazards
c. None of these

d. Quality

________ costs have been incurred by a decision that was made in the past and cannot be changed
by any decision that would be made in

the future.

Select one:

a. Targeted cost

b. None of these

c. Budgeted cost

d. Sunk cost

Financial budgets are concerned with expected cash receipts or disbursements, financial position and
results of operations and in other words, a financial budget has the following components:

Select one:

a. Cash budget

b. Budgeted income statement

c. All of these

d. Budgeted statement of retained earnings

A _______ break-even point is total cash fixed cost divided by contribution margin per unit.

Select one:

a. Loss

b. Profit

c. None of these

d. Cash

If the total inspection cost is Rs 10 lacs and number of inspections done during the year are 10000,
what will be the overhead cost for a product which requires 5 inspections

Select one:

a. 500

b. 20

c. 100

d. 10000
Elements of cost includes

Select one:

a. Direct labour

b. Overheads

c. Direct material

d. All of these

Cost which can be identified with goods produced or purchased for resale is named as

Select one:

a. Unexpired Cost

b. Expired Cost

c. Product Cost

d. Period Cost

ABC system is a widely used classification technique, should exercise the maximum control
on items of inventory data

Most costly or slowest turning

P/V ratio = (Change in profit / Change in sales) x 100 = (9000/30000) x 100 = 30%

Fixed cost = (Sales x P/V ratio) – Profit = (270,000 x 0.3) – 6,000 = `75000

Break-even point = Fixed cost / PV ratio = 75,000 / 30% = `2,50,000

FIXED COSTS ÷ (SALES PRICE PER UNIT – VARIABLE COSTS PER UNIT)

Margin of safety at a profit of `24000 = Profit/ P.V ratio = 24000/30% = `80000

 Calculate profit under variable costing technique, when number of units

produced is 1,00,000 units, selling price is Rs 10 unit, variable cost is Rs 6
per unit and fixed costs are Rs 2,00,000 :: Rs 2,00,00

 Cash flow arising from the purchase and sale of dealing or trading securities
are classified as for a brokerage firm :: Operating Actiivities

 is an example of non-current assests :: Property, Plant & Equipment

 An asset is classified as a __ asset if its value is not determinable in fixed
amount of cash :: Non-monetary

 A current asset that can be transferred into cash within three months is
known as :: Cash Equivalent

 Financial Leverage (FLEV) of a company with __ cannont be calculated ::
Negative Net worth

 Which of the following items would be subtracted from net income when
using the indirect method of calculating cash flows provided by operating
activities :: Gain on sale of land

 Code of Ethics for accounting professional is based on: Integrity,
Objectivity, Confidentiality

 The part of cost of joint products that can be attributed exclusively and
wholly to a particular product, process, division or department is known as
:: Seperable

 Many manufacturers make more than one type of product and the relative
proportion of each product sold in the aggregate sales is known as the ::

The process further or sell now decision, the decision should be taken based on
__ ? :: Incremental Revenue & Incremental Cost
 refers to the ability to direct the use of, and obtain substantially all of the
remaining benefits from the asset :: Control of an asset

 Which of the following is an irrelevant cost :: Sunk Cost

 When Corporations seek to hide their true financial situation, the pressure
to engage in ___ bookkeeping technique falls on the accountant :: Unethical
and Illegal

 Earing Per Share (EPS) is calculated based on …….. :: Net Profit

 The Cost Allocation process does not comprise of one of the basic activities
which is :: Rationalizing of the Activities

 Reorganise balance sheet of a company shows, equity 100 lakhs and net
financial assets of 30 lakhs. The net operating asset (also called invested
capital of the balance sheet was??

