Management Accounting - 8

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False
Question Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.
Correct Answer True
Your Answer False

True/False
Question The rates at which the depreciation is to be calculated are specified in the Income Tax Act 1961 and The Companies Act, 1956.
Correct Answer True
Your Answer True

Select The Blank
Question The various contents of a uniform cost manual are organisation, cost accounting system and ________.
Correct Answer presentation of information
Your Answer organisation structure

True/False
Question It is said that marginal costs are used primarily in guiding decisions that are yet to be made.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Select the examples of functional budgets:
Correct Answer Sales budget , Production budget , Research and development budget
Your Answer Sales budget , Production budget , Capital expenditure budget

Multiple Choice Single Answer
Question A business's telephone bill should nromally be classified into which one of the following categories?
Correct Answer Semi-variable cost
Your Answer Variable cost

Match The Following
Question Correct Answer Your Answer

Closed the account with State Bank of India Henceforth, there shall be no difference in overdraft balances Henceforth, there shall be no difference in overdraft balances

Debit side of bank book is overcast Overdraft as per bank book < Overdraft as per pass book Overdraft as per bank book = Balanceas per pass book

Interest on debentures directly credited by bank Overdraft as per bank book > Overdraft as per pass book Overdraft as per bank book = Overdraft as per pass book

Received sanction for a loan of Rs.10 lakhs Overdraft as per bank book = Overdraft as per pass book Overdraft as per bank book < Overdraft as per pass book


Multiple Choice Single Answer
Question The total production cost for making 20,000 units was Rs.21,000/- and the total production cost for making 50,000 units was Rs.34,000/-. Once production exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The full production cost per unit of making 30,000 units is:
Correct Answer Re.0.98
Your Answer Re.0.68

Select The Blank
Question The process of finding the reasons for the difference in the balance as per bank book and pass book is known as ________.
Correct Answer Reconciliation
Your Answer Reconciliation

Multiple Choice Multiple Answer
Question State the features of these transactions : (i) Commission paid Rs.250/- was posted twice to Commission account (ii) Rs.5,000/- representing goods sold to A, was posted to the credit to commission received account (iii) Sold machine for Rs.8000/-, was credited to Sales account.
Correct Answer The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission
Your Answer The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission

Multiple Choice Single Answer
Question It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because :
Correct Answer The cost structure is different
Your Answer The cost structure is different

Multiple Choice Single Answer
Question Balance sheet is statement of
Correct Answer All Assets and Properties
Your Answer All Assets and Properties

Select The Blank
Question The closing stocks should ________ the cost of the goods which sent on approval basis.
Correct Answer Be increased by
Your Answer Not get affected by

True/False
Question Under the Rowan plan bonus is a fixed percentage.
Correct Answer False
Your Answer True

True/False
Question Idle time variance is always favourable.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question Select the items which may be classified as selling and distribution overheads.
Correct Answer Delivery van expenses , Rent of finished goods warehouse , Sales research expenses
Your Answer Delivery van expenses , Rent of finished goods warehouse , Rent of raw material godown

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 Cost

Multiple Choice Single Answer
Question Compute actual total cost based on the data given below: Total standard cost (standard material cost + standard labour cost) -Rs.19,633.33; labour rate variance-Rs.900/- (adverse); material price variance -Rs.90/- (Favourable); material yield variance -Rs.700/- (Favourable); labour yield variance -Rs.333.33 (Favourable).
Correct Answer Rs.19,410/-
Your Answer Rs.17,610/-

Multiple Choice Single Answer
Question The standard production for a particular work order is 20 units per day and piece rate wages is 60 paise per unit. Cost of material is 30 paise per unit. It is proposed to charge factory overheads equal to 100% of labour cost. Indicate the factory overhead per unit.
Correct Answer Rs.1.50/-
Your Answer Rs.1.30/-

Multiple Choice Multiple Answer
Question The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are capable of nullifying this balance.
Correct Answer Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as , The total of the purchase book was cast short by Rs.44,000/-
Your Answer Free samples worth Rs.40,000/- distributed during the year were credited to sales account , Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as

Multiple Choice Single Answer
Question Panna Ltd. temporarily has excess production capacity. The idle plant facilties can be used to manufacture a low-margin item. The low-margin item should be produced if it can be sold for more than its:
Correct Answer Variable costs
Your Answer Variable costs

Select The Blank
Question Contribution represents pool of resources available for meeting all costs other than ________.
Correct Answer Variable costs
Your Answer Variable costs

Select The Blank
Question Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register.
Correct Answer Purchase
Your Answer Purchase

