Management Accounting Consolidated

Management Accounting
List of Attempted Questions and Answers
Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Select The Blank Question Correct Answer Match The Following Question Dismissal of employee Increased spoilage and defectives Relationship between supervisor and worker Transport facilities to employees Multiple Choice Single Answer Question Correct Answer
Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer
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Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer
True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer
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Question Correct Answer Match The Following Question Accounting Audit Journal Ledger Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer
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Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank
Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Match The Following Question Accounting Balance-sheet Book-Keeping Financial statement Profitability statement Match The Following Question Bad debts
Bills Payable Bills Receivable Cash Discount Trade Discount True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer
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Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer True/False Question
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Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Match The Following Question Carrying cost E.O.Q Inventory control Ordering cost Total cost Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer
Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Match The Following Question Assets Drawing Journal Ledger Liabilities Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False
Question Correct Answer Multiple Choice Multiple Answer
Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Match The Following Question Advantageously applicable in similar industries Avoids cut throat competition Spirit of mutual trust Treatment given to research and development costs Multiple Choice Single Answer Question Correct Answer
Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer
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Select The Blank Question Correct Answer Match The Following Question Budget Budget committee Cash budget Purchase budget Multiple Choice Single Answer
Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Match The Following Question Cost Centre Cost Control Differential Cost Sunk Cost Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer
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In tangible assets Nominal A/C Personal A/C Real A/C Tangible assets Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer True/False Question
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Correct Answer Multiple Choice Multiple Answer Question Correct Answer Match The Following Question Daily Time sheets Hand Written method Time Recording Clock Method Token or Disc Method Weekly Time sheets Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer
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Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Match The Following Question Advance Application Drawing Outstanding Prepaid Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False
Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Match The Following Question Depreciation Discount allowed Discount received Interest on capital Outstanding expenses True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Correct Answer True/False Question Correct Answer True/False Question
Correct Answer Select The Blank Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Match The Following Question
Abnormal overheads Administration overheads Fixed overheads Indirect Material Select The Blank Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer
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Correct Answer Match The Following Question Decrease in selling price will lead to Decrease in variable cost will lead to Increase in contribution will lead to Increase in fixed cost will lead to Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Select The Blank Question Correct Answer Match The Following Question Compensating Error Error of commission Error of Omission Error of Principle Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question
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Correct Answer True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer
Match The Following Question Deferred revenue expenditure Deferred revenue expenditure written off Drawings Loan Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer
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Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer
Question Correct Answer Match The Following Question Contribution - Fixed cost Fixed cost + Variable cost Total cost - Fixed cost Total cost + Profit Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Select The Blank Question
Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer
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Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank
Question Correct Answer Match The Following Question Cash Discount Real A/C Rs.1 Personal A/C Trade Discount Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer
Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question
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Question Correct Answer Select The Blank Question Correct Answer Match The Following Question Daily Time sheets Time booking department Time Keeping Department Time Recording Clock Method Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Select The Blank Question Correct Answer
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Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer
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Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer
Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Match The Following Question Administration budget Cash budget Materials budget Selling and distribution budget Multiple Choice Single Answer
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Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Match The Following Question Balance Sheet Manufacturing account Profit and loss account Trading account True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question
Correct Answer True/False Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer
Question Correct Answer Match The Following Question Factory overheads Non operating income Selling and distribution overheads Total cost Multiple Choice Single Answer
Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer
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True/False Question Correct Answer Match The Following Question Labour hour method of absorption of overheads Percentage of direct labour cost methods of absorption of overheads Percentage of direct material cost methods of absorption of overheads Percentage of prime cost methods of absorption of overheads Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer
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Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Match The Following Question Dividend paid Freight inwards Freight outwards Sales Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer
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Match The Following Question Factory Cost Non-operating Expense Non-operating Income Selling & Distribution Total Cost Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer
Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Match The Following Question Danger level Fixation of inventory level Maximum level Minimum level Re-order level Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer Select The Blank Question Correct Answer Correct Answer True/False Question Correct Answer
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Multiple Choice Single Answer Question Correct Answer Match The Following Question Diemer system Differential Time rate Payment by Result Straight Piece rate system Time rate System Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Match The Following Question contribution fixed cost Fixed cost + variable cost sales- variable cost Total cost fixed cost Total cost + profit Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question
Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question
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Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Match The Following Question Compensating Error Difference in trial balance Error of commission Error of Omission Error of Principle True/False Question Correct Answer Match The Following Question Controllable Cost Differential Cost Opportunity Cost Sunk Cost Uncontrollable Cost True/False Question Correct Answer Multiple Choice Single Answer
Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer
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Match The Following Question Compensating Error Error of Principle Error of Omission Error of commission Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer
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Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer
Question Correct Answer Match The Following Question Purchase budget Budget committee Cash budget Budget True/False Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question
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Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Match The Following Question Advantageously applicable in similar industries Avoids cut throat competition Spirit of mutual trust Treatment given to research and development costs Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Match The Following Question Deferred revenue expenditure Deferred revenue expenditure written off Drawings Loan
True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer
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Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Match The Following
Question Dividend paid Freight inwards Freight outwards Sales Select The Blank Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Multiple Answer Question
Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer
Question Correct Answer True/False Question Correct Answer Match The Following Question Non-Operating income Operating income Plan for surplus/shortage of cash Plan of investment in fixed assets Multiple Choice Multiple Answer Question Correct Answer Select The Blank Question Correct Answer Select The Blank Question Correct Answer True/False Question Correct Answer
Multiple Choice Single Answer Question Correct Answer Multiple Choice Single Answer Question Correct Answer True/False Question Correct Answer Multiple Choice Multiple Answer Question Correct Answer Multiple Choice Single Answer
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The components of the selling and distribution cost budget are : Distribution expenses , Publicity expenditure , Salary of sales-office workers In India, where public undertakings operate along with the private sector undertakings, ________ enables a comparative assessment to be made of the two sectors. uniform costing Re-order quantity may be measured as : Maximum stock level - re-order level + (minimum usage X minimum re-order period) Features of money measurement concept are . . . 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 The various areas in which uniform costing can be adopted are . . Valuation of inventories , Charging of depreciation , Apportionment of overheads Accounting is an art of recording, classifying & summarizing in a significant manner. True The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions. Control Correct Answer Unavoidable cause of labour turnover Replacement cost of labour turnover Avoidable cause of labour turnover Preventive cost of labour turnover Which of the following is a valid classification of the salary paid to the foreman in charge of the packing department? Direct product cost
Special aspects of co-partnership include: Workers are granted ownership rights , Indirect monetary remuneration , The morale of the workers is increased The handloom industry will have ________ fixed cost and high variable cost. Low The sales forecast (quantity) should be compared with the ________ to find out whether it is possible for the firm to handle this level of sales. Production capacity Pre-requisites of Uniform Costing are . . . Spirit of mutual trust , Free Exchange of ideas , No rivalry Causes for adverse material price variance are: Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre piece. The cost of sales is composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, you are required to determine the future selling price, if the present rate of gross profit is to be maintained. Rs.452/The main object of establishing the maximum stock level for material is : To ensure that inventory never exceeds this limit ________ authorises the production department to issue requistion for materials. Bill of material An adjustment relating to outstanding expenses will ________ the net profit. Decrease XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a.on 1st October, 2003. Interest is to be paid on half yearly basis. What treatment should be given in the books of accounts of XYZ & Co. as on 31st March, 2004? Interest account should be debited with Rs.7,520.55 and outstanding interest account should be credited with Rs.7,520.55
Bank reconciliation statement is a systematic presentation of errors made by the accountant. False Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. True The pass book showed a credit balance of Rs.1,000/-. This balance was after considering the dividend of Rs.25/- collected by bank and Rs.5/- charged as collection expenses: these enteries are not made in the bank book. Find the balance as per bank book. Rs.1,020/Compute fixed overheads calendar variance when fixed overhead volume variance is Rs.250/- (Favourable); fixed overheads efficiency variance is Rs.2,150/- (Adverse) and fixed overheads capacity variance is Rs.800/(Favourable). Rs.1,600/- (Favourable) Correct Answer Process of analyzing & interpretation Reviewing internal control system Book of original entry Maintain all types of accounts Token or disc method is a related to the system of ________. Time-keeping The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged as depreciation. Calculate the rate of depreciation. 0.17 Crane expenses should be apportioned on the basis of ________. Number of hours crane worked in the department 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? Rs.26,545.45
You are using petrol as one of the raw materials. Daily you purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of petrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 litres and job Z 320 litres. After these issues the drum was empty. Calculate per litre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/Depreciation is caused by use factor, obsolescence and ________. Time factor A good purchase system, for materials, prevents production hold-ups due to: Lack of material Linking overhead to a cost unit is known as overhead absorption. True Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries. False Uniform costing system is defined as a system using common concepts and standard accounting practices by different entities in different industry to facilitate inter-firm comparison. True Features of real account are . . . Mainly deals with items which are having physical , Consists of some intangible assets , examples include - Lane, Building, Vehicles A business is an activity carried out with the intention of earning the profit. True Select the correct statements. Ram's account.Dr. Rs.10,000 To Bank account Rs.10,000 Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is made by cheque Identify the causes due to which the cost of labour may be high: Excess staffing , Lack of experienced and efficient personnel , High labour turnover
________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. Ledger The store-keeper should initiate action for the purchase of a material, when it reaches its : Re-order level Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages. True Maintenance Department is a service cost centre. True Balance sheet indicates the financial status of the business at given period. True Profit = Contribution per unit X ________. Margin of safety (units) Identify the items which are correctly classified. Carriage inward - Factory overheads , Carriage outward - Selling and distribution overheads , Sales research expenses -Selling and distribution overheads Fixed overhead variances may be calculated either on the basis of units of output or on the basis of standard hours. True Profitability statement indicates the amount of assets & liabilities. False Correct Answer Process of analyzing & interpretation Financial status Books of Accounts Profitability statement & Balance-sheet Indicates the amount of profit earned Correct Answer Amount not received from customer
Amount payable to supplier Amount received from the customer Accounted for in the books of Accounts Not accounted for in the books of Accounts Real Accounts may also consist the accounts of some intangible assets like Goodwill Account True The rate at which the depreciation is to be calculated are also specified in the Income Tax Act 1961. True Cash and---------------are the two systems of accounting. Mercantile P/L A/C debit side includes salary , discount allowed , postage & telegram Trading a/c credit side includes sales , goods lost by fire , closing stock Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on credit basis & allowed 10% discount on on the spot transaction. Cash Account debited to Rs. _____________ 45000 A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs 500 Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs 540 A bill of Rs. 500 for old furniture sold to Raj, was entered in the sales day book False Abnormal cost indicates that cost which is normally incurred at a certain level of output under normal circumstances. False
This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Differential cost Indirect material cost assist the manufacturing process is an integral part of finish goods. False The prime cost is Rs. 10,00,000 the factory cost is Rs. 13,00,000, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost? 37,86,000 Indirect Expenses includes Rent , Telephone expenses , Insurance Material cost is the first and probably the most important element of cost. True Under stocking may have following consequences Payment for idle time to workers , Production hold ups resulting into disturbed delivery schedule , Eleventh hour purchase Goods received note or goods received report is prepared in following copies One copy to Purchase department , One copy to Accounts department , One copy to Costing department Valuation of material uses the following methods FIFO and LIFO , Average price method , Market price Under Merrick Differential Piece rate System of wage payment up to 83% of efficiency following rate is offered. Normal Under the Emersons Efficiency Bonus System at following efficiency level no bonus is payable. Below 66.66% If the organisation follows the policy of considering predetermined overhead absorption rates, it may face the problem of under or over absorption of overheads if the actual overheads to be absorbed o True
Fixed cost is the cost that varies in direct proportion with the level of activity or volume of operations. False Limitations of marginal costing are difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Budgetory Control deals with Establishment of budgets , Comparison of budgeted results with actuals , Computation of variance. The analysis of overhead variances is different and the most complex task. True Standard costing and Marginal Costing are the best possible tools available to the management for cost control False Current standards includes Expected standards , Normal standards , Ideal standards In case of industries where capital investment is very high, budget should be prepared for a Longer period Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement historical legal After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier ordered variation Labour Turnover indicates ________ in labour force showing a highly increasing trend or highly ________ trend change decreasing
Under Gannt Task bonus system where the output is ________ payment is made as per minimum time rate, output is ________ payment is made as per time wages plus some increase in wage rates below standard at standard ________ and ________ are non monetary incentives Safety services education facility Semi ________ overheads are neither ________ nor variable in nature. fixed variable Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management uncontrollable lower variable cost is the cost that tend to ________ in direct proportion with ________ vary level of activity ________ and ________ are examples of semi- variable overheads. Maintenance cost electricity Rs.5000 paid as ________ to ________ should be debited to salary account Mahesh salary Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads actual estimated ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Like office rent, Audit fees
________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting . Talling arithmetical While calculating the minimum level, normal lead time is not necessary False To Increase the existing production capacity, additional capital expenditure is required. True Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i Remuneration During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Rs. 83.60 Office & Administration overhead includes Salary , Rent & Taxes , Stationary & postage Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500. Rs.4500/- ( Favorable ) Cost-sheet may be prepared separately for each Different Cost Centre The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000,estimated life 10 yrs. Calculate the depreciation according to straight line method 10000 To ascertain the ________ of all the transactions recorded in the ledger account, the account is required to be ________ Net effect Balanced In fixed overhead variance, the volume variance is further analyzed as
Variance Efficiency Variance , Capacity Variance , Calendar Variance For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased 3,15,000 Accounts is a Record of all transaction Whatever is to be sold need not be produced. True Patents and Trade Marks Account is a Real Account. True Budget is prepared in terms of Quantity and/or Money Favorable variances need on investigation False Standard Costing may not be useful in Small concerns , Industries having non-standardized products , Contract jobs __________ Accounting becomes a source of information for Management Accounting. Financial The levels indicated on the Bin card enables the ________ department to keep a watch on the balance and replace the material as soon as it reached at ________ level. Stores Re-order level Standard costs are the targets to be attained by the actual performance. Minimum During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Rs. 75
Management Accounting aims at enabling the management to take the decisions about the future. It may consider future data as well as non-financial factors. True Limitations of Management Accounting includes------------------Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Business Entity Concept ______________. Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Double Entry Accounting System__________________ Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Sundry creditors transfer to asset side. False Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is _______ 750 The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 deducted as depreciation. Calculate the percentage 0.17 Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ 15000 A bank reconciliation statement is prepared on a particular date. True When bank balance as per bank book is considered then following to be added. cheques issued but not presented , direct deposit by customer , wrong credits given by bank As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. False Credit sale of Rs. 5000 to Bobby should be entered in the purchase book.