 Building is an example of :: Non-Current Asset
 ___ are the only self-generated intangible to be recognized in financial
statements by GAAP :: Goodwill

 Fixed costs caused by purchase of capacity producing assets such as plant
and equipment are called as :: Committed Cost

 Construction Ltd. Plans to discontinue its interior decoration segment. Last
year, this segment generated a contribution margin of Rs 60,000 and
incurred Rs 80,000 in fixed cost. Discontinuing the segment will allow the
company to avoid half of the fixed costs. What effect is expected to occur to
the company’s overall product :: 20,000 decrease


The overheads are absorbed into different product under activity activity costing system

Using level of activity used in producing the cost unit

 Relevant costs are costs which would change as a result of

decision

About 60 items are required everyday for a machine a fixed cost of 40 per order is incurred
for placing an order

1500

Gross profit margin is calculated by dividing gross profit by

cost of sale

Which of the following would not cause the breakeven point to change

Sales volume decrease

Under absorption costing which of the following fixed expenses are charged to cost of
goods sold

All of the above

NUMERICALS --------------

A firm requires 8000 nos of a certain component, which is bought at 60 each.

A 1000

B 900

C 800

D 400

Q. The crucial step in the C-V-P analysis is the determination of break even point which is defined at the
sales level at which--------------

The total revenue equals total costs

Q. When a department or product line is dropped, the common fixed costs which had been allocated to that
department:
A) are eliminated.

B) become variable costs.

C) are allocated to the remaining departments or product lines.

D) become sunk costs.

Q. is not charged on items included in capital work in progress

Depreciation

Porter Corporation is working on its direct labour budget for next two months. Each unit
of output requires 0.84 direct labour hours. The direct labour rate is 9.40 per direct labour
hour. The production budget calls for producing 2,100 units in June and 1,900 units in July.
If the direct labour works force is fully adjusted to the total direct labour hours needed
each----------------------------------
31,584

Q. Automobile company produced 5000 part each year that are used in one of its products
the unit cost of producing this part is variable cost------------------

20000 increase

Which of the following costs are not considered in a differential analysis for a make-or-
buy decision?

Fixed overhead that will continue if the item is purchased.

Q. for an organisation involved in construction of diverse type of housing like HIG, MIG
and------------
absorption costing
Q. The eoq model as a technique to determine the economic order quantity

All of these

Q. Costs that tend to vary in direct proportion in a one-to-one relationship to changes in

production activities
Variable cost

Q. Expense pertaining to management of business like office rent, lightning and heating,

Office and administration expenses

Q. Only fixed costs are reckoned in sale of further process type of decision-making
incrimental

Q. there is no complication of over-absorption of factory overheads or eve their….

absorption costing.

Q. The following information pertains to Tailler Co: sales 800000 variable cost…..
50000

Q : ABC ltd plans to produce and sell 4000 units (****)

Ans :0.60

Q: Tailer company sales 800000 variable cost 1600000 fixed cost 40000
Ans : 160000
Q: Sales budget is
Ans :Functional budget

Q : Inventory control minimum level indicates

Ans: lowest level of stock held

Q: P company produces three type of product A,B,C

Ans :300000 , 600000 , 93000

Q: A company manufacturing a single product for which selling and cost price
Ans :5000 units

Q: Compute the machine hour rate cost of machine is 32000 estimated scrap
Ans :Rs 6

Q: If maximum reorder period is 8 weeks and reorder level is 1600 units (***)
Ans :200

Q : when preparing a production budget the quantity to be produced

Ans : sales quantity – opening stock + closing stock

Q. A company makes and sells a single product . If the fixed cost incurred in making and selling the
product increases
Ans : The break even point will increase

Q: ______________________companies earn interest from investment and therefore for them

investment income is not revenue .

Ans: Non- Financial

Q: Satin LTD disclosed the information …2019 and 2018 rent …..as 31st march 2019 is 11500.

Ans : 27700

Q : The company average cost per unit to make in house component is more than the cost to buy
from out side .

Ans : l and lV

Q:Factory over head cost refers to all indirect manufacturing cost which cannot be identified with
particular ….unit of products it includes ___________

Ans : Depreciation on factory plants and .

Q: which of the following is true for flexible budget .

Ans – I and III

Q: ABC LTD sella single product for rs 9 per unit ------sales were 180000----ABC LTD margin
safety in unit was

Ans :160000

Q: Following information is available of GGSS ltd for year ended dec 2020-----using the
absorption
Ans : 1900

Q: . The overall PV ratio of XYZ ltd is 60%. The marginal cost of the product X is estimated at
rs 50 Determine selling price of product Z?

