Management Accounting - 7

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS


 True/False
  Question      Credit balances in all the Personal & Real accounts appear on asset side.
  Correct Answer        False
  Your Answer   False


 Multiple Choice Multiple Answer
  Question      Contents of Uniform Cost Manual are
  Correct Answer        Organization , Cost Accounting system , Presentation of information
  Your Answer   Organization , Cost Accounting system , Presentation of information


 Multiple Choice Multiple Answer
  Question      Uniform Costing Methods may be advantageously applied to . . .
  Correct Answer        Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.
  Your Answer   Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.


 True/False
  Question      1) Financial statements are basically in two forms i.e. profitability statement and balance sheet.
  Correct Answer        True
  Your Answer   True


 Multiple Choice Multiple Answer
  Question      The process of accounting has three streams of accounting ---------------,--------and ----------------------.
  Correct Answer        Financial Accounting , Cost Accounting , Management Accounting
  Your Answer   Financial Accounting , Cost Accounting , Management Accounting


 True/False
  Question      Long term loan borrowed from financial institution comes under the heading of long term liabilities.
  Correct Answer        True
  Your Answer   True


 Match The Following
Question        Correct Answer  Your Answer

Book-Keeping    Books of Accounts       Books of Accounts

Financial statement     Profitability statement & Balance-sheet Profitability statement & Balance-sheet

Accounting      Process of analyzing & interpretation   Process of analyzing & interpretation

Profitability statement Indicates the amount of profit earned   Indicates the amount of profit earned

Balance-sheet   Financial status        Financial status



 Multiple Choice Single Answer
  Question      Judge the statement according to the criteria given : ' The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January,
  Correct Answer        The statement and its reason are both incorrect
  Your Answer   The statement is correct but its reason is incorrect


 Multiple Choice Multiple Answer
  Question      Features of money measurement concept are . . .
  Correct Answer        Only those transactions and facts are included expressed in terms of money are considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting
  Your Answer   Only those transactions and facts are included expressed in terms of money are considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting


 Multiple Choice Single Answer
  Question      The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations
  Correct Answer        Management
  Your Answer   Management


 Select The Blank
  Question      ________account can be defined as the record of all the transactions pertaining to a person, asset, liability income or expenditure which have taken place in a specified period.
  Correct Answer        Ledger
  Your Answer   Trading


 Match The Following
Question        Correct Answer  Your Answer

Sunk Cost       Historical Cost Historical Cost

Cost Centre     Facilitate the fixation of responsibility       Facilitate the fixation of responsibility

Cost Control    Process of controlling costs of operations      Process of controlling costs of operations

Differential Cost       Increase or Decrease in cost    Increase or Decrease in cost



 Multiple Choice Multiple Answer
  Question      Which of the following transactions should be excluded while preparing a cost sheet ?
  Correct Answer        Interest on loan , Bad debts , Expenses on criminal law suit
  Your Answer   Sale of scrap material , Interest on loan , Bad debts


 True/False
  Question      In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities.
  Correct Answer        True
  Your Answer   True


 True/False
  Question      Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein.
  Correct Answer        False
  Your Answer   False


 True/False
  Question      Primary distribution is effected on the basis of service rendered to the service departments by the production departments.
  Correct Answer        False
  Your Answer   True


 Multiple Choice Multiple Answer
  Question      Marginal costing is found to be unsuccessful in the following situations :-
  Correct Answer        Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature
  Your Answer   Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature


 True/False
  Question      Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein.
  Correct Answer        False
  Your Answer   True


 Multiple Choice Multiple Answer
  Question      Labour efficiency variance arises due to:
  Correct Answer        Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material
  Your Answer   Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material


 True/False
  Question      Financial Accounting discloses the financial performance & financial statements of the business as a whole.
  Correct Answer        True
  Your Answer   True


 True/False
  Question      Balance sheet indicates the expenditure & income from the business.
  Correct Answer        False
  Your Answer   True