False This cost indicates historical cost which is incurred in past. Sunk cost Manufacturing process involves study of Designing the product , The quantity and quality , Material used LAST IN FIRST OUT (LIFO) The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot The Bin card and stores ledges do not match due to the following reasons: Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card Flux method is important method of wage payment. False If production overheads to be absorbed are Rs. 50000/- and labour hours worked are 100000 then the labour hour rate will be, Re. 0.50 per labour hour. Fixed cost tends to vary with time rather than with level of activity. True Flexible budget is an effective tool for evaluation of performance. True Material Mix Variance occurs where only one raw material is required False Calculate Efficiency Variance, If actual production is 22,000 units, Standard production in actual hours is 21,000 units and Standard rate per unit is Rs.1.5/. Rs.1,500/-( Favorable ) Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units. Rs.200/- ( Favorable ) Standard may not be necessarily useful for this purpose. Forecasting
In Cash budget , Non operating cash inflow includes Receipt of loan/borrowings , Issue of shares , Sale of fixed assets In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads Loan instalments , Taxes , Purchase of fixed assets. During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales 20,000 kg Correct Answer Cost of holding the inventory Economic Ordering Quantity Maintain the inventory of any kind Associated with administrative efforts Ordering cost + carrying cost Generally accounts of the assets will have ________ balance and liabilities will have ________ balance debits credits Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book debited credited While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers purchase quotation Administration overheads are ________ in nature and can be controlled mainly at ________ level of the management fixed top Planning lays down the course of action to be taken in future. In case budgetary control, it is in the form of the ________ and in case of ________ costing, it is in the form of the standard cost budgets
standard Fixed cost is the cost that tend to remain ________ irrespective of ________ constant level of activity The process of Allocation & apportionment can followed to decide the ________ of overheads to each budget center Allocation & apportionment Loading The ideal standards are generally ________ in nature and the variances always shows ________ trends theoretical unfavorable Bin card is maintained by ________ department whereas ________ is maintained by costing department. Stores Store ledger Advance received from customers is ________ for the organisation. A liability The features of multiplicity of key factors are as follows : More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique Correct Answer All the properties owned by the business Withdrawn for personal use Book of original entry Maintain all types of Accounts All the amount owed by the business The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Depreciation Identify the budgets for which the production manager sould be held responsible : Production budget , Production overheads budget , Plant utilisation budget
Financial statements are basically in two forms i.e. profitability statement and balance sheet. True The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total cost Rs.105,000/-; working capital is equal to 25% of the sales value. The company expects 25% return on capital employed. Capital employed is equal to fixed assets plus working capital. Select the correct answers: Sales Rs.128,000/- , Return on capital employed , Working capital Rs.32,000/Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Differential cost If the owner brings in personal calculator for office use, ________ account should be credited. Capital The process of accounting split into three steams i.e. financial, cost, management accounting. True Financial Accounting discloses the financial performance & financial statements of the business as a whole. True Variable cost + Profit = Sales False P&L statement which is a period statement & relates to a certain period tells about results of operations. True Correct Answer Scope of uniform costing Advantage of uniform costing Requisite for uniform costing Fields covered by uniform costing A firm employs ten workers at an hourly rate of Rs.20/-. They worked for 40 hours each and completed the job for which standard time was 48 hours for each worker. Calculate labour cost for the job under the Rowan Plan. Rs.9,333.33
Features of material usage variance are : Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity Treating capital receipt as revenue income is an example of errors of commission. False Two competing companies Hero Ltd. and Zero Ltd. sell the same type of product in the market. Their forecasted profit and loss accounts for the year ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variable cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Variable cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Hero Ltd. Features of Sunk cost are . . . Indicates historical cost , Not relevant in decision making process , Incurred in past For a manufacturing company, dividend received is a non-operating income. True Features of purchase requisition slip are : Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded Judge the sentence in italics according to criteria given below : " It is difficult to adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production will vary according to the method used." The assertion and the reason are both correct Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting. Management Features of convention of consistency are . . . The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis
Uniform costing is not a separate method of ________. cost accounting Suspense account is closed automatically after rectification of all the errors. True Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. False Generally all the liabilities will have ________balance. Credit If overhead absorbed i.e. overheads charged to units during the period is more than the overhead incurred, it is said that the overheads are ________. Over-absorbed Balance sheet indicates the expenditure & income from the business. False Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find the interest expenditure on 31st March, 2004. Rs.500/Following are the examples of service cost centre Stores department , Transport department , Accounting department The sum of indirect material cost, indirect labour cost and indirect expenses is termed as Overheads. True Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc. True 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. False Copy of a firm's account in the bank's ledger is known as ________. Bank statement
The column which refers to the page number of the ledger is known as ________. Ledger folio Management Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting and cost accounting True The direct material useage budget and direct material purchase budget differ because of which of the following: A planned change in the level of material stock Loss is equal to fixed cost minus ________ Contribution The different purposes served by standard costing technique are : Cost control , Cost awareness , Performance appraisal Error of commission refer to a situation where a transaction is not recorded in the books of account. False A materials requisition form normally contains the following aspects: Quantity requisitioned , Per unit material cost , Job number If a predetermined overhead rate is not employed an the volume of production is increased over the level planned, the cost per unit would be expected to : Decrease for fixed costs and remain unchanged for variable costs The variance which measures the difference between what is paid for a given quantity of materials and what should have been paid for, is known as ________ variance. Direct material cost It is said that adoption of uniform costing creates customer confidence because . . . Prices are reliable Deferred revenue expenditure written off account is a real account. False In practical circumstances, the ________ are referred to as application of funds. Assets
Balance sheet is considered to be a part of the financial statements. True The cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________. short run The following figures relate to a company manufacturing a varied range of products : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stability in prices, calculate the profit volume ratio 0.3 Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work without an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours. Rs.29.98 While preparing sales budget the following factors must be considered : The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales Techniques of management accounting include: Marginal costing , Budgetary control , Standard costing Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system. Capital investment , Plant size , Location The expenses relating to maintenance and creation of demand for the product should be included in the ________budget Selling expenses Management Accounting is Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Malik started business by contributing cash Rs.50,000/- and his personal car worth Rs.25,000/-; thus his capital account should be credited with Rs.75,000/.
True Flood occurred on 18th March, 2004 and goods worth Rs.28,000/- were destroyed. The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claim amount was received on 2nd April, 2004. Find the impact of this transaction on net profit for the year ending 31st March, 2004. The net profit will decrease by Rs.18,000/The selection of the supplier may depend upon the following aspects: Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier The labour cost which can be identified with the individual cost centre is known as the Direct Labour Cost. True If the firm is operating with zero margin of safety, decline of even a single unit in sales will result in ________. Loss When bank balance as per bank book is considered for preparing bank reconciliation statement, then following items need to be added : Cheques issued but not presented , Direct deposit made by customer , Wrong credits given by bank If you are required to enforce uniform costing system in your industry, how would you proceed ? Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________. Overhead Under time rate system a worker is paid on the basis of production achieved by him in a given time. False Labour efficiency variance Rs.1,000/- (favourable); labour mix variance Rs.260/- (adverse) and labour rate variance Rs.300/- (adverse). Compute labour cost variance and labour yield variance. Labour cost variance -Rs.700/- (Favourable) , Labour yield variance Rs.1,260/- , Labour yield variance is favourable
If the standard contribution is less than the actual contribution, then ________ variance arises. Favourable Correct Answer Objective is performance evaluation Analyses the performance of different budget centres Assists in predicting shortage of cash Forecast of quantity and value of materials As a part of the data presented in support of a proposal to icnrease the production of clock radios, the sales manager of Wittman Electronics reproted the total additional cost required for the proposed increased production level. The increase in total cost is known as : Incremental cost Benefits available from revenue expenditure are received in the : Same year The variable costs are controllable at the lower lever. True Correct Answer Facilitate the fixation of responsibility Process of controlling costs of operations Increase or Decrease in cost Historical Cost Financial Accounting is Designed to supply information to internal/ external users , Referred as 'Historical' form of accounting , Concerned with financial factors If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can be stated as ________ sq.ft. tiles. 300000 The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system. Uniform costing
The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considering the adjustments) is Rs.78,560/-. Select the adjustments which might brought this change. Accrued commission income of-Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________. Bad debts Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision for discount from creditors is to made @ 5%. Find the impact of this provision on the net profit. The net profit will increase by Rs.761.25 Under the Rowan plan bonus is a fixed percentage. False Margin of safety indicates ________ of operations. Profitability XYZ Ltd. has sufficient idle capacity. It has received an enquiry for the supply of 300 units (packed in better box at an additional cost of Rs.20/- per box). The variable cost of manufacturing the product is Rs.150/-. The company expects a profit of Rs.6,000/- from this wholesale offer. What minimum price should it quote for this deal? Rs.190/Period cost is the cost assigned to the products. False In calculation of total sales margin variance, the ________cost of sales is deducted from the actual sales revenue. Standard The sales mix variance highlights the fact that the actual mix of sales has been in the same ratio as budgeted. False Correct Answer
Patents, Trade marks Debit all the expenses, Credit all the incomes Debit the receiver, Credit the giver Debit what comes in, Credit what goes out Building, Machinery Accounting period Concept________________ Longer life-span on business is divided into shorter segments , Each one being in the form of accounting period , Selection of accounting period may depend on various factors Depreciation Amount charged on Fixed Assets. Purchased computers of Rs. 50,000 come under the heading of fixed asset True Amount with drawn for personal purpose drawing A/C to be debited. True Profit & Loss A/C credit side has Gross profit , Commission received , Interested received When bank balance as per pass book is considered then following to be deducted. cheques issued but not presented , direct deposit by customer , wrong credits given by bank Rs. 2500 paid for the purchase of radio set for personal use of proprietor debited to general expenses account for rectifying the error, which A/C to be debited Drawing A/C Discount received from the Creditors has been entered in the Creditors A/C but discount amount has not been credited, for rectifying such error which account to be debited. Suspense A/C Total of purchase register for the month of March is taken 50,000 instead of 55,000. Posting to individual A/C of supplier total to correct amount is 55,000 but purchase account is debited by Rs. 50,0 True There is reverse relationship between the ordering cost and carrying cost
True Store ledger Record of all receipts and issue transactions , Financial expressions of all transactions , Maintenance of Store ledges provides a second check Following points are taking into consideration for evaluation of receipts The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty In EOQ, to express carrying cost as a percentage of the unit cost of purchases this is used in the formula----------i Under the differential time rate method of wage payment between 90% to 100% of efficiency following rate is offered. Rs. 1.40 per hour Where overheads chargeable to the department are Rs. 5000/- , direct labour hours worked are 24000 then labour hour rate is Re. 0.2083 labour hour. True The selection of the base on which overheads should be apportioned depend on the following principles. service or use basis , survey basis , ability to pay basis The Budget key factor may be in the form of sales, raw material, labour etc. True For a material, if standard quantity is 500 kg and standard price is Rs.6/- per kg. Find out the Material Cost variance if actual quantity is 400 kg and actual price is Rs.6/- per kg. Rs.600/-( favorable ) Find out Labour Efficiency Variance, if Standard Rate is Rs.1.50/- per hour, Standard hours are 12,000 and Actual hours are 12,600. Rs.900/- ( Adverse ) Calculate Labour Mix Variance, If revised standard hours are 16,500/-, Standard rate is Rs.3/- and Actual hours are 13, 500. Rs.9,000/- ( favourable ) Calendar Variance arises only if there is abnormal increase or decrease in
Actual number of working days The following factors affects the budgeted advertisement cost Percentage of profits , Availability of funds , Competitors policy Correct Answer Time spent by worker on job is recorded Attendance register Ticket number & clock card allotted to worker Token number & identification number allotted to worker Record of time for all the jobs during the week is made Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period cost revenues Management Accounting has a very ________ scope and it requires ________ organizational structure wide elaborate Along with financial accounting, ________ and ________ are the other streams of accounting Cost Accounting Management Accounting The cost accountancy is defined as the application of costing principles,methods and techniques to the ________, art and practice of ________ ascertainment of the profitability and the presenta science cost control Preventive costs of labour turnover refers to all the costs which may be incurred by the organisation to keep workers happy and ________ them from ________ the job discourage leaving Replacement costs of labour turnover are ________ and ________ training breakages of machine
Break even point is a situation of no ________ no ________ profit loss Uncontrollable variances are Strike , Change in customers demand , Devaluation of currency Indirect labour cost indicates that labour cost which cannot be identified with the individual cost centre. True There is no need to open a suspense account if the trial balance does not agree. False Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match reasons pass book Old furniture sold for Rs. 5400 has been entered as Rs 4500 in the cash book, for rectifying the same Suspense A/C credited to Rs 900 Material Price Variance may occur due to Change in price of material , Failure to take discounts , Weak purchase organization In financial statements P& L Accounts relates to a specific duration whereas ________ is for a given point of time P& L Accounts Balance sheet Goods return by Pande worth Rs. 2000 should have appeared on the credit side of Pandes account for rectifying the same. Following account to be credited Suspense A/C Bin Card is not an ________ record but only a ________ record. Accounting Quantitative
Salary given in trial balance Rs. 5000/-, still 2000/- is to be paid . The outstanding salary is debited to Profit &Loss A/C. The second effect is -Transfer to balance sheet liability side Debit the receiver & credit the giver is a rule of Real a/c. False If at 50% capacity, total factory overheads are Rs.10,000/- (out of which 60% are fixed and 40 % are variable) then what will the amount of total factory overheads at 60% capacity Rs.10,800/Correct Answer Not related in current year Increase in Assets Amount of personal use Amount still payable in current year Amount paid for next year These are the features of fixed overheads total cost remains the same , per unit cost may vary , not dependent on volume of output __________ Accounting is primarily protects the interest of the outsiders dealing with the organization various capacities like investors, suppliers, customers etc. Financial Head of the Department should sign the purchase requisition. True FIFO method The price of the earliest available lot is considered first , If the lot is exhausted, the price of the next available lot is considered , It is used for issue of material The situation of over absorption arises if the overheads absorbed are less than the actual overheads. False If production overheads to be absorbed are Rs. 20000/- and machine hours worked are 5000 then the machine hour rate will be, Re. 4 per machine hour.
Due to errors of principle the arithmetical accuracy of the trial balance get affected. False These are the methods of measuring labour turnover. Replacement Method , Separation Method , Flux Method From the following data, workout the EOQ annual demand. 5000 units, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory carrying cost15% on average inventory 300 Correct Answer Assets Debtors Suppliers Borrowed capital Liabilities canteen facility to workers, health and safety services are examples of monetary incentives. False This is the best example of element wise classification of cost. material This is the process of recording attendance time of the workers. Time keeping Wage rate standards takes into consideration the following factors The system of wage payments , System for bonus payment , Grades of workers required Standard Costing system facilitates ________ and ________ for each individual or department Delegation of authority Fixation of responsibility If actual cost is more than the standard cost then it is called favorable variance. False The aggregate of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost.
False Fixed cost is the cost that tend to remain ________ irrespective of ________ constant Cost Accounting restrict itself with historical transactions False A very wide scope of Management Accounting is the limitation by itself. True Journal is popularly known as 'Book of . . . Original Entry In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities. True Locate the steps involved in rectifying the errors in the books of accounts Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books The cost that indicates historical cost, which is incurred in past, is known as Sunk cost Presentation of information to enable managerial decision making' is one of the objects of which of the following Cost Accounting The objects of cost accountancy are . . To ascertain cost and profitability , Cost Control , Presentation of Information Examples of indirect material are Consumable stores , Glue used in book binding , Nails used in packing boxes The principle of ________ is followed while preparing the financial statements. Going concern The process of attributing proportions of items of costs amongst const centres is called ________. Cost apportionment Correct Answer
Normality wise classification Function wise classification Variability wise classification Element wise classification In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system. fertilizer New companies can adopt Uniform costing system as a ready-made system. True Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital is to be provided @ 10% p.a., what will be amount of capital of each of the partners as on 31st March, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account. Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account Non-trading income is disclosed on the credit side of ________ account. Profit and loss In the adjustment entry passed for closing stock, the ________ account should be credited. Trading Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register. Purchase An advertisement contract was made with an artist which stated that the remuneration will be 12% of net sales. On an average the monthly sales were Rs.36,000/-, however the average rate of sales return was 5% of that month's sale. Find the expenditure on account of advertisement. Rs.49,248/Goods kept in the godown were destroyed by fire on 18th June, 2004. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amont which should be debited to the profitability statement. Rs.18,950/-
Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business. False While preparing the bank reconciliation statement as on 31st March, 2004 you find the following discrepancy : 'a cheque of Rs.3,700/- received and deposited in bank on 27th March, 2004 was entered credited in the pass book on 3rd April, 2004.' In this background, which of the following statement holds true as on 31st March, 2004? Balance as per pass book < Balance as per bank book The stores department is a ________ department. Service The ________ is responsible for material losses while in storage. Store-keeper The ________ is a perpetual inventory record. Bin card A written request sent to a supplier for specified goods at an agreed upon price is often called as : Purchase order Selecting an appropriate method of valuation of inventory is important because : It influences the figure of gross profit Re-order level for materials is determined considering maximum consumption and maximum delivery period. True Control on purchase of material is exercised by the storekeeper. False The disadvantages of time rate system are : Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity The best way to reduce labour cost is to recruit cheap labour. False Under some circumstances, it may be advisable to sell at prices equal to or below the marginal cost ignoring fixed cost.