Multiple Choice Multiple Answer
Question From the available information calculate sales value variance and budgeted sales quantity of X.Actual sales of X -500 units; budgeted price per unit -Rs.12/-; actual price per unit-Rs.15/- and sales volume variance -Rs.1,200/- (Favourable).
Correct Answer Budgeted sales - 400 units , Sales value variance -Rs.2,700/- , The sales value variance is favourable
Your Answer The sales value variance is adverse

True/False
Question Depreciation, interest and property tax continue even when the operations are discontinued.
Correct Answer True
Your Answer True

Select The Blank
Question The balance of the suspense account will ________ after all the errors are
Correct Answer become zero
Your Answer become zero

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 , Planning and controlling activities

True/False
Question It is said that the income statement represents wealth increase /decrease for the organisation.
Correct Answer True
Your Answer False

Select The Blank
Question The difference between sales and prime cost is known as ________.
Correct Answer Gross Profit
Your Answer Gross Profit

Multiple Choice Multiple Answer
Question In which of the following situations, the flexible budget should be preferred?
Correct Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity
Your Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

Multiple Choice Single Answer
Question Debtors as on 31st March, 2004 stood as Rs.75,400/-. Out of this amount, Rs.15,884/- is receivable from ABC & Co. Also, Rs.21,555/- included in the creditors, indicates amount due to ABC & Co. Total creditors as on 31st March, 2004 = Rs.88,466/-. Find the amount of debtors and creditors that should be disclosed in the balance sheet as on 31st March, 2004.
Correct Answer Debtors - Rs.59,516/-; Creditors - Rs.66,911/-
Your Answer Debtors - Rs.53,845/-; Creditors - Rs.72,582/-

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


Select The Blank
Question Cost volume profit analysis focuses attention on the ________ effect of a particular course of action.
Correct Answer short run
Your Answer short and long run

Multiple Choice Multiple Answer
Question The balance as per bank book as on 30th June, 2004 is Rs.10,298/- while the balance as per pass book as on the same date is Rs.10,123.60. Select the transactions representing the reasons for this difference.
Correct Answer Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of the cash book is overcast by Rs.100/-
Your Answer Interest credited by bank, not entered in the bank book, Rs.125.60

Multiple Choice Single Answer
Question Uniform costing system is useful in the following areas
Correct Answer Classification of cost accounts
Your Answer Preparing financial statements

True/False
Question Revenue expenditure indicates the amount of funds spent during a certain period with the intention to receive the returns in future.
Correct Answer False
Your Answer True

True/False
Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry.
Correct Answer True
Your Answer True

True/False
Question Cheque received from a client on 28th September, 2004 must be entered in the bank book only after it is credited in the pass book.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question The objectives of Uniform costing system are as follows :
Correct Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs
Your Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs

Multiple Choice Multiple Answer
Question Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were delivered directly to the plant situated at Nagar and hence this transaction was not recorded in the purchase book, which is maintained at the corporate office. Analyse the impact of this transaction.
Correct Answer The gross profit will increase by Rs.6,450/-
Your Answer The purhases will increase by Rs.6,450/- , The closing stock will increase by Rs.6,450/- , The gross profit will increase by Rs.6,450/-

Select The Blank
Question Carriage charges paid for a new machine purchased if debited to carriage account would affect the ________
Correct Answer Machinery A/c and carriage A/c
Your Answer Carriage A/c

Multiple Choice Multiple Answer
Question Different types of tenders are :
Correct Answer Singly tender , Open tender , Global tender
Your Answer Multiple tender , Open tender , Global tender

Multiple Choice Single Answer
Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited?
Correct Answer Investment account - Rs.170,000/-
Your Answer Investment account - Rs.170,000/-

Multiple Choice Single Answer
Question Basic objective of Uniform Costing is . . .
Correct Answer comparison
Your Answer To control cost

Multiple Choice Multiple Answer
Question Select the entries which need to be rectified
Correct Answer Purchase A/c ......... Dr. to Damodar's A/c (Being furniture purchased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh for goods sold to him for)
Your Answer Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased)

Multiple Choice Single Answer
Question A new computer worth Rs.35,000 was purchased on 18th June, 2003. The company has 10 such computers costing Rs.20,000/- each. The depreciation is charged @ 18% p.a. Find the depreciation on computers to be charged for the year.
Correct Answer Rs.40,953.70
Your Answer Rs.36,000/-

Select The Blank
Question The varinace that attempts to ascertain the effect of change in sales volume on the difference between actual and budgeted contribution is known as ________ variance.
Correct Answer Sales margin volume
Your Answer Sales margin yield