Accounting MCQs

Non Trading institution prepare:?

1. A Option A: profit and loss account
2. B Option B: Manufacturing account
3. C Option C: Income and Expenditure Account
4. D Option D: Cost of good sold

Depreciation fund method is also known as?

1. A Option A: Sinking Fund Method
2. B Option B: Annuity Method
3. C Option C: Sum of Year Digits Method
4. D Option D: None of these

Tender is an?

1. A Option A: estimation of profit.
2. B Option B: estimation of cost.
3. C Option C: estimation of selling price.
4. D Option D: estimation of units.

Warehouse rent is a part of?

1. A Option A: prime cost.
2. B Option B: factory cost.
3. C Option C: distribution cost.
4. D Option D: production cost

Overhead cost is the total of

1. A Option A: all indirect costs.
2. B Option B: all direct costs.
3. C Option C: indirect and direct costs.
4. D Option D: all specific costs

Direct cost incurred can be identified with?

1. A Option A: Each Department
2. B Option B: Each unit of output
3. C Option C: Each Month
4. D Option D: Each Executive

The process of paying off debt over time in regular installment of interest & principal sufficient to repay the loan in fully by its maturity date.

1. A Option A: Amortization
2. B Option B: Loan Payment
3. C Option C: Liability
4. D Option D: Securitization

Find the cost of goods sold if goods are sold for 2,000 at 25% profit on cost?

1. A Option A: 1,600
2. B Option B: 1,500
3. C Option C: 1,000
4. D Option D: 1,800

A Ltd. Has sales of 2,200, total fixed cost of 570, variable cost of 1,540, raw material consumed of ` 1,100, number of units sold 22,000. What shall be the BEP 9 in units) if raw material price is reduced by 2%?

1. A Option A: 18,387
2. B Option B: 18,560
3. C Option C: 18,750
4. D Option D: 19,000

One of the most important tools in cost planning is?

1. A Option A: Direct cost
2. B Option B: Cost Sheet
3. C Option C: Budget
4. D Option D: Marginal Costing.

A worker has a time rate of 15/hr. He makes 720 units of component (standard time: 5 minutes/ unit) in a week of 48 hours. His total wages including Rowan bonus for the week is

1. A Option A: 792
2. B Option B: 820
3. C Option C: 840
4. D Option D: 864

If the minimum stock level and average stock level of raw material are 4,000 and 9,000 units respectively, find out its reorder quantity.

1. A Option A: 8,000 units
2. B Option B: 11,000 units
3. C Option C: 10,000 units
4. D Option D: 9,000 units

Consider the following data pertaining to the production of a company for a particular month:

Opening stock of raw material 11,570 Closing stock of raw material 10,380 Purchase of raw material during the month 1,28,450 Total manufacturing cost charged to product 3,39,165 Factory overheads are applied at the rate of 45% of direct labour cost. The amount of factory overheads applied to production is

1. A Option A: 65,025
2. B Option B: 94,287
3. C Option C: 95,020
4. D Option D: 1,52,624

A company is currently operating at 80% capacity level. The production under normal capacity level is 1,50,000 units. The variable cost per unit is ` 14 and the total fixed costs are ` 8,00,000. If the company wants to earn a profit of ` 4,00,000, then the price of the product per unit should be

1. A Option A: 37.50
2. B Option B: 38.25
3. C Option C: 24.00
4. D Option D: 35.00

If the asset turnover and profit margin of a company are 1.85 and 0.35 respectively, the return on investment is.

1. A Option A: 0.65
2. B Option B: 0.35
3. C Option C: 1.50
4. D Option D: 5.29

Budgeted sales for the next year is 5,00,000 units. Desired ending finished goods inventory is 1,50,000 units and equivalent units in ending W-I-P inventory is 60,000 units. The opening finished goods inventory for the next year is 80,000 units, with 50,000 equivalent units in beginning W-I-P inventory How many equivalent units should be produced?

1. A Option A: 5,80,000
2. B Option B: 5,50,000
3. C Option C: 5,00,000
4. D Option D: 5,75,000

The cost of obsolete inventory acquired several years ago, to be considered in a keep vs. disposal decision is an example of:

1. A Option A: Uncontrollable cost
2. B Option B: Sunk cost
3. C Option C: Avoidable cost
4. D Option D: Opportunity cost

Which of the following bases is not appropriate for apportionment of Transport department‘s cost?

1. A Option A: Crane hours
2. B Option B: Crane value
3. C Option C: Truck Mileage
4. D Option D: Truck value

Consider the following data for a company during the month of June 2012 Budgeted hours 4,000 Standard hours for actual production 4,400 Maximum possible hours in the budget period 4,800 Actual hours 3,800 The activity ratio of the company during the month is

1. A Option A: 111%
2. B Option B: 120%
3. C Option C: 95%
4. D Option D: 117%

The total cost incurred in the operation of a business undertaking other than the cost of manufacturing and production is known as?

1. A Option A: Direct cost
2. B Option B: Variable cost
3. C Option C: Commercial cost
4. D Option D: Conversion cost