True Correct Answer Decrease in contribution Increase in profit volume ratio Increase in profits Increase in break even point Economical use of labour, materials and facilities can achieved with the help of ________. Budgetary control Select the advantages of standard cost system. Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency Which variance is used to analyse the effect of change in the quantity of output from a given mix of inputs? Materials yield variance Depreciation can be defined as a permanent, continuous and gradual reduction in the book value of a fixed asset. True Carriage charges paid for a new machine purchased if debited to carriage account would affect the ________ Machinery A/c and carriage A/c Correct Answer Wrong classification Wrong Posting Transaction is totally omitted Trial Balance does not get affected The difference between sales and cost of sales is termed as ________. Net Profit ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives. Management The objectives of cost accounting are :
Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making The capacity utilised to installed capacity ratio is 80% for the company. The capacity utilisation ratio in respect of a machine for a particular month is 90%. The available working hours in a month are 200 hours. The break of idle time is as follows : Waiting for job - 5hours, breakdown - 4 hours and waiting for tools - 3 hours. Calculate the idle time cost when the hourly fixed cost of running the machine is Rs.8/-. Rs.96/Semi variable expenses fluctuate in direct proportion to volume. False GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system. False From the following, select intangible assets: Goodwill , Patents , Trade Marks Items credited to Profit & Loss Account are Gross profit , Commission received , Interested received Judge the given statement according to the given criteria. Goods being real account, when goods are lost by fire, the goods account should be debited because the goods are not going out of the factory. The statement is correct but the reason is incorrect The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen? The liability side of the balance sheet will increase by Rs.2,000/It is said that the income statement represents wealth increase /decrease for the organisation. True All personal expenses of the owner should be debited to the organisation's profit and loss account. False Depreciation on assets is credited to the trading account. False
Correct Answer Real account Nominal account Proprietor's account Personal account If the bank pays off the credit card bill, as per the standing instructions, the overdraft as per bank book will be ________ the overdraft as per pass book. Lesser than A cheque of Rs.400/- received and deposited into bank on 26th September, was credited in the pass book but was omitted to be entered in the bank book: this error will result in : Difference in the balance as per bank book and as per pass book Inventory holding cost comprises of : Cost of insurance , Rent of store house , Salary of store keeper If the ordering cost ________s, then the economic order quantity will Increase. Increase P Ltd. produces a product having a monthly demand of 4,000 units. For every one unit of finished product one unit of a component X is required at purchase price of Rs.20/-. The ordering cost is Rs.120/- per order and the holding cost is 10% per annum. If the company places each order for 2,000 units due to financial constraints, what is the extra annual cost? Rs.80/An entry in the stores ledger is required for transfer of material from one job to another in the same department. False The causes of idle time can be analysed as Administrative causes , Productive causes , Economic causes The method which deals with ownership rights being given to workers is known as ________ method of remuneration. Co-partnership Which of the following is the most efficient use of the clock card? To facilitate payment for time spend on the work premises
A firm of boiler-house engineers provides engineering services to large number of factories having boiler houses. The firm charges on the basis of number of hours its engineers have worked for the client. Each engineer works for eight hours on each working day. Each engineer enjoys Saturday and Sunday as holiday. In addition he is granted a total of 21 more paid holidays in a year. An engineer's annual remuneration comprises (for the year Rs.182.29 Marginal costing is useful in the following areas : Plant shut down decisions , Make or buy decisions , Profit planning Cost volume profit analysis focuses attention on the ________ effect of a particular course of action. short run ABC Ltd. has a proposal of utilising a cheaper raw material which will increase the contribution from Rs.100/- per unit to Rs.125/- per unit. However, the use of cheaper raw material may result in decrease in sales by 10% (to 450 units only). Find the impact of using the cheaper raw material on the amount of contribution ( net increase or decrease in contribution). Increase in contribution Rs.6,250/Which of the following budgets may be termed as a long term budget? Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company A ________ can be defined as a part of the orgainsation for which separate budget can be prepared and implemented. Budget centre The finance manager is responsible for which of the following budget? Cash budget The role of the budget committee may be taken as an advisory role to the Chief Executive. True While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. False The variance which measures the deviation of the rate actually paid to labour as from the standard hourly rate is known as:
Labour rate variance The actual hours taken by the labour are compared with the standard hours allowed for output to find out the labour yield variance. True From the following data, determine the net profit if sales are 20% above the break even point. Selling price Rs.20/- per unit, variable cost Rs.15/- per unit and fixed overheads Rs.20,000/Rs.4,000/As on 30th September, 2004 the cost of closing stock was Rs.84,696/- and its market price as on the same day was Rs.66,584/-. Which value of closing stock should be considered in the final statement of accounts for the year ended on 30th September, 2004? Rs.66,584/Correct Answer Profit Total cost Variable cost Sales Marginal costing technique is useful in taking decisions relating to which of the following courses of action? Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision regarding temporary shutdowns Profit and loss account indicates the profit earned as on a particular date. False The balance of the suspense account will ________ after all the errors are become zero A' started business with cash Rs. 5,000/-, building Rs. 5,000/-, furniture Rs. 2,000/-. What is the total amount of capital? Rs. 12,000 The ideal budget period for a company engaged in generation and distribution of electricity is one year. False Income Tax Act, recognise only one method of depreciation namely ________.
Written down value method The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and variable costs are increased by 12.5%. Which of the following is the amended contribution to sales ratio? 0.333 The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________. uniform cost manual Select the items which may be classified as selling and distribution overheads. Delivery van expenses , Rent of finished goods warehouse , Sales research expenses The purchase account should be debited when an order is placed with the supplier of material. False Loss on account of goods lost due to earthquake should be debited to which account? Profit and loss account Factory overheads consist of all overhead costs incurred from the stage of procurement of material till the production of finished goods. True The use of contribution per unti of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following? Maximisation of short-term profit Identify the variable expenses. Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers Profit volume ratio is also known as ________. Contribution to sales ratio If the physical stock is less than the stock as per the stores ledger, such shortage should be treated as an issue of material. True
Which of the following is a correct definition of the key factor? The factor which limits the activites of the undertaking Marginal costing is a technique of cost control. True The process of recording the costs in a formal and systematic manner with the intention of preparing statistical data there from a ascertain the cost, is known as . . . Cost accounting A ________ inventory turnover period indicates efficient utilisation of material. Low Provision for discount on debtors account should be credited to the Profit and Loss Account. False Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one year from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium? Rs.3,750/The factors which influence the selection of the method for absorption of overheads are: Type of industry , Nature of products , Manufacturing process Select the transactions which can be entered in the Journal proper. Opening entries , Closing entries , Rectification entries The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc. True Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to be bad. What should be the amount of debtors that must be disclosed in the balance sheet? Rs.53,750/Dividend received on amount invested in shares is an example of ________. Non-operating income
________ variance represents the over or under utilisation of pland and machinery. Capacity Which of the following transactions should be excluded while preparing a cost sheet ? Interest on loan , Bad debts , Expenses on criminal law suit Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________. 90% to 100% Absorption costing is more suitable for decision making than marginal costing False Features of Taylor's differential piece rate system are as follows : Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. While preparing trial balance, the balance as per ________ book is considered as bank balance. Bank 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. The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission Select the steps to be followed while preparing bank reconciliation statement. Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying Bank charges debited in the pass book represent clerical mistake on the part of the bank employees. False A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of : Direct deposit into the bank
________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting Management Correct Answer Accounted for in the books of Accounts Debit what comes in, Credit what goes out Debit the receiver, Credit the giver Not accounted for in the books of Accounts The wages paid to a trainee who constructs wooden mould for concrete laying on a building contract should be defined as : Direct labour cost Depreciation, interest and property tax continue even when the operations are discontinued. True The objectives of Uniform costing system are as follows : 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 If it is given that the office expenses account includes Rs.10,000/- for purchase of computer-table, the net profit will ________, after the necessary adjustment is done. Increase The final result disclosed by trading account is the ________profit earned by the organization. Gross The half-yearly sales of product X are as follows : 1st half -30,000 units; 2nd half - 37,500 units. The production pattern of the company is based on 80% of the sales of the current six months and 20% of the budgeted sales of the next six months. Calcu 1st half -31,500 units; 2nd half - 30,000 units Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors. False Features of convention of materiality are . . .
transactions having material impact on profitability should be considered , Insignificant transactions will be ignored Unearned commission of Rs.5,000/- needs to be recorded in the books of accounts. Find its correct impact. The asset side of the balance sheet will increase by Rs.5,000/Overhead absorption is an exercise by which overhead is properly spread over production for the period. True Price based on Uniform Costing may be taken to be reliable and representative of the whole industry. True Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account. Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/Locate the error and its features in the following Compensating errors , Trial balance will not be affected , Trial balance will be affected The purchase budget is a forecast of the value of fixed assets requiring replacements in the budget period. False 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 Increase the selling price , Reduce cost of sales , Increase the selling efforts The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Accounting period The various contents of a uniform cost manual are organisation, cost accounting system and ________.
presentation of information In marginal costing, decisions are guided by profit rather than contribution margin. False The following data relates to the month of October : Actual variable overheads Rs.60,000/-; budgeted variable overheads Rs.80,000/-; actual output 900 units; budgeted output 1,000 units; standard time for one unit - 2 hours. Calculate variable overhead efficiency variance. Rs.4,000/- (Favourable) In order to rectify the totaling mistake, wherein the sales return ledger was undercast by Rs.2,000/-, the suspense account should be ________ with Rs.2,000/credited Correct Answer Time spent by worker on job is recorded Jobwise booking of time. Recording of workers time Ticket number & clock card allotted to worker 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. Sales margin volume Urgent action for replenishment of material stock must be taken once the inventory reaches its : Danger level The principal functions of the cost accounting department are : Classifying labour cost according to jobs, processes, etc. , Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced. Match True The treatment of ________ time in cost accounting depends upon the distinction between normal and abnormal time. Idle
Items debited to Profit & Loss Account are Salary , Discount allowed , Postage & telegram Budgeted profit and loss account and budgeted balance sheet are also known as ________. Master budget Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging to that industry ? Uniform costing A lathe machine was purhcased on 31st March, 2004 for Rs.65,000/-, however it was installed only on 5th April, 2004. The depreciation is charged @ 15% p.a.. Find the amount of depreciation charge for the said lathe machine for the year ended 31st March, 2004. Nil Differential cost analysis is incorporated in the cost books. False The process of recording attendance time of the workers is known as time booking. False The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account. False If the quantity of material purchased and quantity used are different, then which quantity should be used to compute the material price variance? Quantity of material purchased Uniform costing system can be successfully implemented in any industry only when : Information is freely supplied by all the units , Well organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct Factory light, telephone expenses are examples of ________ expenses. Indirect
For successful implementation of uniform costing system, it is very essential to devise ________, containing recommended cost accounting plan and procedures. cost manual The combination in which different products are sold by a company is known as ________. Sales mix Which of the following is usually prepared daily by employees for each job worked on? Job card Profit = Profit volume ratio X Margin of safety True The management of Horngreen Ltd. is deciding whether to continue working at loss or to temporarily shut down the factory. State the qualitative aspects that must be considered before arriving at a decision. Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory Indirect material cost is an integral part of finished goods. False It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because : The cost structure is different Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction? Maintenance of machine account Margin of safety = Contribution / Profit volume ratio False The key factor determines the : Level of activity , Capacity utilization , Level of sales Discount received from the creditor has been entered in the creditor's account but discount has not been credited; what type of error is this ________ Omission of posting an amount in the ledger
Which of the following operations would normally be carried out first when preparing a master budget? Determining the budget period Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ . Income Tax Act, 1961 Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg.Compute material yield variance. Rs.100/- (Favourable) Select the examples of functional budgets: Sales budget , Production budget , Research and development budget Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided @ 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period? Profit and loss account should be debited with Rs.1,866.67 KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Rs.100,000/Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable. True An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________ P's A/c and Q's A/c Select the items which may be classified as administration overheads. Depreciation on office furniture , Director's remuneration , Telephone expenses
Budgetary control system provides a basis for establishment of the incentive systems. True A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity. True A low margin of safety indicates ________ fixed overheads. higher Category A items, as per ABC analysis, represent ________ % of the total number of items in inventory. less than 10 The gross profit transferred from the trading account is Rs.98,999/-. The expenses debited to the profit and loss account are salary Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and managing director's incentive Rs.28,000/-. It was noted that no entry was made for salary of one month which was due but not yet paid. Find the net profit of the company. Rs.34,408.09 Credit balances in all the Personal & Real accounts appear on asset side. False A complete list of all material required, with quantities, for a particular job is given in the ________. Bill of material The term ________ indicates expenditure incurred on or attributable to a given thing. Cost The budget manual must contain statement regarding: Objectives of the orgainsation Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and advise sent thereafter, may lead to: Balance as per bank book > Balance as per pass book Entry for dishonour of cheque appears only in the pass book, this entry should be ________ in the bank book.
Passed Since the pass book and the bank book record the ________ transactions, the bank balance as per these books should be equal. Same A pre-determined factory overhead rate holds up product costing. False These are the replacement costs of labour turnover. Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives Rent of Rs.7,500/- for the month of April was received in March. Which account should be credited in the books of accounts for making an entry for receipt of the said amount? Rent received in advance account Bank reconciliation statement can be prepared on weekly basis. True Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account? Rs.45,000/Financial Accounting ______________ Designed to supply information for internal/ external uses. , Deals with the transaction during specific period. , It is compulsory Cost Accounting ______________. Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & present. Features of double entry accounting system are . . . Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Penalty paid for delay in payment to creditors represents uncontrollable cost. False Features of a cost sheet are as follows
Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the Depreciation charged on office furniture on straight line basis is an example of ________. Administration overheads Uniform Costing Methods may be advantageously applied to . . . Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. 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. The gross profit will increase by Rs.6,450/If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's personal contribution, ________ account should be debited in the books of accounts of the business. Drawings Included in the trial balance is the sales promotion suspense account with a debit balance of Rs.6,300/-. It is given that this balance should be written off. Calculate its impact on profit of the company. The net profit will decrease by Rs.6,300/While passing the journal entry, it is of utmost importance to ensure that the total of amount debited is equal to the total of the amount credited. True The bin card and stores ledger, being independent records, comparison of these two records should be avoided. False The cost of idle time incurred by employees that is considered normal for the production process should be charged to : Factory overheads The cost of abnormal time may be recovered by inflating the hourly labour rate. True
Contribution represents pool of resources available for meeting all costs other than ________. Variable costs ABC Ltd. is planning to sell 200,000 units of product B. The fixed costs are Rs.400,000/- and the variable costs are 60% of the selling price. In order to realize a profit of Rs.100,000/-, the selling price per unit would have to be : Rs.6.25 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: Re.0.98 In which of the following situations, the flexible budget should be preferred? Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Capital expenditure budget Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited. True Under the AB________ analysis, nuts and bolts used as material will be classified as category C. C Which of the following is a more descriptive term for the type of cost accounting often called "direct costing"? Variable costing The advantages of Halsey plan are : Bonus goes on increasing with increase in time saved. , Provides more incentive to speed up production , Guaranteed time rate payment is made Marginal costing is also known as ________. Variable costing Category C items, as per the ABC analysis, usually refers to indirect material.
True Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools? By providing depreciation to the extent of Rs.15,000/All costs are controllable. False Which of the following cost is also termed as Prime Cost ? Direct cost Purchase of national saving certificates by the company from its profits, should be debited to ________ account. Investments The difference between sales and prime cost is known as ________. Gross Profit The opening balance of cash account is Rs. 25,000/-, cash received from debtors Rs. 30,000/-, sold goods on cash basis amounting to Rs. 50,000/-, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the closing balance of the cash account? Rs. 80,000 Opening stock valued at Rs.7,400/-; Purchases Rs.24,700/-; Wages Rs.5,400/-; Sales Rs.48,600/-; Closing stock Rs.7,000/-. Calculate Gross Profit? Rs.18,100/Under-recovery of overheads implies that the profit will be________ to the extent of total under-recovered overheads. Increased Correct Answer Salary of CEO Interest on loan Carriage inwards Cost of demand creation
Quantify the increase in profit on account of following errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated @10% p.a. (b) Interest received on bank deposits was credited to dividend received account, Rs.1,550/- (c) A television purchased for the managing director's office for Rs.45,000/- was debited to Interior decoration expenses. Rs.43,200/Under ABC analysis, category A represents items with high volumes. False 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. The net profit will not be affected Which of the formulae can be used to calculate profit volume ratio : Change in contribution / Change in sales , 1 - (Change in variable cost / Change in sales) , (Fixed cost + Profit) / Sales Marginal costing rewards sales whereas absorption costing rewards production. True Following errors affect the trial balance Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger Sold goods to Amitabh worth Rs. 15,000/- against 15% trade discount. In this case with what amount should the sales account be credited? Rs. 12,750 Furniture account will always have a ________ balance. Debit Accounting is the art where transactions are Summarized , Classified , Recorded The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Total variable overhead Standard costs are used for external reporting.
False 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 ? Rs.300,000/The factors to be considered while preparing the direct materials budget are : Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes Correct Answer Land & Building Work in Progress Commission received Closing stock of finished goods Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet. True Find the budget which is inadequate as a cost control technique : Fixed budget Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices. True 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. Rs.3,00,000/________ is an example of intangible asset. Goodwill Goods sent to the customers on approval basis should be treated as sales. False Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand.
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. 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. True A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed. Budget The reporting method used in the costing system should be based on the principle of Management by exception 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: Service costs M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as Drawings Measurement of ________ gives an idea of the degree of mobility of labour. Labour turnover 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. Rs.8,279.63 Correct Answer Repair for factory building Profit on sale of investment Advertisement expenses Cost of finished goods
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 ? 0.1765 Contents of Uniform Cost Manual are Organization , Cost Accounting system , Presentation of information The process of accounting has three streams of accounting ---------------,-------and ----------------------. Financial Accounting , Cost Accounting , Management Accounting Long term loan borrowed from financial institution comes under the heading of long term liabilities. True 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, The statement and its reason are both incorrect The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations Management Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein. False Primary distribution is effected on the basis of service rendered to the service departments by the production departments. False Marginal costing is found to be unsuccessful in the following situations :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 Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein.
False Labour efficiency variance arises due to: Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material A person in charge of a ________ may be held responsible for its proper functioning and cost control. Cost centre The organization chart shows the following aspects : Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers Danger level for inventory of materials means the safety stock of inventory. False The main advantages of profit sharing are : Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost? 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 Management accounting is concerned with the following activities : Decision making , Safeguarding assets , Planning and controlling activities Select the accounts to be disclosed on the liability side of the Balance sheet. Loan , Outstanding expenses , Creditors Which document facilitates estimating material cost of a particular job, before completion of that job? Bill of material Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit. The net profit will not be affected Features of convention of conservation are :-
Applicable to valuation of current assets , Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realized Amortization of goodwill should be considered while preparing cash budget. False Generally, all real accounts will have a ________ balance. Debit Angle formed by the intersection of total cost line and sales line is called angle of ________. Incidence Labour turnover means :Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Essentials for effective implementation of budgetary control system are :Commitment of top management , Clearly defined objectives , Continuous budget education ________ authorizes the production department to issue requisition for materials. Bill of material A written order sent to inform the purchasing department of a need for materials is called a ________. Purchase requisition note Features of convention of materiality are :Transactions having material impact on profitability should be considered , Insignificant transactions will be ignored Actual costs determined on the basis of costing records maintained have following limitations :No practical utility from control point of view , No practical utility for price fixation , Expensive Select the accounts to be disclosed on the assets side of the Balance sheet :Furniture , Loan to Bank of U.S.A. , Land & building Management Accounting is :-
Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision for discount from creditors is to be made @ 5%. Find the impact of this provision on the net profit. The net profit will increase by Rs.761.25 Time rate system is suitable for workers of the maintenance department. True The overheads apportioned to three production departments A, B and C and two service departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are shared by A, B, C and Q in the ratio of 4 : 3 : 2 : 1 and that of department Q are shared by A, B, C and P in the ratio of 3 : 3 : 2 : 2. Ascertain the total overheads of each production department. A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/Credit balance in interest account indicates income for the organization. True All personal expenses of the owner should be debited to the organization's profit and loss account. False Basic objective of Uniform Costing is :Comparison The integrated form of all functional budgets is known as :Master budget The capital expenditure budget is important because it involves :Huge cash outflow If excess of cash is estimated in the cash budget, it may be possible to utilize it to give bonus to the employees. False Which of the following is most likely to be an allocated production overhead cost to the finishing cost centre? Salary of the finishing center's manager
In differential cost analysis, decisions are taken by comparing the incremental revenue with differential costs. True Correct Answer Not affected by output related remuneration schemes Useful when ratio of skilled and unskilled labour remains constant Useful when prices of materials are fairly stable Useful when there are no wide fluctuations in processing In considering a special order situation that will enable a company to make use of presently idle capacity, which of the following costs would be irrelevant? Depreciation The ________ is of immense help in guiding the companies to operate their accounts on uniform basis. Uniform cost manual As per the provisions of Section 209 of ________, all the company form of organization is legally required to follow the mercantile or accrual system of accounting. The Companies Act, 1956 The disadvantages of supplementary overhead rates are:It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity The system which combines the benefits of time rate and piece rate system by providing a minimum time rate payment along with incentives is known as ________ system. Gantt task bonus Currently Beta Ltd. is earning a contribution of Rs.80/- per unit and the variable cost is Rs.180/- per unit. Its fixed costs are Rs.200,000/-. Its existing sales are 5,000 units. The company has a proposal that the sales staff may be paid a commission of 10% of sales instead of fixed salaries totaling Rs.80,000/. This action is expected to increase the sales by 10%. Compute the amount of profit assuming the proposal is accepted? Rs.177,000/-
Dividend received on amount invested in shares is an example of ________. non-operating income Essentials for effective implementation of budgetary control system are Commitment of top management , Clearly defined objectives , Continous budget education Correct Answer Profit and loss appropriation account Manufacturing account Profit and loss account Trading account Large angle of incidence indicates ________ amount of profits. higher Relevant costs in decision making are : Those costs which will arise as a result of the proposed action ________is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time. Trial Balance Overhead capacity variance is the outcome of: Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated Basic objective of Uniform Costing is . . . comparison Re-order level should be higher than ________ but lesser than maximum stock level. Minimum level Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's Account. In order to rectify the mistake, which account should be debited ? ________ Suspense account Interest receivable is a________ for the organisation. Current sset
Interest on bank loan, was paid till the quarter ending 30th September, 2003, Rs.36,000/-. Find the amount to be debited to the profit and loss account for the year ending on 31st March, 2004, assuming the loan is not yet repaid as on this date. Rs.72,000/The features of the Halsey Plan are: The benefit of time saved is divided equally between the employer and employee The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. False Determine re-order level from the following : Maximum daily consumption 200 units; maximum delivery period - 12 days; average daily consumption 150 units and average delivery period - 8 days. 2,400 units An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe. suspense With the help of the given information, find actual fixed overheads for actual output. Fixed overheads volume variance -Rs.75,000/- (Favourable); fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance Rs.100,000/- (Adverse) and standard fixed overheads for actual output -Rs.575,000/-. Rs.600,000/Which of the following information is included in the goods received note? Date of receipt of material , Quantity received , Description of goods The operating profit as per cost statement may differ from the profit as per Profit and Loss Account due to existence of Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others Fixed deposit bearing interest @ 5.50%, for Rs.10,000/- was kept with Bank of India on 1st June, 2003, for a period of one year. The type of the fixed deposit is cumulative, i.e. interest shall be received only on maturity. What treatment should be given in the books of accounts on 31st March, 2004, the year ending date?
An entry for Rs.458.34, debiting interest accrued but not due account should be passed The advantages of written communication are Accuracy , Can be recorded , Brevity Business letters can be useful in different ways like Legal evidence , Permanent information , Recovering dues Essential parts of business letters would be Head address , Date , Outward number The Head address includes Tel no. , Name of organization The body of the letter may be divided into Opening Para , Main communication , Closing paragraph Examples of salutations would be Dear sir , Respected Sir The matter in the memorandum may include Procedures , Rules , Instructions People external to the organization do not have any access to the costing records. True Features of Financial Accounting includes----------------It is a legal requirement , It protects the interest of outsiders , It considers historical transactions A cheque received from a customer but not deposited into bank must be recorded in the cash book. True The periodical total of sales book was cash short by Rs. 5000 for rectifying the same, which A/C to be debited Suspense A/C Due to compensating errors the arithmetical accuracy of the trial balance get affected. False
Correct Answer Repair for factory building Dividend on shares Profit on sale of shares Advertisement Cost of finished goods Non Operating Expenses includes Loss on sale of asset , Goodwill , Only a, b Perpectual inventory system includes continuous verification of physical stock at regular intervals. True Under the differential time rate method of wage payment up to 80% of efficiency following rate is offered. Rs. 1.00 per hour Per unit cost of variable overheads may reduce as the volume of output increases but the total overheads remain constant. False Machine hour rate is calculated as (amount of overheads to be absorbed)/(labour hours required for production) False This is an example of semi variable overheads. electricity wise classification of overheads takes the form of indirect material , indirect labour , indirect expenses To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition. False Budget is prepared for a fixed period of time. True Depreciation does not involve cash out flow True
Basic three steps in Standard Costing are Setting standards , Comparing actuals with standards , Measurement of variance Calculate Labour Rate Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and actual hours are 13, 500. Rs.6750/- ( Adverse ) Following factors will have to be considered before preparing Production Budget in terms of quantity Production capacity , Co-ordination with Sales forecast , Management Policy Correct Answer Below minimum level Initiating proper action for movement of material The level above which actual stock should not exceed The level below which actual stock should not reduce To take the step for procurement of further lots of material If ________ is not provided, the asset may appear in the Balance Sheet at an ________ amount depreciation overstated Expenditure like general lighting are apportioned considering ________ as a base and expenditure like depreciation are apportioned considering ________ as a base. number of light points value of assets Under absorption of overheads may take place due to the reasons like ________ overheads being more than the ________ overheads actual estimated A key factor is defined as the factor which, at a particular point of time or over a period will ________ the volume of ________ limit output Overhead absorption rate will be different at different capacity levels. True
Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @25% of factory cost, then the amount of selling overheads should be Rs.________/83750 Creche expenses may be appropriately approtioned on the basis of ________. Number of female workers Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight inward Rs.35,000/-, closing stock Rs.2,00,000/-, direct wages Rs.2,35,000/-. Calculate the prime cost. Rs.10,50,000/Indirect Cost is termed as ________. Overhead A group of 10 men and 20 women workers were expected to produce 400 units of a product in an 8 hour day. The standard hourly rate was fixed at Rs.25/- and Rs.15/-, respectively.Actually, a group of 15 men and 10 women workers was deployed and paid for 8 hours a day at an hourly rate of Rs.22/and Rs.18/-, respectively. Two hours were wasted for the entire group due to power failure and only 300 units were produced. Calculate labour rate variance. Rs.120/- (Favourable) A grinding machine is an example of impersonal cost centre True Uniform costing system is useful in the following areas Classification of cost accounts Interim dividend paid by the company should be debited to the profit and loss appropriation account. True The production budget may be prepared in terms of : Units produced , Production cost , Material cost, labour cost and overheads 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: Variable costs
Receipts and payments method of cash budget is useful for preparing long term estimates. False In case of seasonal industry, the budget period may be taken as ________. One season Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product. True Due to compensating errors the arithmetical accuracy of the trial balance is affected. False Material price variance for a job is Rs.800/- (Favourable). Actual quantity of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate material cost variance. Rs.1,600/- (Favourable) The process of recording the business transactions in a defined set of records is referred to as ________. Balance sheet The ________ books are preferred when the volume of transactions is very large. Subsidiary Limitations of Management Accounting includes------------------Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Business Entity Concept ______________. Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Double Entry Accounting System__________________ Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ 15000
When bank balance as per bank book is considered then following to be added. cheques issued but not presented , direct deposit by customer , wrong credits given by bank Manufacturing process involves study of Designing the product , The quantity and quality , Material used LAST IN FIRST OUT (LIFO) The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot The Bin card and stores ledges do not match due to the following reasons: Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card The causes of idle time can be analysed as Administrative causes , Productive causes , economic causes Limitations of marginal costing are difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. In fixed overhead variance, the volume variance is further analyzed as Variance Efficiency Variance , Capacity Variance , Calendar Variance Standard may not be necessarily useful for this purpose. Forecasting In Cash budget , Non operating cash inflow includes Receipt of loan/borrowings , Issue of shares , Sale of fixed assets In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads Loan instalments , Taxes , Purchase of fixed assets. During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales 20,000 kg The features of multiplicity of key factors are as follows :
More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique Identify the budgets for which the production manager sould be held responsible : Production budget , Production overheads budget , Plant utilisation budget Features of material usage variance are : Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity Identify the causes due to which the cost of labour may be high: Excess staffing , Lack of experienced and efficient personnel , High labour turnover Two competing companies Hero Ltd. and Zero Ltd. sell the same type of product in the market. Their forecasted profit and loss accounts for the year ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variable cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Variable cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Hero Ltd. Features of Sunk cost are . . . Indicates historical cost , Not relevant in decision making process , Incurred in past Features of purchase requisition slip are : Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded Features of convention of consistency are . . . The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis Following are the examples of service cost centre Stores department , Transport department , Accounting department Pre-requisites of Uniform Costing are . . . Spirit of mutual trust , Free Exchange of ideas , No rivalry
You are using petrol as one of the raw materials. Daily you purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of petrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 litres and job Z 320 litres. After these issues the drum was empty. Calculate per litre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/Amortisation of goodwill should be considered while preparing cash budget. False The objects of cost accountancy are . . To ascertain cost and profitability , Cost Control , Presentation of Information Management Accounting is Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management The causes of idle time can be analysed as Administrative causes , Productive causes , Economic causes The components of the selling and distribution cost budget are : Distribution expenses , Publicity expenditure , Salary of sales-office workers Locate the error and its features in the following Compensating errors , Trial balance will not be affected , Trial balance will be affected Business Entity Concept Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Standard Costs are used as tool for Cost Control The danger level fixed below maximum level False Following example comes under service cost centre Store department , Internal Transport department , Accounting/Costing department
The material physically received is compared with material ordered as per the this order Purchase Order Correct Answer Halsey system & Gantt System Different hourly rates are fixed for different levels of efficiency Workers are paid according to the production achieved by him The rate of payment is fixed per piece Worker is paid on the basis of time attended by him When bank balance as per pass book is considered then following to be added. cheques deposited but not cleared , Interest debited by bank , bank charges debited by bank (No. of unit * Rate of depreciation per unit ) this formula is used for written down value method. False Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________. 12750 Cash and ____________ are the two systems of accounting. Mercantile This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Differential Cost Correct Answer profit Total cost contribution variable cost Sales Important advantages of Uniform Costing can be said to be It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units Margin of safety are the sales beyond
break even point Indirect Labour Cost Wages paid to storekeeper , Salary of works manager , Wages paid to gatekeeper The difference between sales and factory/ works cost is termed as ________ the difference between sales and ________ ermed as net profit gross profit cost of sales Labour cost is the cost of __________ paid to employees of the organization. Remuneration For a material, if standard quantity is 400 kg and standard price is Rs.3.75/per kg. Find out the Material Usage variance if actual quantity is 500 kg and actual price is Rs.3.60/- per kg. Rs.375/-( Adverse ) Labour Efficiency Standards are decided by considering following factors Records of past performance , Time & Motion Study , Trial Runs A budget manual is a document setting out the ________ of the persons and ________ required for the budget control. Responsibilities Forms and procedures Selling price per tonne is Rs. 69.50 , variable cost per tonne is Rs. 35.50 and fixed cost is Rs. 18,02000. Find out the BEP in units, 53000 The difference between standard cost and actual cost is termed as Variance. True Wage payment system should be properly tied up with quality control procedures to ensure that the workers are paid only for good and quality production. True In Cash budget Operating cash inflow includes Cash Sales , Collection from Debtors , Interest/Dividend received If the product is labour intensive, more stress may be necessary on inventory control procedure.