Ans 125

Q:. ABC system is widely used classification technique to identify various items of inventory
for purpose of inventory control and recommends that a firm should exercise the maximum
control on those item of inventory that are .
Ans : Most costly and or slowest

Q:. For cash ltd estimated sales for April , may June July august are 46000 , 48000 28000
44000 . Incase 50% sales are realized in the next month and balance in the next
month……determine cash collection from sales in June and July
Ans: 14000 and 22000

Q: In marginal costing input output ratio is the ration on

Ans : Non of these

Q: Cost which can be easily identified with a department process or product are termed as :-
----
Ans : Traceable cost

Q: If the rent of the factory is rs 10000 per month and machine occupies 1/4th space of
factory

Ans : 30 per hour

Q: Tibu company expects sales of product W to be 600000……company production of

product W for the month of April should be

Ans: 60000 units

Q: Following information is available for Prime LTD for year ended march 2020 fixed cost rs
80000 ……….. during the year marginal cost . Ans : 700000
Q: Profit planning is done in the case of
Ans : CVP analysis

Q: From the following information calculate the net profit ratio . Particular sales 2520000.
Fixed assets 1440000 cost of sales 1920000, current liabilities 50000
Ans : 0.1412

Q: Product X generates a contribution a contribution to sales ratio of 30 % fixed cost directly

attributable to X amount to rs 75000 per month . Calculate the sales revenue required to
achieve a monthly profit of 15000
Ans 276000

Q: Building is an example of Non current assets

Q: If the sales price will increase which of the following are true ;
Ans : I & ll (both will increase)

Q: In the budget that gives summary of all the functional budget and projected profit and
loss account is known as___________
Ans : Master budget

Q Factory over head should be absorbed on the basis of:

Ans: Relationship to cost incurred

Q: These are the example of intangible asset .

Ans : All of these

Q: Gain from the sale of item of PP&E should be included as :

Ans : Other income.

Q: If average consumption is 15 units per days………..4days . Find out the danger level .
Ans : 60 units

Q: A budget which is prepared keeping in mind the changing level of activity is termed as

Ans : Flexible budget

Q: Bad debts and advertising expenditure are the part of

Ans : S&D over head

Q:The cost which has been created in the past and can not changed by any decision that will
be made in future .
Ans : Sunk cost

Q: A document which sets our the responsibility of the person engaged in the routine of and
the form of records required for the budgetary control known as : Ans : Budget manual
Q: Which of the following will not result in an increase in the net working capital.
Ans : II and IV

Q: _______________ is the traditional method of income determination which includes all

manufacturing cost .
Ans : Absorption cost.

Q: what will be sale of desired profit if fixed cost is rs 25000 profit is 15000 and contribution
per unit is 10 .

Ans : 4000 units .

Q: One of the following is the correct formula for gross margin under full costing
Ans : sales revenue less cost of goods

Q: According to flexibility budget can be classified into

Ans B & C both ( Purchase and flexibility Budget)

Q: Of the four cost shown below which would not be included in the cash budget of an
insurance form .
Ans : commission paid to agents

Q: Which of the following statement are true A) Financial statement are only interim report

Ans : Option B and C

Q: what is the main difference between traditional budgeting and and zero based
budgeting(ZBB)?
Ans :ZBB starts at zero plus income from last year .

Q: Bank generally sees that debt equity ratio is equal to or below

Ans : 2:1

Q: Assumption regarding the VCP graph are

Ans :All of these

Q: There are overheads which remain constant within the capacity of the organisation
Ans : Fixed overhead

Q: Lead time 5 weeks , average weekly consumption 28 units . what should be the
reordering level .
Ans: 150 units

Q: Current ratio of a concern is 1 its net working capital will be

Ans : Nil
Q: Annual requirement is 100000 units , 5 order cost 20 per order carrying cost ,1per unit
and lead time is 2 weeks . The economic order quantity will be .
Ans :2000 units