Quiznetik

Cost and Management Accounting | Set 1

1. Basic objectives of cost accounting is .

Correct : C. cost ascertainment.

2. Direct cost incurred can be identified with .

Correct : B. each unit of output.

3. Overhead cost is the total of .

Correct : A. all indirect costs.

4. Imputed cost is a .

Correct : A. notional cost.

5. Operating costing is suitable for .

Correct : D. service industries.

6. Process costing is suitable for .

Correct : B. oil reefing firms.

7. Cost classification can be done in .

Correct : D. several ways.

8. Costing refers to the techniques and processes of

Correct : A. ascertainment of costs.

9. Cost accounting was developed because of the .

Correct : A. limitations of the financial accounting.

10. Multiple costing is a technique of using two or more costing methods for ascertainment of cost by.

Correct : A. the same firm.

11. Wages paid to a labour who was engaged in production activities can be termed as.

Correct : A. direct cost.

12. The cost which is to be incurred even when a business unit is closed is a.

Correct : D. Shutdown cost.

13. Classification of cost is useful .

Correct : C. to identify costs.

14. Elements of costs are.

Correct : A. three types.

15. Direct expenses are also called .

Correct : B. chargeable expenses.

16. Indirect material used in production is classified as.

Correct : D. production overhead.

17. Warehouse rent is a part of .

Correct : C. distribution cost.

18. Indirect material scrap is adjusted along with .

Correct : B. factory cost.

19. Which one of the following is not considered for preparation of cost sheet?

Correct : B. Goodwill written off.

20. Sale of defectives is reduced from .

Correct : C. cost of production.

21. Tender is an.

Correct : C. estimation of selling price.

22. Cost of sales plus profit is .

Correct : A. Selling price.

23. Prime cost includes.

Correct : C. Direct materials, direct wages and direct expenses.

24. Total of all direct costs is termed as .

Correct : A. prime cost.

25. Depreciation of plant and machinery is a part of .

Correct : A. factory overhead.

26. Audit fess is a part of .

Correct : D. administration overhead.

27. Counting house salary is part of .

Correct : D. administration overhead.

28. Factory overhead can be charged on the basis of -.

Correct : A. material cost.

29. Office and administrative expenses can be charged on the basis of .

Correct : C. prime cost.

30. Selling and distribution expenses can be charged on the basis of .

Correct : C. prime cost.

31. The ratios which reflect managerial efficiency in handling the assets is.

Correct : A. turnover ratios

32. The ratios which reveal the final result of the managerial policies and performance is .

Correct : B. profitability ratios.

33. Return on investment is a .

Correct : C. profitability ratios.

34. Net profit ratio is a .

Correct : D. profitability ratio.

35. Stock turnover ratio is a .

Correct : A. turnover ratio.

36. Current ratio is a

Correct : A. short-term solvency ratio.

37. Proprietary ratio is a .

Correct : B. long-term solvency ratio.

38. Fixed assets ratio is a

Correct : B. long-term solvency ratio.

39. Fixed assets turnover ratio is a

Correct : D. turnover ratio.

40. The ratio which measures the profit in relation to capital employed is known as

Correct : A. return on investment.

41. The ratio which determines the profitability from the shareholder’s point of view is .

Correct : C. return on shareholders funds.

42. Return on equity is also called

Correct : D. return on net worth.

43. Prepaid expenses is an example of .

Correct : B. current assets.

44. The ratio which is calculated to measure the productivity of total assets is

Correct : C. return on total assets.

45. The ratio which shows the proportion of profits retained in the business out of the current year’s profits is

Correct : A. Retained earnings ratio.

46. The ratio which indicates earnings per share reflected by the market price is .

Correct : D. price earnings ratio.

47. The ratio establishes the relationship between profit before interest and tax and fixed interest charges is.

Correct : A. interest cover ratio.

48. The ratio shows the preference dividend as a proportion of profit available for shareholders is .

Correct : B. fixed dividend cover ratio.

49. The dividend is related to the market value of shares in .

Correct : D. dividend yield ratio.

50. . Turnover ratio is also known as .

Correct : A. activity ratios.

51. Inventory or stock turnover ratio is also called .

Correct : A. stock velocity ratio.

52. Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital investment?

Correct : A. stock velocity ratio.

53. The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is

Correct : A. Stock turnover ratio.

54. Sales – Gross Profit = .

Correct : D. cost of goods sold.

55. Opening stock + purchases + direct expenses – closing stock =

Correct : D. cost of goods sold.