False A good wage payment system will not punish the workers for the matters beyond the control of the workers. True Fixed assets do not give the returns during the same period during which they are paid for True The material issued to production department may be returned back to the stores because material issued in excess requirement and Material issued is defective Following are called the element of Cost Material , Labour , Expenses ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting. Talling arithmetical Convention of Materiality __________________ Only those transactions will be considered which have material impact on profitability , Insignificant transaction will be ignored , The cost of non-used should not be considered as the item of cost Under the repeated distribution method the overheads of ________ department are distributed to other departments on agreed ________ service percentage Under time rate system a worker is paid on the basis of production achieved by him. False Cost Accountancy is a science, art and practice of a cost Accountant. Science indicates the possession and the application of relevant systematic knowledge. , Art indicates the skill and ability. , Practice indicates continuous effects on the part of cost accountant. Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities.
True Money Measurement Concept__________________ Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the kind of information available from financial statements , Due to several restrictions it becomes drawback of financial accounting P/L A/C debit side includes salary , discount allowed , postage & telegram Profit & Loss A/C credit side has Gross profit , Commission received , Interested received A started business with cash 5000, building 5000, furniture 2000, having depreciation of 10% on building. The total amount of capital comes to Rs. __________ 11500 Following errors do not affect the trial balance Error of Principle , Error of Omission , Error of Commission Correct Answer Wrong classification Transferred to suspense account Wrong Posting The transaction is totally omitted Trial Balance does not get affected A contractors bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account False Correct Answer Increase or Decrease in cost Historical Cost Cost can be controlled Cannot be controlled Return or yield Dividend received is a Non-operating Income. True
Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will be prime cost. 10,50,000 A Co. having factory cost of Rs. 13,10,800. The administrative overheads are salaries 40,000, rent & rates 6400, Traveling expenses 12,400, Depreciation 2400, Directors fees 24,000, General Charges 2 14,59,200 Factory overheads are termed as Production overheads , Works overheads , Manufacturing overheads Selling and distribution overheads includes Indirect Material such as packing material, samples etc., , Indirect labour like salaries to sales personnel manager , Indirect expenses like warehouse charges, advertisement The aims of perpetual inventory system are as follows Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock These are the preventive costs of labour turnover. cost of maintaining good relations with the workers , Cost of medical services , cost of welfare facilities These are the features of variable overheads vary directly in proportion to volume of output. , per unit cost remains the same , total overheads may increase or decrease as per volume of output. The cost that varies in direct proportion with the level of activity is called variable cost The ultimate incorporation of all functional budgets takes the form of budgeted Profit & Loss Account and Balance Sheet. True Calendar Variance arises only if there is abnormal increase or decrease in Actual number of working days If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the quantity of production 4,500 kg
Variable costs are the controllable costs at the ________ level of the management whereas fixed costs can be controlled only on the ________ level of the management Lower Top ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Like office rent Audit fees If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value. 0.75 Direct Cost includes Direct material , Direct labour , Direct expenses Which of the following costs is most likely to have a cost behaviour pattern described as ..a fixed cost upto an activity level of 1,000 units, with a variable cost there after which decreases from 10 paise to 8 paise per unit at 2,000 units? Wages payment which is fixed for a minimum output quantity after which a bonus per unit is paid which reduces when activity level exceeds 1,000 units In case of defective material being returned by the stores department to the vendor, such material should be valued at the________. Purchase Price Piece rate system is suitable when quality of goods produced is of extreme importance. False A firm earns profit when contribution is equal to fixed costs under variable costing. False Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'. The worker has actually completed the job in 6 hours, i.e.6 X 60 = 360 'Bs'. Time wage rate is Rs.20/- per hour. Bonus is shared between the worker and the foreman in the ratio of 3:1. Calculate total earning of the worker as per Bedeaux Point System. Rs.180/-
Contribution represents pool of resources available for meeting all costs other than ________. Variable Costs Locate the steps involved in rectifying the errors in the books of accounts Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weather, viz. icecream, sweaters, etc. The statement and the reason are both incorrect Overheads chargeable to a product, using direct labour cost basis, may be calculated by multiplying percentage of direct labour cost and ________. Direct labour cost of the product Causes for adverse material price variance are: Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges The objectives of Uniform costing system are as follows : 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 200 units of material were purchased from X @ Rs.5/- per unit and 300 units were purchased from Y @ Rs.6/- per unit. The organisation follows FIFO system of pricing of issues and the above purchases have been recorded in stores ledger. 120 units have already been issued. 60 units received from X are defective and are therefore returned. Find the value of the material returned to X. Rs.300/These are the methods of measuring labour turnover. Replacement Method , Separation Method , Flux Method According to the standard costing principles, only adverse variance must be further investigated. False Education facility to workers and their children, pension, superannuation fund are examples of ________ incentives. Non-monetary
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? Rs.300,000/Find the balance as per pass book. Bank Book - 10/10/04 - Paid rent Rs.10,000/-; 15/10/04 - Received cheque from debtor, Mr. X, for Rs.15,000/-; 20/10/04 - Issued cheque of Rs.25,000/- to Rahul Construction Co.; 25/10/04 Issued cheque for Rs.5,000/- to XYZ Ltd. and balance as on 01/10/04 Rs.55,000/-. Pass Book : 5/11/04 debited Rs.25,000/- being cheque of Rahul Construction Co.; 6/11/04 debited Rs.5,000/- being cheque of XYZ Ltd. and 9/12/04 credited Rs.15,000/- being cheque of Mr. X. Rs.70,000/The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________. Uniform cost manual From the following, select intangible assets:Goodwill , Patents , Trade Marks ________ is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time. Trial Balance Going concern concept is also known as :Continuity concept An item of cost that is direct for one business organization may be indirect for another business organization. True Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry? Uniform costing Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg. and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg. Compute material yield variance. Rs.100/- (Favourable)
Correct Answer Wrong classification Trial Balance does not get affected Transaction is totally omitted Wrong Posting Pre-requisites of Uniform Costing are :Spirit of mutual trust , Free Exchange of ideas , No rivalry The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considering the adjustments) is Rs.78,560/-. Select the adjustments which might have brought this change. Accrued commission income of Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of :Direct deposit into the bank Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales? Rs.200,000/Correct Answer Forecast of quantity and value of materials Analyses the performance of different budget centres Assists in predicting shortage of cash Objective is performance evaluation Time-keeping facilitates the preparation of payroll. True A worker is paid a monthly salary of Rs.500/- along with a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost. Semi-variable Accounts representing expenses will have ________ balance.
Debit The bank book shows an overdraft of Rs.117/- as on 31st December, 2003. It is found that the pass book is debited with Rs.11/- representing a dishonored cheque, originally received from Mr.A. The fact of dishonor was not recorded in the bank book. Find the balance as per pass book. Rs.128/- (overdraft) A low margin of safety indicates ________ fixed overheads. Higher The details regarding a food product manufactured by ABC Co. for the last one week are as follows : Standard cost (for one unit) : direct material -10 units @ Rs.1.50; direct wages - 5 hours @ Rs.8/-; production overheads -5 hours @ Rs.10/-. Actual (for whole activity) : direct materials -Rs.6,435/-; direct wages -Rs.16,324/-. Analysis of variances : direct materials price variance -Rs.585/- (Adverse); direct material usage variance -Rs.375/(Favourable); direct wages rate variance -Rs.636/- (Favourable); direct wages efficiency variance -Rs.360/- (Adverse); production overheads expenditure variance -Rs.400/- (Favourable) and production overheads volume variance Rs.750/- (Favourable). You are required to calculate the amount of production overheads incurred. Rs.19,600/The amount of profit which is retained by the organization is transferred to 'Reserves and Surplus' in the balance sheet. True Cash budget is extremely useful since it:Gives information about estimated cash inflows and outflows The objects of cost accountancy are :To ascertain cost and profitability , Cost Control , Presentation of Information Uniform costing is not a separate method of ________. Cost accounting If the storage cost of inventory increases, then the economic order quantity also increases. False The organization chart shows the following aspects :Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers
Find the budget which is inadequate as a cost control technique :Fixed budget The key factor determines the :Level of activity , Capacity utilization , Level of sales Cost control procedure deals with :Establishment of plans , Comparison of actual and planed performance , Computation of variance 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. The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission
S Ltd. operates a system of standard costing in respect of one of its products which is manufactured within a single cost centre. For one unit of product the standard material input is 20 litres at a standard price of Rs.2/- per litre. The standard wage rate is Rs.6/- per hour and 5 hours are allowed to produce one unit. Fixed production overhead is absorbed at the rate of 100% of direct wages cost. During the month just ended the following occurred : acutal price paid for materials purchased Rs.1.95 per litre; total direct wages cost was Rs.156,000/- and fixed production overheads was Rs.158,000/-. Direct material price variance-Rs.8,000/- (Fabourable); direct material usage variance -Rs.5,000/- (Adverse); direct labour rate variance -Rs.5,760/(Adverse); direct labour efficiency variance -Rs.2,760/- (Favourable) and fixed produciton overheads expenditure variance -Rs.8,000/-(Adverse). Calculate budgeted output in units for the month, actual hours worked and number of litres purchased during the month. Budgeted output - 5,000 units , Actual hours worked - 24,040 hours , Litres purchased - 160,000 litres Which of the following transactions should be excluded while preparing a cost sheet? Interest on loan , Bad debts , Expenses on criminal law suit Baum Differential Plan is a combination of Taylor's differential piece rate system and Halsey system and is also known as ________. Milwankee plan Features of double entry accounting system are :-
Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Features of convention of conservation are . . . Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realised , Applicable to valuation of current assets The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are capable of nullifying this balance. 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/From the following select the examples of errors of commission Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account Purchase day book for the month of April was under cast by Rs.1000/- which account should be credited ? ________ Suspense Account Revenues are more than the differential costs, then the proposed project should be ________ accepted Cost of fringe benefits provided to a factory worker should be charged to: Factory overheads Indirect material indicates that material which can be identified with the individual cost centre False The process of recording the business transactions in a defined set of records is referred to as ________. Balance Sheet Identify the fixed expenses from the following. Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor The disadvantages of supplementary overhead rates are:
It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity Judge the sentence in italics according to criteria given below: " It is difficult to adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production will vary according to the method used." The assertion and the reason are both correct The objectives of Uniform costing system are as follows: 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 The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system. Uniform Costing Correct Answer Scope of uniform costing Advantage of uniform costing Requisite for uniform costing Fields covered by uniform costing In practical circumstances, control ledgers may be maintained for the following categories: Sundry debtors , Sundry creditors , Advance to Staff Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of one year therefrom. Find the amount of prepaid maitenance expenditure for the year ended 31st March. Rs.5,833/The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet. True Correct Answer Real account Nominal account Proprietor's account Personal account
While preparing bank reconciliation statement for the month of September 2004, one should consider the balance as per bank book as on 1st September, 2004 and the balance as per pass book as on 30th September, 2004. False The main advantages of profit sharing are: Employees try to increase productivity , Incentives are shared by all the employees , Augments employees' efficiency These are the preventive costs of labour turnover. Cost of maintaining good relations with the workers, Cost of medical services, Cost of welfare facilities Hourly wage rate is Rs.25/- and the time allowed for a job is 15 hours. Harry completed the job in 12 hours. Calculate the effective hourly earnings for Harry under Halsey Plan. Rs.28.12 Marginal costing is found to be unsuccessful in the following situations: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 Graphically, fixed cost line will be ________ the 'x-axis'. Parallel to 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 Increase the selling price , Reduce cost of sales , Increase the selling efforts Preparation of direct material ________ budget is the responsibility of the Purchase manager. Purchase The integrated form of all functional budgets is known as: Master budget
For the given transaction find the wrong entry that has been passed in the books of accounts, the correct entry that should have been passed and the rectification entry required to rectify the mistake. "On 1st September, 2004 the total of the previous month's wages was debited to 'Manufacturing Wages Account". During the previous month, a new machine was installed, and the firm's own employees had spent time thereon; the previous month's wages for all such employees amounted to Machinery A/c. . . Dr. Rs.14,100/- To Manufacturing Wages A/c Rs.14,100/- , Machinery A/c . . . Dr. Rs.14,100/- To Cash A/c Rs.14,100/- , Rs.14,100/- To Cash A/c Rs.14,100/Management accounting is concerned with the following activities: Decision making , Safeguarding assets , Planning and controlling activities The overheads of a machine shop X should be apportioned using which of the following basis? Machine hours Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry? Uniform costing If you are required to enforce uniform costing system in your industry, how would you proceed? Collecting data from all units of your industry, Ensuring that the data collected is complete and correct, Maintaining secrecy of the data collected Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system. Capital investment , Plant size , Location If the proprietor has taken away goods worth Rs.5,500/- for personal use, find its impact on the proprietor's account in the organisatin. The capital will decrease by Rs.5,500/Accrued income indicates: Current year's income not received in the current year The actual loss incurred by a company, due to fire, is the extent of difference between the cost of goods destroyed and the amount of claim settled by the insurance company. True
Correct Answer Profit and loss appropriation account Manufacturing account Profit and loss account Trading account The process of finding the reasons for the difference in the balance as per bank book and pass book is known as ________. Reconciliation Which of the following transactions fall within the definition of the 'standing instruction' Club membership subscription The selection of the supplier may depend upon the following aspects: Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier Calculate inventory turnover ratio from the following: Maximum stock -7,000 units; minimum stock - 3,000 units and quantity of material issued during the year - 150,000 units. 30 Re-order quantity may be measured as: Maximum stock level - re-order level + (minimum usage X minimum re-order period) Labour turnover means: Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Select the non-monetary incentives Health and safety services , Canteen facility , Loans at reduced rate of interest Under the accelerating premium system incentive increases at a fast rate with the decrease in output. False Select the correct formulae for calculating break even point. Fixed cost / (Selling price per unit - Variable cost per unit), [Fixed cost / Marginal contribution] X Sales, [Fixed cost / (Fixed cost + Net Profit)] X Sales Merits of break even point analysis are as follows:
Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to graphically represent complicated data. Identify the budgets for which the production manager sould be held responsible: Production budget , Production overheads budget , Plant utilisation budget The composition of selling costs is given below : 1 salaries 4% of sales, travelling expenses 1.5% of sales, and sales office 2% of sales. Find the amount of selling overheads if the sales are Rs.120,000/-. Rs.9,000/Production costs of a factory for the year 2003-04 are as follows: direct labour cost Rs.100,000/-; direct material cost Rs.150,000/-; production overheads (fixed) Rs.50,000/- and production overheads (variable) Rs.80,000/-. The production manager projec Rs.426,800/It is very easy to measure the portion of increased sales which is due to expenditure incurred for advertisement of the product False Correct Answer Issue of shares Cash Sales Cash Budget Capital Expenditure Budget Overhead capacity variance is the outcome of: Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated The systematic process of identifying and reporting variance is known as ________. Variance analysis In the scheme of cost-________-profit analysis, an attempt is made to measure the variations of cost with volume. volume A cash payment of Rs. 1,000/- for travelling expenses has been entered in the books but not debited to travelling A/c. The trial balance will not agree. True
Purchases included an amount of Rs. 25,450/- representing purchase of computer. The rate of depreciation is 10% for computers. Calculate the net effect of this transaction on the profitability statement. Net profit will increase by Rs. 22,905/Ram is the owner of Dashrath & Sons. He is entitled to annual salary of Rs. 8,000/-. Find its impact on profit of the entriprise. The net profit will decrease by Rs. 8,000/Fundamentally, changes in price and changes in sales volume give rise to sales variances. True The factors that influence determination of budget period are: Type of budget, viz. Sales or capital expenditure budget, General economic conditions, Trade cycle of business XYZ Ltd. is selling 50,000 units of a product at Rs.40/- per unit. Variable cost is Rs.25/- per unit and fixed cost is Rs.200,000/-. The producer can increase sales volume by 20% by reducing the price by 10%. Do you recommend reduction in price? What will be profit if this action is undertaken? No: Revised profit Rs.460,000/Subsidiary books include: Cash Book, Purchase Register, Sales Register
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In India, where public undertakings operate along with the private sector undertakings, ________ enables a comparative assessment to be made of the two sectors. uniform costing The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions. Control The handloom industry will have ________ fixed cost and high variable cost. Low The sales forecast (quantity) should be compared with the ________ to find out whether it is possible for the firm to handle this level of sales. Production capacity ________ authorises the production department to issue requistion for materials. Bill of material An adjustment relating to outstanding expenses will ________ the net profit. Decrease Token or disc method is a related to the system of ________. Time-keeping Crane expenses should be apportioned on the basis of ________. Number of hours crane worked in the department Depreciation is caused by use factor, obsolescence and ________. Time factor ________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. Ledger Profit = Contribution per unit X ________.
