Management Accounting - 6

LIST OF ATTEMPTED QUESTIONS AND ANSWERS


Select The Blank
Question Furniture account will always have a ________ balance.
Correct Answer Debit
Your Answer Nil


Multiple Choice Multiple Answer
Question Accounting is the art where transactions are …
Correct Answer Summarized , Classified , Recorded
Your Answer Summarized , Classified , Recorded


True/False
Question The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account.
Correct Answer False
Your Answer False


Select The Blank
Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.
Correct Answer Total variable overhead
Your Answer Total variable overhead


True/False
Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.
Correct Answer True
Your Answer True


Select The Blank
Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc.
Correct Answer Accounting period
Your Answer Accounting period


True/False
Question Standard costs are used for external reporting.
Correct Answer False
Your Answer False


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


Multiple Choice Single Answer
Question Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads ?
Correct Answer Rs.300,000/-
Your Answer Rs.200,000/-


Multiple Choice Multiple Answer
Question The factors to be considered while preparing the direct materials budget are :
Correct Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes
Your Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes


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 Multiple Answer
Question Techniques of management accounting include:
Correct Answer Marginal costing , Budgetary control , Standard costing
Your Answer Marginal costing , Cost control , Budgetary control , Standard costing


Match The Following
Question Correct Answer Your Answer

Profit and loss account Commission received Dividend paid

Manufacturing account Work in Progress Land & Building

Balance Sheet Land & Building Closing stock of finished goods

Trading account Closing stock of finished goods Work in Progress

True/False
Question While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored.
Correct Answer False
Your Answer False


Multiple Choice Multiple Answer
Question If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional profits, then following steps can be taken to achieve the target profit
Correct Answer Increase the selling price , Reduce cost of sales , Increase the selling efforts
Your Answer Increase the selling price , Increase the sales volume , Increase the selling efforts


Multiple Choice Multiple Answer
Question From the following, select intangible assets:
Correct Answer Goodwill , Patents , Trade Marks
Your Answer Patents , Trade Marks , Investments


True/False
Question Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.
Correct Answer True
Your Answer False


Multiple Choice Single Answer
Question Find the budget which is inadequate as a cost control technique :
Correct Answer Fixed budget
Your Answer Fixed budget


True/False
Question Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.
Correct Answer True
Your Answer True


Multiple Choice Single Answer
Question Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer Rs.3,00,000/-
Your Answer Rs.3,00,000/-


Select The Blank
Question ________ is an example of intangible asset.
Correct Answer Goodwill
Your Answer Land


True/False
Question Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer True
Your Answer True


True/False
Question Goods sent to the customers on approval basis should be treated as sales.
Correct Answer False
Your Answer False


Multiple Choice Multiple Answer
Question Features of Sunk cost are . . .
Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past
Your Answer Indicates historical cost , Incurred in past , Relevant in decision making process


True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Your Answer True


True/False
Question A business is an activity carried out with the intention of earning the profit.
Correct Answer True
Your Answer True


Multiple Choice Multiple Answer
Question Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand.
Correct Answer For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour.
Your Answer For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour.


Multiple Choice Multiple Answer
Question Techniques of management accounting include:
Correct Answer Marginal costing , Budgetary control , Standard costing
Your Answer Marginal costing , Cost control , Budgetary control


True/False
Question The ideal budget period for a company engaged in generation and distribution of electricity is one year.
Correct Answer False
Your Answer False


Select The Blank
Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year.
Correct Answer Depreciation
Your Answer Depreciation


True/False
Question According to Reducing Balance Method, the depreciation is provided at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged.
Correct Answer True
Your Answer True


Select The Blank
Question Crane expenses should be apportioned on the basis of ________.
Correct Answer Number of hours crane worked in the department
Your Answer Number of hours crane worked in the department


Multiple Choice Multiple Answer
Question Essentials for effective implementation of budgetary control system are
Correct Answer Commitment of top management , Clearly defined objectives , Continous budget education
Your Answer Commitment of top management , Clearly defined objectives , Continous budget education


Multiple Choice Single Answer
Question Commission payable to General Manager is 10 % of the net profits. If the net profit before charging commission is Rs.29,200/-, then what will be the amount of his net profit after commission?
Correct Answer Rs.26,545.45
Your Answer Rs.29,200/-


Select The Blank
Question A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed.
Correct Answer Budget
Your Answer Budget


True/False
Question A very wide scope of Management Accounting is the limitation by itself.
Correct Answer True
Your Answer True


Select The Blank
Question The combination in which different products are sold by a company is known as ________.
Correct Answer Sales mix
Your Answer Sales mix


Multiple Choice Single Answer
Question The reporting method used in the costing system should be based on the principle of
Correct Answer Management by exception
Your Answer Management by objectives


True/False
Question Balance sheet indicates the financial status of the business at given period.
Correct Answer True
Your Answer True


Multiple Choice Single Answer
Question The wages paid to maintenance department workers who do repair work principally for production departments but also on the vehicles in the distribuiton department shoud be charged as:
Correct Answer Service costs
Your Answer Service costs


Multiple Choice Single Answer
Question M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as
Correct Answer Drawings
Your Answer Capital


Select The Blank
Question Measurement of ________ gives an idea of the degree of mobility of labour.
Correct Answer Labour turnover
Your Answer Labour turnover


Multiple Choice Single Answer
Question Net profit for the year before charging commission to the manager, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on net profits after charging commission. Find the amount of commission due to the manager.
Correct Answer Rs.8,279.63
Your Answer Rs.8,942/-


Match The Following
Question Correct Answer Your Answer

Total cost Cost of finished goods Cost of finished goods

Non operating income Profit on sale of investment Profit on sale of investment

Selling and distribution overheads Advertisement expenses Advertisement expenses

Factory overheads Repair for factory building Repair for factory building

True/False
Question Control on purchase of material is exercised by the storekeeper.
Correct Answer False
Your Answer True


Multiple Choice Single Answer
Question A company wishes to earn a 15% profit margin on selling price when quoting for a job. Which of the following is the profit margin of cost which will achieve the required profit margin ?
Correct Answer 0.1765
Your Answer 0.15


Select The Blank
Question Economical use of labour, materials and facilities can achieved with the help of ________.
Correct Answer Budgetary control
Your Answer Cost control

Posted in: Management Accounting (Set II)