Advanced Accountancy Paper- V (Cost Accounting) MCQ

 

MULTIPLE CHOICE QUESTIONS

M.COM- II Sem- III

Subject – Advanced Accountancy Paper- V

(Cost Accounting)

UNIT- I

1.      ________________ is a specialized or branch of accounting, which is concerned with the techniques and processes of ascertaining cost of product and services.

a.       Management Accounting

b.      Financial Accounting

c.       Cost Accounting

d.      Responsibility Accounting

2.      __________________ is applicable to manufacturing and non-manufacturing activities in which monetary value is involved.

a.       Management Accounting

b.      Cost Accounting

c.       Financial Accounting

d.      Responsibility Accounting

3.      Which of the objectives of cost accounting?

a.       Ascertainment of Cost

b.      Cost Control and Cost Reduction

c.       Determination of Selling Price

d.      All of the above

4.      _____________ is section of the organization, like a person, an equipment a department etc.

a.       Cost Unit

b.      Cost Center

c.       Cost Control

d.      Cost

5.      _______________ is a unit of product like a tone of sugar or service like hotel room per day in relation to which costs are ascertained.

a.       Cost

b.      Cost Unit

c.       Cost Center

d.      Cost Control

6.      ____________, costs are divided into material cost, labour cost and expenses.

a.      Element wise

b.      Functional wise

c.       Decisions wise

d.      Scale wise

7.      The main purpose of cost accounting is to provide detailed cost information to ___________.

a.       External users

b.      Internal users i.e. management

c.       Shareholders

d.      Employees

8.      _______________ are incurred for and conveniently identified with a particular cost unit, process or department, like cost of raw materials.

a.       Fixed Cost

b.      Variable Cost

c.       Direct Cost

d.      Indirect Cost

9.      ________________ remain constant in total amount over a specific range of activity for a specified period of time.

a.       Variable Cost

b.      Indirect Cost

c.       Direct Cost

d.      Fixed Cost

10.  ________________ are the costs which vary in direct proportion to the volume of output.

a.       Fixed Cost

b.      Variable Cost

c.       Direct Cost

d.      Indirect Cost

11.  _____________________ are partly fixed and partly variable cost.

a.      Semi- variable cost

b.      Semi- direct cost

c.       Semi- indirect cost

d.      Explicit cost

12.  The aggregate of direct material cost, direct labour cost and direct expenses is

called as _________________.

a.       Direct Cost

b.      Indirect Cost

c.       Prime Cost

d.      Factory Cost

13.  _________________ is a statement which is prepared periodically to provide detailed element wise cost of a cost center or cost unit.

a.      Cost sheet

b.      Profit and loss account

c.       Balance sheet

d.      Cash Flow Statement

14.  _________________ is a document which provides for the assembly of the detailed cost of a cost center or cost unit.

a.       Fund Flow Statement

b.      Cost Sheet

c.       Cash Flow Statement

d.      Financial Statement

15.  Factory cost + Administration overhead = _______________________

a.       Cost of Goods Sold

b.      Cost of Production

c.       Selling and Distribution Cost

d.      Cost of Sales

16.  Manager’s salary is example of _____________.

a.      Fixed Cost

b.      Variable Cost

c.       Direct Cost

d.      Indirect Cost

17.  Advertisement cost is part of _______________.

a.       Factory overheads

b.      Administrative overheads

c.       Selling and distribution overheads

d.      Prime cost

18.  Which of the following items are excluded from cost sheet______________.

a.       Dividend paid

b.      Provision for bad debts

c.       Preliminary expenses

d.      All of the above

19.  __________________ is part of selling and distribution overheads.

a.       Wages

b.      Salesman Commission

c.       Office expenses

d.      Donation

20.  _________________ reveals the total cost and cost per unit of goods produced.

a.       Balance Sheet

b.      Cost Sheet

c.       Contract Costing

d.      Process Costing

21.  Which of the following is objective of cost accounting

a)      Ascertainment of Cost                  

b) Cost Control and Cost Reduction

c) Determination of Selling Price        

d) All of the above

22. ………… means a location, person or item of equipment or group of these for which costs may be ascertained and used for the purpose of control.

           a) Cost Unit                     b) Cost Center                 c) Cost Control               d) Cost

           23. …………is the technique and process of ascertaining costs.

           a) Cost accounting                            b) Costing         

           c) Financial Accounting       d) Management Accounting

           24. Prime cost + factory overheads = ……………………..

           a) Total cost                                     b) Production cost          

           c) Sales                                           d) Works cost

           25) Direct material + Direct labour + Direct expenses = …………………

           a) Production cost                            b) Total cost       

           c) Prime cost                                  d) Works cost

           26. Which of the following are elements of cost

           a) Material                 b) Labour         c) Overheads                d) All of the above