 Select The Blank
  Question      The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________.
  Correct Answer        Overhead
  Your Answer   Overhead


 Select The Blank
  Question      A person in charge of a ________ may be held responsible for its proper functioning and cost control.
  Correct Answer        Cost centre
  Your Answer   Cost centre


 Multiple Choice Multiple Answer
  Question      The organization chart shows the following aspects :
  Correct Answer        Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers
  Your Answer   Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers


 True/False
  Question      Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries.
  Correct Answer        False
  Your Answer   False


 True/False
  Question      P&L statement which is a period statement & relates to a certain period tells about results of operations.
  Correct Answer        True
  Your Answer   False


 Select The Blank
  Question      Depreciation charged on office furniture on straight line basis is an example of ________.
  Correct Answer        Administration overheads
  Your Answer   Administration overheads


 True/False
  Question      Under time rate system a worker is paid on the basis of production achieved by him in a given time.
  Correct Answer        False
  Your Answer   False


 Select The Blank
  Question      Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting.
  Correct Answer        Management
  Your Answer   Management


 True/False
  Question      Danger level for inventory of materials means the safety stock of inventory.
  Correct Answer        False
  Your Answer   True


 True/False
  Question      The role of the budget committee may be taken as an advisory role to the Chief Executive.
  Correct Answer        True
  Your Answer   True


 Multiple Choice Multiple Answer
  Question      The main advantages of profit sharing are :
  Correct Answer        Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency
  Your Answer   Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency


 Select The Blank
  Question      ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives.
  Correct Answer        Management
  Your Answer   Management


 Multiple Choice Multiple Answer
  Question      Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost?
  Correct Answer        The level of control of the used of material in the production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores
  Your Answer   An increase in the maximum material inventory level , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores


 Multiple Choice Multiple Answer
  Question      Management accounting is concerned with the following activities :
  Correct Answer        Decision making , Safeguarding assets , Planning and controlling activities
  Your Answer   Decision making , Safeguarding assets , Planning and controlling activities


 Multiple Choice Multiple Answer
  Question      Features of double entry accounting system are . . .
  Correct Answer        Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit
  Your Answer   Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit


 Select The Blank
  Question      Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.
  Correct Answer        90% to 100%
  Your Answer   90% to 100%


 True/False
  Question      Maintenance Department is a service cost centre.
  Correct Answer        True
  Your Answer   True


 True/False
  Question      The process of accounting split into three steams i.e. financial, cost, management accounting.
  Correct Answer        True
  Your Answer   True


 Select The Blank
  Question      The difference between sales and cost of sales is termed as ________.
  Correct Answer        Net Profit
  Your Answer   Net Profit


 Select The Blank
  Question      The final result disclosed by trading account is the ________profit earned by the organization.
  Correct Answer        Gross
  Your Answer   Gross


 Multiple Choice Multiple Answer
  Question      Select the accounts to be disclosed on the liability side of the Balance sheet.
  Correct Answer        Loan , Outstanding expenses , Creditors
  Your Answer   Loan , Outstanding expenses , Creditors


 True/False
  Question      Penalty paid for delay in payment to creditors represents uncontrollable cost.
  Correct Answer        False
  Your Answer   False


 Multiple Choice Single Answer
  Question      Which document facilitates estimating material cost of a particular job, before completion of that job?
  Correct Answer        Bill of material
  Your Answer   Material requisition note


 Multiple Choice Single Answer
  Question      Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.
  Correct Answer        The net profit will not be affected
  Your Answer   The net profit will not be affected


 Multiple Choice Single Answer
  Question      It is said that adoption of uniform costing creates customer confidence because . . .
  Correct Answer        Prices are reliable
  Your Answer   Prices are reliable


 Multiple Choice Single Answer
  Question      An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004.
  Correct Answer        The net profit will not be affected
  Your Answer   The net profit will not be affected