Advanced Accountancy- XI MCQ and IMP Short Notes

 

Advanced Accountancy- XI

A) Choose the correct alternative from given below                                   

1.  …………… is the detailed planning for the allocation of funds in a business.

a) Budgetary control               b) Budgeting  

c) Financing                            d) All of the above

2.  Basic objective of budgeting is……………….

a) Planning                  b) Coordination           c) Control                    d) All of the above

3. …………. is a statement of budget policies and procedures.

a) Budget                   b) Budget policies      

c) Budget manual      d) Budget control

4. …………. is a total cost technique under which total cost is charged as production cost.

a) Absorption costing                        b) Marginal costing    

c) Job costing                          d) Process costing

5. The break-even point is the point at which

a) There is no profit no loss                 b) Contribution margin is equal to total fixed cost

c) Total revenue is equal to total cost           d) All of the above

6. Margin of safety is referred to as…………….

a) Excess of actual sales over fixed expenses            

b) Excess of actual sales over variable expenses                    

c) Excess of actual sales over break-even sales      

d) Excess of actual sales over fixed costs

7.  When standard cost is more than actual cost is called as …………… variance.

a) Favorable                        b) Unfavorable            c) Profit                       d) All of the above

8. Material price variance is the responsibility of……………..

a) Production Manager                       b) Sales Manager        

c) Marketing Manager                         d) Purchase Manager

9. …………..is a method of restating financial statements in units of general purchasing power.

a) Corporate Accounting                    b) Inflation Accounting

c) Management Accounting                d) Financial Accounting

10. Current purchase price = …………….× Price index at the date of conversion ÷ Price index at the date of acquisition.

a) Historical cost figure                     b) Market cost

c) Book Value                                     d) None of the above

11. A budget that gives a summary of all the functional budgets is known as …………...

a) Capital budget                    b) Flexible budget                   

c) Master budget                   d) Discretionary budget

12.  …………… is the analysis of actual performance against the planned performance so that corrective action may be taken.

a) Budgetary control             b) Budgeting    

c) Financing                            d) All of the above

13. Budget is a plan which is prepared on the basis of…………..

a) Demand                 b) Forecast                 c) Time                       d) Sales

14. ……………. = Contribution ÷ Sales

a) Break Even Point                b) Margin of Safety   

c) Key Factor                          d) P/V Ratio

15. ………… is that level of production and sales where there is no profit and no loss.

a) Break Even Point              b) Margin of Safety   

c) Key Factor                          d) P/V Ratio

16. …………….. is explaining the variance between actual cost and standard cost.

a) Break even point                 b) CVP analysis

c) Cost analysis                       d) Variance analysis

17.  …………… is the difference between standard cost and actual cost of material.

a) Material price variance                    b) Material cost variance     

c) Material usage variance                   d) Material yield variance

18. …………… = Idle hours × Standard rate

a) Labour rate variance                       b) Labour time variance         

c) Idle time variance                          d) Labour mix variance

19. There are ……….. methods of accounting for price level changes.

a) Two                                    b) Three

c) Four                         d) Five

20. Shareholders’ funds does not include ……………..

a) Share capital                        b) Reserves     

c) Surplus                                d) Debentures

21.  Budget committee is generally headed by ……………….

a) Marketing manager             b) Human resource manager  

c) Production manager            d) Financial controller

22.  …………… budget is prepared first and all other budgets are prepared in coordination with this budget.

a) Production              b) Sales           c) Purchase                  d) Master

23. ………….. budget is a projection of the cash a company will receive and the cash it will pay out during the budget period.

a) Bank            b) Production             c) Sales            d) Cash

24. …………… costing is used for internal reporting.

a) Contract                  b) Process        c) Variable                 d) Absorption

25. Cost volume profit analysis shows the relationship between…………….

a) Cost of production                          b) Volume of production

c) Profit                                               d) All of the above

26. …………. = Actual sales – Break-even point

a) P/V Ratio                            b) Margin of safety

c) Break-even point                 d) CVP analysis

27.  ………….. arises due to difference between standard price and actual price of direct materials.

a) Material price variance                b) Material cost variance        

c) Material usage variance                   d) Material yield variance

28. ………….. is the difference between standard and actual labour rates.

a) Labour time variance          b) Labour cost variance          

c) Labour rate variance        d) Ideal time variance

29. ………… is a system of accounting which purports to record as a built in mechanism of economic events in terms of current cost.

a) Financial accounting                       b) Marginal costing

c) Variable costing                              d) Inflation accounting

30. ………….. is the method of accounting for price level changes.

a) Current purchasing power               b) Current cost accounting     

c) Both of the above                          d) None of the above

 

B)  State whether the following statements are true or false.                                                           

1. Budget period varies according to nature of budget. True

2. For calculating taxable income marginal costing is acceptable. False

3. Profit is difference between sales and contribution. False

4. Actual sales × P/V Ratio × Margin of safety ratio = Profit. True

5. Standard cost is scientifically fixed while estimated cost is based on past performance. True

6. Cash and bank are the example of non-monetary items in inflation accounting. False

7. Budgeting is only a tool of management. True

8. Profit is the difference between sales and contribution. False

9. When selling price is reduced P/V ratio is also reduced.  True

10. Material usage variance arises due to difference between standard price and actual price of direct materials. False

11. Overhead cost variance is the difference between absorbed overhead and actual overhead. True

12. Current purchasing power method provides that companies should continue to prepare financial statement on historical cost basis but they should be supplemented by inflation adjusted accounts. True

13. Production overhead budget is prepared for only fixed overheads.  False

14. Limiting factor is the factor in the activities of an undertaking which at a particular point in time or over a period will limit the volume of output. True

15. Standard costing is best suited to companies with repetitive production.  True

16. When actual results are better than standard the variance is unfavorable. False

17. Material mix variance is the algebraic sum of material price variance and material usage variance. True

18. Under current purchasing power method shareholders fund is arrived at by subtracting all the liabilities from all assets. True

Q.2) Write Short Notes (Any Four)                                                                                    

1. Types of Budget

2. Meaning and Characteristics of Absorption Costing  

3. Break-Even Point

4. Material Variances

5. Standard Costing

6. Methods of Accounting for Price Level Changes

7. Limitations of Budgetary Control

8. Meaning and Characteristics of Marginal Costing   .      

9. P/V Ratio and its Uses

10. Labour Variances

11. Advantages of Standard Costing

12. Inflation Accounting and it Objectives

13. Objectives of budgetary control

14. Cost Volume Profit Analysis.      

15. Limiting or Key Factor

16. Overhead Variances

17. Limitations of standard costing

18. Methods of Accounting for Price Level Changes