Margin of safety (units) Advance received from customers is ________ for the organisation. A liability The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Depreciation If the owner brings in personal calculator for office use, ________ account should be credited. Capital Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting. Management Uniform costing is not a separate method of ________. cost accounting Generally all the liabilities will have ________balance. Credit If overhead absorbed i.e. overheads charged to units during the period is more than the overhead incurred, it is said that the overheads are ________. Over-absorbed Copy of a firm's account in the bank's ledger is known as ________. Bank statement The column which refers to the page number of the ledger is known as ________. Ledger folio Loss is equal to fixed cost minus ________ Contribution The variance which measures the difference between what is paid for a given quantity of materials and what should have been paid for, is known as ________ variance. Direct material cost In practical circumstances, the ________ are referred to as application of funds.
Assets The cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________. short run The expenses relating to maintenance and creation of demand for the product should be included in the ________budget Selling expenses If the firm is operating with zero margin of safety, decline of even a single unit in sales will result in ________. Loss The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________. Overhead If the standard contribution is less than the actual contribution, then ________ variance arises. Favourable If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can be stated as ________ sq.ft. tiles. 300000 The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system. Uniform costing If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________. Bad debts Margin of safety indicates ________ of operations. Profitability In calculation of total sales margin variance, the ________cost of sales is deducted from the actual sales revenue. Standard
Fixed cost is the cost that tend to remain ________ irrespective of ________ constant The principle of ________ is followed while preparing the financial statements. Going concern The process of attributing proportions of items of costs amongst const centres is called ________. Cost apportionment In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system. fertilizer Non-trading income is disclosed on the credit side of ________ account. Profit and loss In the adjustment entry passed for closing stock, the ________ account should be credited. Trading Goods returned to the suppliers from whom it was ________d is recorded in thePurchasereturn register. Purchase The stores department is a ________ department. Service The ________ is responsible for material losses while in storage. Store-keeper The ________ is a perpetual inventory record. Bin card Economical use of labour, materials and facilities can achieved with the help of ________. Budgetary control Carriage charges paid for a new machine purchased if debited to carriage account would affect the ________ Machinery A/c and carriage A/c The difference between sales and cost of sales is termed as ________.
Net Profit ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives. Management If the bank pays off the credit card bill, as per the standing instructions, the overdraft as per bank book will be ________ the overdraft as per pass book. Lesser than If the ordering cost ________s, then the economic order quantity will Increase. Increase The method which deals with ownership rights being given to workers is known as ________ method of remuneration. Co-partnership Cost volume profit analysis focuses attention on the ________ effect of a particular course of action. short run A ________ can be defined as a part of the orgainsation for which separate budget can be prepared and implemented. Budget centre The balance of the suspense account will ________ after all the errors are become zero Income Tax Act, recognise only one method of depreciation namely ________. Written down value method The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________. uniform cost manual Profit volume ratio is also known as ________. Contribution to sales ratio A ________ inventory turnover period indicates efficient utilisation of material. Low Dividend received on amount invested in shares is an example of ________.
Non-operating income ________ variance represents the over or under utilisation of pland and machinery. Capacity Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________. 90% to 100% While preparing trial balance, the balance as per ________ book is considered as bank balance. Bank ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting Management If it is given that the office expenses account includes Rs.10,000/- for purchase of computer-table, the net profit will ________, after the necessary adjustment is done. Increase The final result disclosed by trading account is the ________profit earned by the organization. Gross The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Accounting period The various contents of a uniform cost manual are organisation, cost accounting system and ________. presentation of information In order to rectify the totaling mistake, wherein the sales return ledger was undercast by Rs.2,000/-, the suspense account should be ________ with Rs.2,000/credited
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. Sales margin volume The treatment of ________ time in cost accounting depends upon the distinction between normal and abnormal time. Idle Budgeted profit and loss account and budgeted balance sheet are also known as ________. Master budget Factory light, telephone expenses are examples of ________ expenses. Indirect For successful implementation of uniform costing system, it is very essential to devise ________, containing recommended cost accounting plan and procedures. cost manual The combination in which different products are sold by a company is known as ________. Sales mix Discount received from the creditor has been entered in the creditor's account but discount has not been credited; what type of error is this ________ Omission of posting an amount in the ledger Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ . Income Tax Act, 1961 An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________ P's A/c and Q's A/c A low margin of safety indicates ________ fixed overheads. higher Category A items, as per ABC analysis, represent ________ % of the total number of items in inventory. less than 10
A complete list of all material required, with quantities, for a particular job is given in the ________. Bill of material The term ________ indicates expenditure incurred on or attributable to a given thing. Cost Entry for dishonour of cheque appears only in the pass book, this entry should be ________ in the bank book. Passed Since the pass book and the bank book record the ________ transactions, the bank balance as per these books should be equal. Same Depreciation charged on office furniture on straight line basis is an example of ________. Administration overheads If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's personal contribution, ________ account should be debited in the books of accounts of the business. Drawings Contribution represents pool of resources available for meeting all costs other than ________. Variable costs The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Capital expenditure budget Under the AB________ analysis, nuts and bolts used as material will be classified as category C. C Marginal costing is also known as ________. Variable costing Purchase of national saving certificates by the company from its profits, should be debited to ________ account.
Investments The difference between sales and prime cost is known as ________. Gross Profit Under-recovery of overheads implies that the profit will be________ to the extent of total under-recovered overheads. Increased Furniture account will always have a ________ balance. Debit The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Total variable overhead ________ is an example of intangible asset. Goodwill A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed. Budget Measurement of ________ gives an idea of the degree of mobility of labour. Labour turnover A person in charge of a ________ may be held responsible for its proper functioning and cost control. Cost centre Generally, all real accounts will have a ________ balance. Debit Angle formed by the intersection of total cost line and sales line is called angle of ________. Incidence ________ authorizes the production department to issue requisition for materials. Bill of material A written order sent to inform the purchasing department of a need for materials is called a ________.
Purchase requisition note The ________ is of immense help in guiding the companies to operate their accounts on uniform basis. Uniform cost manual As per the provisions of Section 209 of ________, all the company form of organization is legally required to follow the mercantile or accrual system of accounting. The Companies Act, 1956 The system which combines the benefits of time rate and piece rate system by providing a minimum time rate payment along with incentives is known as ________ system. Gantt task bonus Dividend received on amount invested in shares is an example of ________. non-operating income Large angle of incidence indicates ________ amount of profits. higher ________is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time. Trial Balance Re-order level should be higher than ________ but lesser than maximum stock level. Minimum level Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's Account. In order to rectify the mistake, which account should be debited ? ________ Suspense account Interest receivable is a________ for the organisation. Current sset An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe. suspense
Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @25% of factory cost, then the amount of selling overheads should be Rs.________/83750 Creche expenses may be appropriately approtioned on the basis of ________. Number of female workers Indirect Cost is termed as ________. Overhead In case of seasonal industry, the budget period may be taken as ________. One season The process of recording the business transactions in a defined set of records is referred to as ________. Balance sheet The ________ books are preferred when the volume of transactions is very large. Subsidiary If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value. 0.75 In case of defective material being returned by the stores department to the vendor, such material should be valued at the________. Purchase Price Contribution represents pool of resources available for meeting all costs other than ________. Variable Costs Overheads chargeable to a product, using direct labour cost basis, may be calculated by multiplying percentage of direct labour cost and ________. Direct labour cost of the product Education facility to workers and their children, pension, superannuation fund are examples of ________ incentives. Non-monetary The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________.
Uniform cost manual ________ is the summary of all the balances in all the accounts listed in ledger account of an organization at any given point of time. Trial Balance A worker is paid a monthly salary of Rs.500/- along with a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost. Semi-variable Accounts representing expenses will have ________ balance. Debit A low margin of safety indicates ________ fixed overheads. Higher Uniform costing is not a separate method of ________. Cost accounting Baum Differential Plan is a combination of Taylor's differential piece rate system and Halsey system and is also known as ________. Milwankee plan Purchase day book for the month of April was under cast by Rs.1000/- which account should be credited ? ________ Suspense Account Revenues are more than the differential costs, then the proposed project should be ________ accepted The process of recording the business transactions in a defined set of records is referred to as ________. Balance Sheet The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system. Uniform Costing Graphically, fixed cost line will be ________ the 'x-axis'. Parallel to
Preparation of direct material ________ budget is the responsibility of the Purchase manager. Purchase The process of finding the reasons for the difference in the balance as per bank book and pass book is known as ________. Reconciliation The systematic process of identifying and reporting variance is known as ________. Variance analysis In the scheme of cost-________-profit analysis, an attempt is made to measure the variations of cost with volume. volume Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement historical legal After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier ordered variation Labour Turnover indicates ________ in labour force showing a highly increasing trend or highly ________ trend change decreasing Under Gannt Task bonus system where the output is ________ payment is made as per minimum time rate, output is ________ payment is made as per time wages plus some increase in wage rates below standard at standard ________ and ________ are non monetary incentives Safety services education facility Semi ________ overheads are neither ________ nor variable in nature.
fixed variable Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management uncontrollable lower variable cost is the cost that tend to ________ in direct proportion with ________ vary level of activity ________ and ________ are examples of semi- variable overheads. Maintenance cost electricity Rs.5000 paid as ________ to ________ should be debited to salary account Mahesh salary Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads actual estimated ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Like office rent, Audit fees ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting . Talling arithmetical To ascertain the ________ of all the transactions recorded in the ledger account, the account is required to be ________ Net effect Balanced
The levels indicated on the Bin card enables the ________ department to keep a watch on the balance and replace the material as soon as it reached at ________ level. Stores Re-order level Generally accounts of the assets will have ________ balance and liabilities will have ________ balance debits credits Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book debited credited While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers purchase quotation Administration overheads are ________ in nature and can be controlled mainly at ________ level of the management fixed top Planning lays down the course of action to be taken in future. In case budgetary control, it is in the form of the ________ and in case of ________ costing, it is in the form of the standard cost budgets standard Fixed cost is the cost that tend to remain ________ irrespective of ________ constant level of activity The process of Allocation & apportionment can followed to decide the ________ of overheads to each budget center Allocation & apportionment Loading The ideal standards are generally ________ in nature and the variances always shows ________ trends theoretical
unfavorable Bin card is maintained by ________ department whereas ________ is maintained by costing department. Stores Store ledger Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period cost revenues Management Accounting has a very ________ scope and it requires ________ organizational structure wide elaborate Along with financial accounting, ________ and ________ are the other streams of accounting Cost Accounting Management Accounting The cost accountancy is defined as the application of costing principles,methods and techniques to the ________, art and practice of ________ ascertainment of the profitability and the presenta science cost control Preventive costs of labour turnover refers to all the costs which may be incurred by the organisation to keep workers happy and ________ them from ________ the job discourage leaving Replacement costs of labour turnover are ________ and ________ training breakages of machine Break even point is a situation of no ________ no ________ profit loss
Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match reasons pass book In financial statements P& L Accounts relates to a specific duration whereas ________ is for a given point of time P& L Accounts Balance sheet Bin Card is not an ________ record but only a ________ record. Accounting Quantitative Standard Costing system facilitates ________ and ________ for each individual or department Delegation of authority Fixation of responsibility If ________ is not provided, the asset may appear in the Balance Sheet at an ________ amount depreciation overstated Expenditure like general lighting are apportioned considering ________ as a base and expenditure like depreciation are apportioned considering ________ as a base. number of light points value of assets Under absorption of overheads may take place due to the reasons like ________ overheads being more than the ________ overheads actual estimated A key factor is defined as the factor which, at a particular point of time or over a period will ________ the volume of ________ limit output The difference between sales and factory/ works cost is termed as ________ the difference between sales and ________ ermed as net profit gross profit
cost of sales A budget manual is a document setting out the ________ of the persons and ________ required for the budget control. Responsibilities Forms and procedures ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting. Talling arithmetical Under the repeated distribution method the overheads of ________ department are distributed to other departments on agreed ________ service percentage Variable costs are the controllable costs at the ________ level of the management whereas fixed costs can be controlled only on the ________ level of the management Lower Top ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Like office rent Audit fees
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Re-order quantity may be measured as : Maximum stock level - re-order level + (minimum usage X minimum re-order period) Which of the following is a valid classification of the salary paid to the foreman in charge of the packing department? Direct product cost Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre piece. The cost of sales is composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, you are required to determine the future selling price, if the present rate of gross profit is to be maintained. Rs.452/The main object of establishing the maximum stock level for material is : To ensure that inventory never exceeds this limit XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a.on 1st October, 2003. Interest is to be paid on half yearly basis. What treatment should be given in the books of accounts of XYZ & Co. as on 31st March, 2004? Interest account should be debited with Rs.7,520.55 and outstanding interest account should be credited with Rs.7,520.55 The pass book showed a credit balance of Rs.1,000/-. This balance was after considering the dividend of Rs.25/- collected by bank and Rs.5/- charged as collection expenses: these enteries are not made in the bank book. Find the balance as per bank book. Rs.1,020/Compute fixed overheads calendar variance when fixed overhead volume variance is Rs.250/- (Favourable); fixed overheads efficiency variance is Rs.2,150/- (Adverse) and fixed overheads capacity variance is Rs.800/(Favourable). Rs.1,600/- (Favourable)
The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged as depreciation. Calculate the rate of depreciation. 0.17 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? Rs.26,545.45 A good purchase system, for materials, prevents production hold-ups due to: Lack of material The store-keeper should initiate action for the purchase of a material, when it reaches its : Re-order level Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on credit basis & allowed 10% discount on on the spot transaction. Cash Account debited to Rs. _____________ 45000 A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs 500 Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs 540 This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Differential cost The prime cost is Rs. 10,00,000 the factory cost is Rs. 13,00,000, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost? 37,86,000 Under Merrick Differential Piece rate System of wage payment up to 83% of efficiency following rate is offered. Normal
Under the Emersons Efficiency Bonus System at following efficiency level no bonus is payable. Below 66.66% In case of industries where capital investment is very high, budget should be prepared for a Longer period Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i Remuneration During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Rs. 83.60 Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500. Rs.4500/- ( Favorable ) Cost-sheet may be prepared separately for each Different Cost Centre The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000,estimated life 10 yrs. Calculate the depreciation according to straight line method 10000 For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased 3,15,000 Accounts is a Record of all transaction Budget is prepared in terms of Quantity and/or Money __________ Accounting becomes a source of information for Management Accounting.
