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1) Listed Enterprises need to prepare Cash Flow Statement only under indirect method. a. True b. False
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2) In the case of financial enterprises, the cash flow resulting from interest and dividend received and interest paid should be classified as cash flow from a. Operating activities b. Financing activities c. Investing activities d. None of the above
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3) Which of the following are advantages of marginal costing? a. Makes the process of cost accounting more simple b. Helps in proper valuation of closing stock c. Useful for standard and budgetary control d. All of the above
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4) Managers utilizes marginal costing for a. Make or buy decision b. Utilization of additional capacity c. Determination of dumping price d. All of the above
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5) The problems associated with marginal costing are a. Difficulties in divisions of costs b. Problem of valuation of stocks c. Ignores time elements d. All of the above
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6) Under some special circumstances, price may be fixed at below cost too. a. True b. False
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7) During trade recession, the goods are sold at a. Depression price b. Normal price c. Minimum price d. None of the above
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8) In certain decision areas like plant closure and change in capacity, ________is more useful. a. Differential costing b. Marginal costing c. Absorption costing d. None of the above
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9) The profit at the level of existing sales is computed as a. Sales - (Fixed cost + Variable cost) b. Sales + (Fixed cost + Variable cost) c. Sales - Variable cost d. Sales - Fixed cost
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10) Profit at any level of sales in amount is measured as a. Sales * P/V ratio – Variable cost b. Sales * P/V ratio + Fixed cost c. Sales * P/V ratio – Fixed cost d. Sales * P/V ratio + Variable cost
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11) Profit at any level of sales in units is measured as a. Sales (units) * Cost per unit - Fixed cost b. Sales (units) * Cost per unit + Fixed cost c. Sales (units) * Cost per unit d. None of the above
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12) What will be the amount of profit if Fixed cost is Rs 20,000 Sales is Rs 1,60,000 and P/V ratio is 25%? a. Rs 40,000 b. Rs 20,000 c. Rs 10,000 d. None of the above
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13) Determine amount of profit if Variable costs is Rs 1,20,000 Fixed costs is Rs 40,000 and sales is Rs 2,00,000. a. Rs 30,000 b. Rs 50,000 c. Rs 12,000 d. Rs 40,000
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14) The labour engaged in the making of a product is known as _______ a. Direct labour b. Indirect labour c. Temporary labour d. None of the above
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15) Which of the following statements are true about standard labour time? a. Standard labour time indicates the time in hours needed for a specified process b. It is standardized on the basis of past experience with no adjustments made for time and motion study c. In fixing standard time due allowance should not be given to fatigue and tool setting d. The Production manager does not provide any input in setting the labour time standards
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16) If labour time is based on the maximum efficiency, the unit cost will be a. Higher b. Lower c. Equal d. None of the above
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17) A budgeting process which demands each manager to justify his entire budget in detail from beginning is a. Functional budget b. Master budget c. Zero base budgeting d. None of the above
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18) The scare factors is also known as a. Key factor b. Abnormal factor c. Linking factor d. None of the above
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19) Capacity ratio * Efficiency ratio = Activity ratio. a. True b. False
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20) A budgeted balance sheet is prepared in Projected Balance sheet method and an estimate is made of the values of all assets including bank overdraft, cash balance and bank. a. True b. False
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21) Which of the following statements are not true about Projected Balance Sheet Method? a. It is good for long-term b. It is appropriate for annual cash forecast c. It is of extreme use for planning and control d. None of the above
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22) XYZ factory working for 50 hours per week employs hundred workers on a job work. The standard output is 200 units per gang hour and standard rate is Rs 1 per hour. During a week in June, five employees were paid @ Rs 1.20 per hour and ten employees were paid @ 80 paise per hour. Rest of the employees were paid @ standard hour rate. The actual number of units produced was 10,200. Determine labour cost variance a. Rs 100 favorable b. Rs 150 unfavorable c. Rs 150 favorable d. Rs 100 unfavorable
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23) Given standard cost specifications time 5 hours per unit and cost Rs 5 per labour. Actual performance in cost period is production hours 10,400 and idle time 400 hours. Payment done is average per hour Rs 5.20 for 10,800 hours. Determine labour rate variance and labour efficiency variance, respectively. a. Rs 2,160 and Rs 2,000 both unfavorable b. Rs 2,160 and Rs 2,000 both favorable c. Rs 2,000 and Rs 2,160 both unfavorable d. Rs 2,000 and Rs 2,160 both favorable
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24) Which variance is also known as Gang composition variance? a. Labour mix variance b. Labour cost variance c. Labour efficiency variance d. None of the above
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25) Which of the following statements are true about responsibility accounting? a. Responsibility accounting results in inter-departmental conflicts b. In responsibility center more focus is paid on products, processes or jobs c. No focus is paid on controlling costs d. None of the above
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26) Control reports come in the category of routine reports. a. True b. False
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27) The coverage of control reports is wider than that of information reports. a. True b. False
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28) Management accounting highlights staff relationship with top management as well as other personnel. a. True b. False
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29) Which of the following statements are true?
A) Financial statements are only interim report. B) Financial statements are also known as annual records. C) Financial statements are historic. a. Both A and B b. Both A and C c. Both B and C d. A, B, C
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30) Certain assumptions are essential to prepare financial statements. a. True b. False
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