27. …………….are incurred for and conveniently identified with a particular cost unit, process or department, like cost of raw materials.

           a) Fixed Cost          b) Variable Cost                c) Direct Cost             d) Indirect Cost

           28. Indirect Materials used in production is classified as…………….

           a) Office overhead                      b) Selling overhead  

           c) Distribution overhead           d) Factory overhead

UNIIT - II

1.      Which of the following is not method of pricing?

a.       FIFO

b.      LIFO

c.       Cost Unit

d.      Simple Average Method

2.      _______________ method is based on the assumption that materials which are purchased first are issued first.

a.       LIFO

b.      FIFO

c.       Simple Average Method

d.      Weighted Average Method

3.      _______________ method is based on the assumption that the last materials purchased are the first materials to be issued.

a.      LIFO

b.      FIFO

c.       Simple Average Method

d.      Weighted Average Method

4.      Average prices are of two types_______________.

a.       FIFO and LIFO

b.      LIFO and Simple Average Method

c.       Simple Average and Weighted Average Method

d.      FIFO and Weighted Average Method

5.      ___________________is calculated by adding all the different prices of materials in stocks, from which the materials to be priced could be drawn, by the number of prices used in that total.

a.       Weighted Average Method

b.      Simple Average Method

c.       Last in First Out

d.      First in First Out

6.      ____________________gives due to weightage to the quantities held at each price when calculating the average price.

a.       LIFO

b.      FIFO

c.       Simple Average Method

d.      Weighted Average Method

7.      ___________________is loss which has necessarily to be incurred and thus is unavoidable.

a.       Abnormal Loss

b.      Normal Loss

c.       Net Loss

d.      Annual Loss

8.      __________________is loss which arises due to inefficiency in operations,  Luck, mischief etc.

a.      Abnormal Loss

b.      Normal Loss

c.       Net Loss

d.      Annual Loss

9.      Reorder Level = _______________________________________.

a.       Emergency Lead Time * Maximum Consumption

b.      Reorder Level + Reorder Quantity

c.       Maximum Consumption - Maximum Lead Time

d.      Maximum Consumption * Maximum Lead Time

10.  Maximum Level = _____________________________________.

a.      Reorder Level + Reorder Quantity – [Minimum Consumption * Minimum Lead Time]

b.      Reorder Level – [Average Consumption * Average Lead Time]

c.       Emergency Lead Time * Maximum Consumption

d.      Maximum Consumption - Maximum Lead Time

11.  Minimum Level = __________________________________________

a.       Emergency Lead Time * Maximum Consumption

b.      Maximum Consumption - Maximum Lead Time

c.       Reorder Level – [Average Consumption * Average Lead Time]

d.      Minimum Stock Level + Maximum Stock Level/ 2

12.  Average Stock Level = ______________________________________

a.       Emergency Lead Time * Maximum Consumption

b.      Minimum Stock Level + Maximum Stock Level/ 2

c.       Maximum Consumption - Maximum Lead Time

d.      Reorder Level + Reorder Quantity

13.  Danger Level = _____________________________________________

a.      Emergency Lead Time * Maximum Consumption

b.      Maximum Consumption - Maximum Lead Time

c.       Reorder Level + Reorder Quantity

d.      Minimum Stock Level + Maximum Stock Level/ 2

14.  __________________________ is the quantity for which order is placed when stock reaches reorder level.

a.       Maximum Level

b.      Minimum Level

c.       Economic Order Quantity

d.      Danger Stock Level

15.  __________________ is also known as EOQ.

a.       Maximum Level

b.      Minimum Level

c.       Reorder Quantity

d.      Danger Stock Level

16.  _____________________ is the cost of placing an order with the supplier.

a.      Ordering Cost

b.      Maximum Consumption

c.       Minimum Consumption

d.      Maximum Level

17.  _____________________ is the cost of holding the stock in the storage.