Financial Standard costs are the targets to be attained by the actual performance. Minimum During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Rs. 75 Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is _______ 750 The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 deducted as depreciation. Calculate the percentage 0.17 Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ 15000 This cost indicates historical cost which is incurred in past. Sunk cost If production overheads to be absorbed are Rs. 50000/- and labour hours worked are 100000 then the labour hour rate will be, Re. 0.50 per labour hour. Calculate Efficiency Variance, If actual production is 22,000 units, Standard production in actual hours is 21,000 units and Standard rate per unit is Rs.1.5/. Rs.1,500/-( Favorable ) Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is Rs.5/- per unit and actual sales volume is 500 units. Rs.200/- ( Favorable ) Standard may not be necessarily useful for this purpose. Forecasting During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales 20,000 kg
Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Differential cost A firm employs ten workers at an hourly rate of Rs.20/-. They worked for 40 hours each and completed the job for which standard time was 48 hours for each worker. Calculate labour cost for the job under the Rowan Plan. Rs.9,333.33 Two competing companies Hero Ltd. and Zero Ltd. sell the same type of product in the market. Their forecasted profit and loss accounts for the year ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variable cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Variable cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Hero Ltd. Judge the sentence in italics according to criteria given below : " It is difficult to adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production will vary according to the method used." The assertion and the reason are both correct Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find the interest expenditure on 31st March, 2004. Rs.500/The direct material useage budget and direct material purchase budget differ because of which of the following: A planned change in the level of material stock If a predetermined overhead rate is not employed an the volume of production is increased over the level planned, the cost per unit would be expected to : Decrease for fixed costs and remain unchanged for variable costs It is said that adoption of uniform costing creates customer confidence because . . . Prices are reliable The following figures relate to a company manufacturing a varied range of products : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stability in prices, calculate the profit volume ratio
0.3 Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work without an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours. Rs.29.98 Flood occurred on 18th March, 2004 and goods worth Rs.28,000/- were destroyed. The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claim amount was received on 2nd April, 2004. Find the impact of this transaction on net profit for the year ending 31st March, 2004. The net profit will decrease by Rs.18,000/As a part of the data presented in support of a proposal to icnrease the production of clock radios, the sales manager of Wittman Electronics reproted the total additional cost required for the proposed increased production level. The increase in total cost is known as : Incremental cost Benefits available from revenue expenditure are received in the : Same year Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision for discount from creditors is to made @ 5%. Find the impact of this provision on the net profit. The net profit will increase by Rs.761.25 XYZ Ltd. has sufficient idle capacity. It has received an enquiry for the supply of 300 units (packed in better box at an additional cost of Rs.20/- per box). The variable cost of manufacturing the product is Rs.150/-. The company expects a profit of Rs.6,000/- from this wholesale offer. What minimum price should it quote for this deal? Rs.190/Rs. 2500 paid for the purchase of radio set for personal use of proprietor debited to general expenses account for rectifying the error, which A/C to be debited Drawing A/C Discount received from the Creditors has been entered in the Creditors A/C but discount amount has not been credited, for rectifying such error which account to be debited. Suspense A/C
Under the differential time rate method of wage payment between 90% to 100% of efficiency following rate is offered. Rs. 1.40 per hour For a material, if standard quantity is 500 kg and standard price is Rs.6/- per kg. Find out the Material Cost variance if actual quantity is 400 kg and actual price is Rs.6/- per kg. Rs.600/-( favorable ) Find out Labour Efficiency Variance, if Standard Rate is Rs.1.50/- per hour, Standard hours are 12,000 and Actual hours are 12,600. Rs.900/- ( Adverse ) Calculate Labour Mix Variance, If revised standard hours are 16,500/-, Standard rate is Rs.3/- and Actual hours are 13, 500. Rs.9,000/- ( favourable ) Calendar Variance arises only if there is abnormal increase or decrease in Actual number of working days Old furniture sold for Rs. 5400 has been entered as Rs 4500 in the cash book, for rectifying the same Suspense A/C credited to Rs 900 Goods return by Pande worth Rs. 2000 should have appeared on the credit side of Pandes account for rectifying the same. Following account to be credited Suspense A/C Salary given in trial balance Rs. 5000/-, still 2000/- is to be paid . The outstanding salary is debited to Profit &Loss A/C. The second effect is -Transfer to balance sheet liability side If at 50% capacity, total factory overheads are Rs.10,000/- (out of which 60% are fixed and 40 % are variable) then what will the amount of total factory overheads at 60% capacity Rs.10,800/__________ Accounting is primarily protects the interest of the outsiders dealing with the organization various capacities like investors, suppliers, customers etc. Financial
If production overheads to be absorbed are Rs. 20000/- and machine hours worked are 5000 then the machine hour rate will be, Re. 4 per machine hour. This is the best example of element wise classification of cost. material This is the process of recording attendance time of the workers. Time keeping Journal is popularly known as 'Book of . . . Original Entry The cost that indicates historical cost, which is incurred in past, is known as Sunk cost Presentation of information to enable managerial decision making' is one of the objects of which of the following Cost Accounting An advertisement contract was made with an artist which stated that the remuneration will be 12% of net sales. On an average the monthly sales were Rs.36,000/-, however the average rate of sales return was 5% of that month's sale. Find the expenditure on account of advertisement. Rs.49,248/Goods kept in the godown were destroyed by fire on 18th June, 2004. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amont which should be debited to the profitability statement. Rs.18,950/While preparing the bank reconciliation statement as on 31st March, 2004 you find the following discrepancy : 'a cheque of Rs.3,700/- received and deposited in bank on 27th March, 2004 was entered credited in the pass book on 3rd April, 2004.' In this background, which of the following statement holds true as on 31st March, 2004? Balance as per pass book < Balance as per bank book A written request sent to a supplier for specified goods at an agreed upon price is often called as : Purchase order Selecting an appropriate method of valuation of inventory is important because :
It influences the figure of gross profit Which variance is used to analyse the effect of change in the quantity of output from a given mix of inputs? Materials yield variance The capacity utilised to installed capacity ratio is 80% for the company. The capacity utilisation ratio in respect of a machine for a particular month is 90%. The available working hours in a month are 200 hours. The break of idle time is as follows : Waiting for job - 5hours, breakdown - 4 hours and waiting for tools - 3 hours. Calculate the idle time cost when the hourly fixed cost of running the machine is Rs.8/-. Rs.96/Judge the given statement according to the given criteria. Goods being real account, when goods are lost by fire, the goods account should be debited because the goods are not going out of the factory. The statement is correct but the reason is incorrect The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen? The liability side of the balance sheet will increase by Rs.2,000/A cheque of Rs.400/- received and deposited into bank on 26th September, was credited in the pass book but was omitted to be entered in the bank book: this error will result in : Difference in the balance as per bank book and as per pass book P Ltd. produces a product having a monthly demand of 4,000 units. For every one unit of finished product one unit of a component X is required at purchase price of Rs.20/-. The ordering cost is Rs.120/- per order and the holding cost is 10% per annum. If the company places each order for 2,000 units due to financial constraints, what is the extra annual cost? Rs.80/Which of the following is the most efficient use of the clock card? To facilitate payment for time spend on the work premises A firm of boiler-house engineers provides engineering services to large number of factories having boiler houses. The firm charges on the basis of number of hours its engineers have worked for the client. Each engineer works for eight hours on each working day. Each engineer enjoys Saturday and Sunday as holiday. In addition he is granted a total of 21 more paid holidays in a year. An engineer's annual remuneration comprises (for the year
Rs.182.29 ABC Ltd. has a proposal of utilising a cheaper raw material which will increase the contribution from Rs.100/- per unit to Rs.125/- per unit. However, the use of cheaper raw material may result in decrease in sales by 10% (to 450 units only). Find the impact of using the cheaper raw material on the amount of contribution ( net increase or decrease in contribution). Increase in contribution Rs.6,250/The finance manager is responsible for which of the following budget? Cash budget The variance which measures the deviation of the rate actually paid to labour as from the standard hourly rate is known as: Labour rate variance From the following data, determine the net profit if sales are 20% above the break even point. Selling price Rs.20/- per unit, variable cost Rs.15/- per unit and fixed overheads Rs.20,000/Rs.4,000/As on 30th September, 2004 the cost of closing stock was Rs.84,696/- and its market price as on the same day was Rs.66,584/-. Which value of closing stock should be considered in the final statement of accounts for the year ended on 30th September, 2004? Rs.66,584/A' started business with cash Rs. 5,000/-, building Rs. 5,000/-, furniture Rs. 2,000/-. What is the total amount of capital? Rs. 12,000 The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and variable costs are increased by 12.5%. Which of the following is the amended contribution to sales ratio? 0.333 Loss on account of goods lost due to earthquake should be debited to which account? Profit and loss account The use of contribution per unti of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following?
Maximisation of short-term profit Which of the following is a correct definition of the key factor? The factor which limits the activites of the undertaking The process of recording the costs in a formal and systematic manner with the intention of preparing statistical data there from a ascertain the cost, is known as . . . Cost accounting Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one year from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium? Rs.3,750/Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to be bad. What should be the amount of debtors that must be disclosed in the balance sheet? Rs.53,750/A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of : Direct deposit into the bank The wages paid to a trainee who constructs wooden mould for concrete laying on a building contract should be defined as : Direct labour cost The half-yearly sales of product X are as follows : 1st half -30,000 units; 2nd half - 37,500 units. The production pattern of the company is based on 80% of the sales of the current six months and 20% of the budgeted sales of the next six months. Calcu 1st half -31,500 units; 2nd half - 30,000 units Unearned commission of Rs.5,000/- needs to be recorded in the books of accounts. Find its correct impact. The asset side of the balance sheet will increase by Rs.5,000/The following data relates to the month of October : Actual variable overheads Rs.60,000/-; budgeted variable overheads Rs.80,000/-; actual output 900 units; budgeted output 1,000 units; standard time for one unit - 2 hours. Calculate variable overhead efficiency variance. Rs.4,000/- (Favourable)
Urgent action for replenishment of material stock must be taken once the inventory reaches its : Danger level Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging to that industry ? Uniform costing A lathe machine was purhcased on 31st March, 2004 for Rs.65,000/-, however it was installed only on 5th April, 2004. The depreciation is charged @ 15% p.a.. Find the amount of depreciation charge for the said lathe machine for the year ended 31st March, 2004. Nil If the quantity of material purchased and quantity used are different, then which quantity should be used to compute the material price variance? Quantity of material purchased Which of the following is usually prepared daily by employees for each job worked on? Job card It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because : The cost structure is different Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction? Maintenance of machine account Which of the following operations would normally be carried out first when preparing a master budget? Determining the budget period Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg.Compute material yield variance. Rs.100/- (Favourable)
Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided @ 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period? Profit and loss account should be debited with Rs.1,866.67 KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Rs.100,000/The gross profit transferred from the trading account is Rs.98,999/-. The expenses debited to the profit and loss account are salary Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and managing director's incentive Rs.28,000/-. It was noted that no entry was made for salary of one month which was due but not yet paid. Find the net profit of the company. Rs.34,408.09 The budget manual must contain statement regarding: Objectives of the orgainsation Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and advise sent thereafter, may lead to: Balance as per bank book > Balance as per pass book Rent of Rs.7,500/- for the month of April was received in March. Which account should be credited in the books of accounts for making an entry for receipt of the said amount? Rent received in advance account Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account? Rs.45,000/Included in the trial balance is the sales promotion suspense account with a debit balance of Rs.6,300/-. It is given that this balance should be written off. Calculate its impact on profit of the company. The net profit will decrease by Rs.6,300/-
The cost of idle time incurred by employees that is considered normal for the production process should be charged to : Factory overheads ABC Ltd. is planning to sell 200,000 units of product B. The fixed costs are Rs.400,000/- and the variable costs are 60% of the selling price. In order to realize a profit of Rs.100,000/-, the selling price per unit would have to be : Rs.6.25 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: Re.0.98 Which of the following is a more descriptive term for the type of cost accounting often called "direct costing"? Variable costing Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools? By providing depreciation to the extent of Rs.15,000/Which of the following cost is also termed as Prime Cost ? Direct cost The opening balance of cash account is Rs. 25,000/-, cash received from debtors Rs. 30,000/-, sold goods on cash basis amounting to Rs. 50,000/-, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the closing balance of the cash account? Rs. 80,000 Opening stock valued at Rs.7,400/-; Purchases Rs.24,700/-; Wages Rs.5,400/-; Sales Rs.48,600/-; Closing stock Rs.7,000/-. Calculate Gross Profit? Rs.18,100/Quantify the increase in profit on account of following errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated @10% p.a. (b) Interest received on bank deposits was credited to dividend received account, Rs.1,550/- (c) A television purchased for the managing director's office for Rs.45,000/- was debited to Interior decoration expenses.