56. Which ratio measures the number of times the receivables are rotated in a year in terms of sales?

Correct : B. debtors turnover ratio.

57. Debtors turnover ratio is also called .

Correct : B. debtors velocity ratio.

58. Creditors turnover ratio is also called .

Correct : C. . accounts payables ratio.

59. The indicates the number of times the payables rotate in a year is _.

Correct : C. creditors velocity ratio.

60. Funds flow statement is based on the .

Correct : A. working capital concept of funds.

61. All those assets which are converted into cash in the normal course of business within one year are known as .

Correct : B. current assets.

62. All those liabilities which are payable in cash in the normal course of business within a period of one year are called _.

Correct : D. current liabilities.

63. Any transaction between a current account and another current account does not Affect .

Correct : B. funds.

64. Any transaction between a non current account and another non current account does not affect .

Correct : B. funds.

65. Principle’ for preparation of working capital statement -Increase in current asset .

Correct : A. increases working capital.

66. Principle’ for preparation of working capital statement - Decrease in current asset .

Correct : B. decreases working capital.

67. Principle’ for preparation of working capital statement -Increase in current liability .

Correct : B. decreases working capital.

68. Principle’ for preparation of working capital statement -Decrease in current Liability .

Correct : A. increases working capital.

69. Depreciation on fixed assets is .

Correct : D. non operating expense.

70. Production cost under marginal costing includes .

Correct : C. . prime cost and variable overhead.

71. One of the primary differences between marginal costing and absorption costing regarding the treatment of .

Correct : B. fixed overheads.

72. Absorption costing differs from marginal costing is the .

Correct : B. amount of costs assigned to individual units of products .

73. Contribution margin is also known as .

Correct : A. marginal income .

74. Period costs are .

Correct : D. fixed costs.

75. Contribution margin is equal to .

Correct : A. fixed cost - loss .

76. P/V Ratio is an indicator of .

Correct : D. the rate of profit.

77. Margin of Safety is the difference between .

Correct : B. actual sales and break-even sales.

78. An increase in variable costs .

Correct : C. reduces contribution .

79. An increase in selling price .

Correct : B. decreases the break-even point.

80. A large Margin of Safety indicates .

Correct : C. the soundness of the business.

81. Angie of incidence is .

Correct : A. the angle between the sales line and the total cost line.

82. CVP analysis is most important for the determination of .

Correct : A. sales revenue necessary to equal fixed costs .

83. The conventional Break-even analysis does not assume that .

Correct : B. total fixed costs remain the same.

84. 1f` fixed costs decrease while variable cost per unit remains constant, the new B.E.P in relation to the old B.E.P will be .

Correct : B. higher.

85. If fixed costs decrease while the variable cost per unit remains constant, the new contribution margin in relation to the old contribution margin will be .

Correct : B. unchanged .

86. Selling price per unit Rs. 10; Variable cost Rs. 8 per unit; Fixed cost Rs. 20,000; Break-even production in units .

Correct : D. 2,500.

87. Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break-even sales in value .

Correct : B. Rs. 7,353.

88. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; turnover required for a profit target of Rs. 60,000.

Correct : A. Rs. 1,75,000.

89. Sales Rs. 25,000; Variable cost Rs. 15,000; Fixed cost Rs .4,000; P/V Ratio is .

Correct : A. 40% .

90. Sales Rs. 50,000; Variable cost Rs. 30,000; Net profit Rs. 6,000; fixed cost is .

Correct : B. b. Rs. l4,000 .

91. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is _.

Correct : C. 37.5% .

92. P/V Ratio 50%; Variable cost of the produce Rs. 25; Selling price is .

Correct : A. Rs. 50 .

93. Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of' profit is .

Correct : B. Rs. 40,000 .

94. P/V Ratio is 25% and Margin of Safety is Rs; 3,00,000, the amount of profit is .

Correct : C. Rs. 75,000.

95. Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40%; Break-even capacity in percentage is .

Correct : C. 50% .

96. Break - even point occurs at 40% of` total capacity, margin of safety will be .

Correct : B. 60% .

97. If the P/V Ratio of a product is 30% and selling price is Rs. 25 per unit, the marginal cost of the product would be .

Correct : A. Rs.18.75 .

98. Absorption costing is also known as .

Correct : A. historical costing.

99. Under marginal costing stock are valued at .

Correct : C. variable cost.

100. The budget is a .

Correct : C. an aid to management