a.       Cost of Goods Sold

b.      Cost of Production

c.       Cost of Carrying Cost

d.      EOQ

18.  Which are basic methods of labour remuneration?

a.       Time Rate System

b.      Piece Rate System

c.       Both a and b

d.      One of the above

19.  Under ________________ workers are paid according to the time for which they work.

a.      Time Rate System

b.      Piece Rate System

c.       Labour Rate System

d.      Average Rate System

20.  According to _____________________ wages are paid on quantity of work done.

a.       Time Rate System

b.      Piece Rate System

c.       Labour Rate System

d.      Average Rate System

21.  The __________________________ is the rate of change in the composition of the labour force in the organization.

a.       Stock Turnover

b.      Labour Turnover

c.       Employee Turnover

d.      Average Turnover

22.  Classification of overheads divided into three parts___________________________.

a.      by Functional, by Elements and by Behavior

b.      by Management, by Functional and by Administrative

c.       by Organizational, by Elements and by Behavior

d.      by Management, by administrative and by organizational

23.  _________________ has been defined as the allotment of whole items of cost to cost centers or cost units.

a.       Absorption

b.      Allocation

c.       Acquisition

d.      All of the above

24.  _________________ is the allotment of proportions of items of cost to cost centers or cost units.

a.      Apportionment

b.      Absorption

c.       Allocation

d.      Acquisition

25.  Materials issued are priced at the latest price in………………

a)      FIFO                                       b) LIFO                      

c) Simple average                          d) weighted average

26. ………………….is loss which has necessarily to be incurred and thus is unavoidable.

a) Abnormal Loss                   b) Normal Loss                

c) Net Loss                              d) Annual Loss

27. Minimum Level = ………………………….

a) Emergency Lead Time * Maximum Consumption       

b) Maximum Consumption - Maximum Lead Timec. Reorder Level – [Average Consumption * Average Lead Time]                                         

c) Reorder Level – [Average Consumption * Average Lead Time]   

d) Minimum Stock Level + Maximum Stock Level / 2

28. Danger level is below the ………………level

a) Minimum level                 b)Maximum Level  

c) Average Level                   d) Re- order Level

29) Over time is………………

a) Actual hours being more than normal time 

b) Actual hours being more than standard time   

c) Standard hours being more than actual hours  

d) Actual hours being less than standard time

UNIT - III

1. _____________________ also known as terminal costing.

a.       Process Costing

b.      Contract Costing

c.       Operating Costing

d.      Reconciliation Statement

2. _______________is used in building construction, road construction, ship and building etc.

a.       Process Costing

b.      Contract Costing

c.       Operating Costing

d.      Reconciliation

3.__________________ is that part of the work in progress which is approved by the architect for payment.

a.      Work Certified

b.      Work Uncertified

c.       Work Distribution

d.      Work not distribution

4._____________________ is that part of work in progress which is not approved by the architect.

a.       Work Certified

b.      Work Uncertified

c.       Work Distribution

d.      Work not distribution

5.______________________ in contracts are often provided as safeguards against any likely changes in price of material and labour rates.

a.       Efficient Clauses

b.      Stock Clauses

c.       Management Clauses

d.      Escalation Clauses

6. ______________________represents the production of a process in terms of completed units.

a.       Escalation Clauses

b.      Equivalent Production

c.       Cost of Production

d.      Cost of Goods Sold

7. ______________________ is a method of cost ascertainment which is used in mass production industries producing standard products like steel, sugar and chemicals etc.

a.       Contract Costing

b.      Process Costing

c.       Operating Costing

d.      EOQ

8._______________________ requires accounting adjustment relating to process losses, valuation of work-in-progress and inter process profits.

a.      Process Costing

b.      Contract Costing

c.       Operating Costing

d.      Reconciliation Statement

9.________________________ is a method of cost ascertainment used in those undertakings which are engaged in providing services, such as transport, electricity etc.

a.       Process Costing

b.      Contract Costing

c.       Operating Costing

d.      Reconciliation Statement

10. The cost of providing a service is termed as _____________________.

a.       Process Costing

b.      Contract Costing

c.       Operating Costing

d.      Reconciliation Statement

11.     In which operating costing is not applicable?

a.       Railway

b.      Road Transport Company

c.       Shipping Company

d.      Manufacturing Company

12.      _________________ can be used in internal transport department of a factory.

a.      Operating Costing

b.      Process Costing

c.       Contract Costing

d.      Material Cost

13. Abnormal process loss is transferred to …………

a)      Process account                                   b) Costing profit and loss account

c) Profit and loss account                         d) Cost sheet

14. Escalation Clause protect the interest of the ……………. against unfavorable changes in cost.

a) Trader               b) Contractor             c) Contractee               d) All of the above

                 15. The basis for the payment of cash by contractee under contract is………………….

                 a) Work certified             b) Work uncertified   

                 c) Contract cost                  d) None of the above

16. ……………..is that part of the work in progress which is approved by the architect for payment.

a) Work Certified             b) Work Uncertified              

c) Work Cost                      d) All of the above

                 17. Abnormal gain units and its value are…………..

                 a) Debited to that process account          b) Credited to that process account   

                 c) Debited to costing P& L account           d) Debited to profit and loss account

18. ……………..is used in building construction, road construction and ship construction.

a) Process Costing              b) Contract Costing             

c) Operating Costing          d) Reconciliation

19. ……………..is a method of cost ascertainment used in those undertakings which are engaged in providing services such as transport and electricity.

a) Contract costing             b) Process costing      

c) Batch costing                  d) Operating costing

                 20. In goods transport service the cost unit is……………..

                 a) Cost per ton                    b) Cost per hour                     

                 c) Cost per vehicle              d) Cost per ton kilo meters

                 21. The expenses relating to a particular process is ………………..

                 a) Debited to that process account                      b) Credited to that process account   

                 c) Debited to costing P& L account           d) Debited to profit and loss account

                 22. If actual loss is less than normal loss then it is termed as……………

                 a) Normal loss                     b) Abnormal loss                    

                 c) Abnormal gain              d) Standard loss

                 23. Operating costing is not applicable to…………….

                 a) Railway                          b) Road Transport Company 

                 c) Shipping Company         d)  Manufacturing Company

                 24. The finished output of the last process is transferred to the ………………

                 a) Process account                          b) Profit and loss account      

                 c) Finished goods account                        d) Cost sheet

25. Cost per unit = Total  cost - Value of normal loss ÷ Units introduced -   ………………

a) Normal loss                     b) Normal Loss Units                       

c) Abnormal loss                 d) Abnormal loss units

                 UNIT- IV

1.    ________________is a system in which cost and financial accounts are kept in the same of books.

a.       Financial Accounting

b.      Integral Accounting

c.       Non- Integral Accounting

d.      Cost Accounting

2.    When books are merged or integrated, the system is known as _______________

a.    Integrated Accounts or integral system

b.    Non integral account

c.    Cost accounting

d.   Responsibility accounting

3.    When cost and financial books are kept separately, it is called as ______________

a.    Financial Accounting

b.    Integral Accounting

c.    Non- Integrated Account

d.   Cost Accounting

4.                                                                                        4. _______ also helps in checking the arithmetic accuracy of the costing data.

a.      Reconciliation

b.      Memorandum Reconciliation Account

c.       Financial Account

d.      Cost Account

5.    ___________________ discloses the reasons for difference in profit or loss between cost and financial accounts.

a.       Memorandum Reconciliation Account

b.      Financial Account

c.       Cost Account

d.      Reconciliation

6.    The reasons for the difference in profit or loss between cost and financial accounts on the basis of ______________________.

a.       Items which appear in financial accounts but not in cost account.

b.      Items which are included in cost accounts but not in financial account.

c.       Inventory valuation in the two set of books may be by different methods.

d.      All of the above

7.    When change in lieu of rent when premises are owned and no rent is payable is called ____________.

a.      Notional Rent

b.      National Rent

c.       Rent

d.      Average Rent

8.     A ___________________ is that the information shown in the reconciliation statement is shown in the form of an account.

a.       Reconciliation

b.      Memorandum Reconciliation Account

c.       Profit and Loss Account

d.      Financial Statement

9. In ……………..  the information shown in the reconciliation statement is shown in the form of an account.

a)      Reconciliation                    b) Financial Statement           

c) Profit and Loss Account      d) Memorandum Reconciliation Account

10. When change in lieu of rent when premises are owned and no rent is payable is called ……………..

a) National Rent                                   b) Rent                       

c) Notional Rent                                 d) Average Rent

  11. The difference in profit or loss between cost and financial accounts may arise due to ……………….

a) Items which appear in financial accounts but not in cost account  

b) Items which are included in cost accounts but not in financial account    

c) Inventory valuation in the two set of books may be by different methods

d) All of the above

           12. The cost and financial accounts are reconciled by preparing…………….

           a) Reconciliation statement                            b) Profit and loss account      

           c) Consolidated statement                               d) Financial statement

13. All items which are added to costing profit for reconciliation are shown on the …………….. Side of the Memorandum Reconciliation account.

           a) Asset                b) Liability               c) Credit                     d) Debit

14. All items which are deducted from costing profit for reconciliation are shown on the …………….. Side of the Memorandum Reconciliation account.

a) Liability                b) Asset              c) Credit           d) Debit

15. When financial and cost accounts are maintained separately, the profit / loss shown by these two sets………………….

a) Same                b) Constant             c) differ           d) Increases