Rs.43,200/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. The net profit will not be affected Sold goods to Amitabh worth Rs. 15,000/- against 15% trade discount. In this case with what amount should the sales account be credited? Rs. 12,750 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 ? Rs.300,000/Find the budget which is inadequate as a cost control technique : Fixed budget 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. Rs.3,00,000/The reporting method used in the costing system should be based on the principle of Management by exception 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: Service costs M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as Drawings 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. Rs.8,279.63
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 ? 0.1765 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, The statement and its reason are both incorrect The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations Management Which document facilitates estimating material cost of a particular job, before completion of that job? Bill of material Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit. The net profit will not be affected Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision for discount from creditors is to be made @ 5%. Find the impact of this provision on the net profit. The net profit will increase by Rs.761.25 The overheads apportioned to three production departments A, B and C and two service departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are shared by A, B, C and Q in the ratio of 4 : 3 : 2 : 1 and that of department Q are shared by A, B, C and P in the ratio of 3 : 3 : 2 : 2. Ascertain the total overheads of each production department. A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/Basic objective of Uniform Costing is :Comparison The integrated form of all functional budgets is known as :Master budget
The capital expenditure budget is important because it involves :Huge cash outflow Which of the following is most likely to be an allocated production overhead cost to the finishing cost centre? Salary of the finishing center's manager In considering a special order situation that will enable a company to make use of presently idle capacity, which of the following costs would be irrelevant? Depreciation Currently Beta Ltd. is earning a contribution of Rs.80/- per unit and the variable cost is Rs.180/- per unit. Its fixed costs are Rs.200,000/-. Its existing sales are 5,000 units. The company has a proposal that the sales staff may be paid a commission of 10% of sales instead of fixed salaries totaling Rs.80,000/. This action is expected to increase the sales by 10%. Compute the amount of profit assuming the proposal is accepted? Rs.177,000/Relevant costs in decision making are : Those costs which will arise as a result of the proposed action Basic objective of Uniform Costing is . . . comparison Interest on bank loan, was paid till the quarter ending 30th September, 2003, Rs.36,000/-. Find the amount to be debited to the profit and loss account for the year ending on 31st March, 2004, assuming the loan is not yet repaid as on this date. Rs.72,000/The features of the Halsey Plan are: The benefit of time saved is divided equally between the employer and employee Determine re-order level from the following : Maximum daily consumption 200 units; maximum delivery period - 12 days; average daily consumption 150 units and average delivery period - 8 days. 2,400 units
With the help of the given information, find actual fixed overheads for actual output. Fixed overheads volume variance -Rs.75,000/- (Favourable); fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance Rs.100,000/- (Adverse) and standard fixed overheads for actual output -Rs.575,000/-. Rs.600,000/Fixed deposit bearing interest @ 5.50%, for Rs.10,000/- was kept with Bank of India on 1st June, 2003, for a period of one year. The type of the fixed deposit is cumulative, i.e. interest shall be received only on maturity. What treatment should be given in the books of accounts on 31st March, 2004, the year ending date? An entry for Rs.458.34, debiting interest accrued but not due account should be passed The periodical total of sales book was cash short by Rs. 5000 for rectifying the same, which A/C to be debited Suspense A/C Under the differential time rate method of wage payment up to 80% of efficiency following rate is offered. Rs. 1.00 per hour This is an example of semi variable overheads. electricity Calculate Labour Rate Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and actual hours are 13, 500. Rs.6750/- ( Adverse ) Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight inward Rs.35,000/-, closing stock Rs.2,00,000/-, direct wages Rs.2,35,000/-. Calculate the prime cost. Rs.10,50,000/A group of 10 men and 20 women workers were expected to produce 400 units of a product in an 8 hour day. The standard hourly rate was fixed at Rs.25/- and Rs.15/-, respectively.Actually, a group of 15 men and 10 women workers was deployed and paid for 8 hours a day at an hourly rate of Rs.22/and Rs.18/-, respectively. Two hours were wasted for the entire group due to power failure and only 300 units were produced. Calculate labour rate variance. Rs.120/- (Favourable)
Uniform costing system is useful in the following areas Classification of cost accounts 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: Variable costs Material price variance for a job is Rs.800/- (Favourable). Actual quantity of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate material cost variance. Rs.1,600/- (Favourable) Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ 15000 Standard may not be necessarily useful for this purpose. Forecasting During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales 20,000 kg Two competing companies Hero Ltd. and Zero Ltd. sell the same type of product in the market. Their forecasted profit and loss accounts for the year ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variable cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Variable cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Hero Ltd. Standard Costs are used as tool for Cost Control The material physically received is compared with material ordered as per the this order Purchase Order Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________. 12750
This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Differential Cost Margin of safety are the sales beyond break even point Labour cost is the cost of __________ paid to employees of the organization. Remuneration For a material, if standard quantity is 400 kg and standard price is Rs.3.75/per kg. Find out the Material Usage variance if actual quantity is 500 kg and actual price is Rs.3.60/- per kg. Rs.375/-( Adverse ) Selling price per tonne is Rs. 69.50 , variable cost per tonne is Rs. 35.50 and fixed cost is Rs. 18,02000. Find out the BEP in units, 53000 The material issued to production department may be returned back to the stores because material issued in excess requirement and Material issued is defective A started business with cash 5000, building 5000, furniture 2000, having depreciation of 10% on building. The total amount of capital comes to Rs. __________ 11500 Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will be prime cost. 10,50,000 A Co. having factory cost of Rs. 13,10,800. The administrative overheads are salaries 40,000, rent & rates 6400, Traveling expenses 12,400, Depreciation 2400, Directors fees 24,000, General Charges 2 14,59,200 The cost that varies in direct proportion with the level of activity is called variable cost Calendar Variance arises only if there is abnormal increase or decrease in Actual number of working days
If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the quantity of production 4,500 kg Which of the following costs is most likely to have a cost behaviour pattern described as ..a fixed cost upto an activity level of 1,000 units, with a variable cost there after which decreases from 10 paise to 8 paise per unit at 2,000 units? Wages payment which is fixed for a minimum output quantity after which a bonus per unit is paid which reduces when activity level exceeds 1,000 units Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'. The worker has actually completed the job in 6 hours, i.e.6 X 60 = 360 'Bs'. Time wage rate is Rs.20/- per hour. Bonus is shared between the worker and the foreman in the ratio of 3:1. Calculate total earning of the worker as per Bedeaux Point System. Rs.180/Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weather, viz. icecream, sweaters, etc. The statement and the reason are both incorrect 200 units of material were purchased from X @ Rs.5/- per unit and 300 units were purchased from Y @ Rs.6/- per unit. The organisation follows FIFO system of pricing of issues and the above purchases have been recorded in stores ledger. 120 units have already been issued. 60 units received from X are defective and are therefore returned. Find the value of the material returned to X. Rs.300/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? Rs.300,000/Find the balance as per pass book. Bank Book - 10/10/04 - Paid rent Rs.10,000/-; 15/10/04 - Received cheque from debtor, Mr. X, for Rs.15,000/-; 20/10/04 - Issued cheque of Rs.25,000/- to Rahul Construction Co.; 25/10/04 Issued cheque for Rs.5,000/- to XYZ Ltd. and balance as on 01/10/04 Rs.55,000/-. Pass Book : 5/11/04 debited Rs.25,000/- being cheque of Rahul Construction Co.; 6/11/04 debited Rs.5,000/- being cheque of XYZ Ltd. and 9/12/04 credited Rs.15,000/- being cheque of Mr. X. Rs.70,000/Going concern concept is also known as :-
Continuity concept Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry? Uniform costing Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg. and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg. Compute material yield variance. Rs.100/- (Favourable) A dividend warrant of Rs.2,076/- was paid direct to the bank and nothing appeared in the cash book. This is an example of :Direct deposit into the bank Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales? Rs.200,000/The bank book shows an overdraft of Rs.117/- as on 31st December, 2003. It is found that the pass book is debited with Rs.11/- representing a dishonored cheque, originally received from Mr.A. The fact of dishonor was not recorded in the bank book. Find the balance as per pass book. Rs.128/- (overdraft) The details regarding a food product manufactured by ABC Co. for the last one week are as follows : Standard cost (for one unit) : direct material -10 units @ Rs.1.50; direct wages - 5 hours @ Rs.8/-; production overheads -5 hours @ Rs.10/-. Actual (for whole activity) : direct materials -Rs.6,435/-; direct wages -Rs.16,324/-. Analysis of variances : direct materials price variance -Rs.585/- (Adverse); direct material usage variance -Rs.375/(Favourable); direct wages rate variance -Rs.636/- (Favourable); direct wages efficiency variance -Rs.360/- (Adverse); production overheads expenditure variance -Rs.400/- (Favourable) and production overheads volume variance Rs.750/- (Favourable). You are required to calculate the amount of production overheads incurred. Rs.19,600/Cash budget is extremely useful since it:Gives information about estimated cash inflows and outflows
Find the budget which is inadequate as a cost control technique :Fixed budget Cost of fringe benefits provided to a factory worker should be charged to: Factory overheads Judge the sentence in italics according to criteria given below: " It is difficult to adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production will vary according to the method used." The assertion and the reason are both correct Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of one year therefrom. Find the amount of prepaid maitenance expenditure for the year ended 31st March. Rs.5,833/Hourly wage rate is Rs.25/- and the time allowed for a job is 15 hours. Harry completed the job in 12 hours. Calculate the effective hourly earnings for Harry under Halsey Plan. Rs.28.12 The integrated form of all functional budgets is known as: Master budget The overheads of a machine shop X should be apportioned using which of the following basis? Machine hours Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry? Uniform costing If the proprietor has taken away goods worth Rs.5,500/- for personal use, find its impact on the proprietor's account in the organisatin. The capital will decrease by Rs.5,500/Accrued income indicates: Current year's income not received in the current year Which of the following transactions fall within the definition of the 'standing instruction' Club membership subscription
Calculate inventory turnover ratio from the following: Maximum stock -7,000 units; minimum stock - 3,000 units and quantity of material issued during the year - 150,000 units. 30 Re-order quantity may be measured as: Maximum stock level - re-order level + (minimum usage X minimum re-order period) The composition of selling costs is given below : 1 salaries 4% of sales, travelling expenses 1.5% of sales, and sales office 2% of sales. Find the amount of selling overheads if the sales are Rs.120,000/-. Rs.9,000/Production costs of a factory for the year 2003-04 are as follows: direct labour cost Rs.100,000/-; direct material cost Rs.150,000/-; production overheads (fixed) Rs.50,000/- and production overheads (variable) Rs.80,000/-. The production manager projec Rs.426,800/Purchases included an amount of Rs. 25,450/- representing purchase of computer. The rate of depreciation is 10% for computers. Calculate the net effect of this transaction on the profitability statement. Net profit will increase by Rs. 22,905/Ram is the owner of Dashrath & Sons. He is entitled to annual salary of Rs. 8,000/-. Find its impact on profit of the entriprise. The net profit will decrease by Rs. 8,000/XYZ Ltd. is selling 50,000 units of a product at Rs.40/- per unit. Variable cost is Rs.25/- per unit and fixed cost is Rs.200,000/-. The producer can increase sales volume by 20% by reducing the price by 10%. Do you recommend reduction in price? What will be profit if this action is undertaken? No: Revised profit Rs.460,000/-
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Accounting is an art of recording, classifying & summarizing in a significant manner. True Bank reconciliation statement is a systematic presentation of errors made by the accountant. False Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. True Linking overhead to a cost unit is known as overhead absorption. True Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries. False Uniform costing system is defined as a system using common concepts and standard accounting practices by different entities in different industry to facilitate inter-firm comparison. True A business is an activity carried out with the intention of earning the profit. True Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages. True Maintenance Department is a service cost centre. True Balance sheet indicates the financial status of the business at given period. True
Fixed overhead variances may be calculated either on the basis of units of output or on the basis of standard hours. True Profitability statement indicates the amount of assets & liabilities. False Real Accounts may also consist the accounts of some intangible assets like Goodwill Account True The rate at which the depreciation is to be calculated are also specified in the Income Tax Act 1961. True A bill of Rs. 500 for old furniture sold to Raj, was entered in the sales day book False Abnormal cost indicates that cost which is normally incurred at a certain level of output under normal circumstances. False Indirect material cost assist the manufacturing process is an integral part of finish goods. False Material cost is the first and probably the most important element of cost. True If the organisation follows the policy of considering predetermined overhead absorption rates, it may face the problem of under or over absorption of overheads if the actual overheads to be absorbed o True Fixed cost is the cost that varies in direct proportion with the level of activity or volume of operations. False The analysis of overhead variances is different and the most complex task. True Standard costing and Marginal Costing are the best possible tools available to the management for cost control
False While calculating the minimum level, normal lead time is not necessary False To Increase the existing production capacity, additional capital expenditure is required. True Whatever is to be sold need not be produced. True Patents and Trade Marks Account is a Real Account. True Favorable variances need on investigation False Management Accounting aims at enabling the management to take the decisions about the future. It may consider future data as well as non-financial factors. True Sundry creditors transfer to asset side. False A bank reconciliation statement is prepared on a particular date. True As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. False Credit sale of Rs. 5000 to Bobby should be entered in the purchase book. False Flux method is important method of wage payment. False Fixed cost tends to vary with time rather than with level of activity. True Flexible budget is an effective tool for evaluation of performance. True
Material Mix Variance occurs where only one raw material is required False Financial statements are basically in two forms i.e. profitability statement and balance sheet. True The process of accounting split into three steams i.e. financial, cost, management accounting. True Financial Accounting discloses the financial performance & financial statements of the business as a whole. True Variable cost + Profit = Sales False P&L statement which is a period statement & relates to a certain period tells about results of operations. True Treating capital receipt as revenue income is an example of errors of commission. False For a manufacturing company, dividend received is a non-operating income. True Suspense account is closed automatically after rectification of all the errors. True Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. False Balance sheet indicates the expenditure & income from the business. False The sum of indirect material cost, indirect labour cost and indirect expenses is termed as Overheads. True
Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc. True 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. False Management Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting and cost accounting True Error of commission refer to a situation where a transaction is not recorded in the books of account. False Deferred revenue expenditure written off account is a real account. False Balance sheet is considered to be a part of the financial statements. True Malik started business by contributing cash Rs.50,000/- and his personal car worth Rs.25,000/-; thus his capital account should be credited with Rs.75,000/. True The labour cost which can be identified with the individual cost centre is known as the Direct Labour Cost. True Under time rate system a worker is paid on the basis of production achieved by him in a given time. False The variable costs are controllable at the lower lever. True Under the Rowan plan bonus is a fixed percentage. False Period cost is the cost assigned to the products. False
The sales mix variance highlights the fact that the actual mix of sales has been in the same ratio as budgeted. False Purchased computers of Rs. 50,000 come under the heading of fixed asset True Amount with drawn for personal purpose drawing A/C to be debited. True Total of purchase register for the month of March is taken 50,000 instead of 55,000. Posting to individual A/C of supplier total to correct amount is 55,000 but purchase account is debited by Rs. 50,0 True There is reverse relationship between the ordering cost and carrying cost True Where overheads chargeable to the department are Rs. 5000/- , direct labour hours worked are 24000 then labour hour rate is Re. 0.2083 labour hour. True The Budget key factor may be in the form of sales, raw material, labour etc. True Indirect labour cost indicates that labour cost which cannot be identified with the individual cost centre. True There is no need to open a suspense account if the trial balance does not agree. False Debit the receiver & credit the giver is a rule of Real a/c. False Head of the Department should sign the purchase requisition. True The situation of over absorption arises if the overheads absorbed are less than the actual overheads. False
Due to errors of principle the arithmetical accuracy of the trial balance get affected. False canteen facility to workers, health and safety services are examples of monetary incentives. False If actual cost is more than the standard cost then it is called favorable variance. False The aggregate of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. False Cost Accounting restrict itself with historical transactions False A very wide scope of Management Accounting is the limitation by itself. True In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities. True New companies can adopt Uniform costing system as a ready-made system. True Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business. False Re-order level for materials is determined considering maximum consumption and maximum delivery period. True Control on purchase of material is exercised by the storekeeper. False The best way to reduce labour cost is to recruit cheap labour. False
Under some circumstances, it may be advisable to sell at prices equal to or below the marginal cost ignoring fixed cost. True Depreciation can be defined as a permanent, continuous and gradual reduction in the book value of a fixed asset. True Semi variable expenses fluctuate in direct proportion to volume. False GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system. False It is said that the income statement represents wealth increase /decrease for the organisation. True All personal expenses of the owner should be debited to the organisation's profit and loss account. False Depreciation on assets is credited to the trading account. False An entry in the stores ledger is required for transfer of material from one job to another in the same department. False The role of the budget committee may be taken as an advisory role to the Chief Executive. True While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. False The actual hours taken by the labour are compared with the standard hours allowed for output to find out the labour yield variance. True Profit and loss account indicates the profit earned as on a particular date.
False The ideal budget period for a company engaged in generation and distribution of electricity is one year. False The purchase account should be debited when an order is placed with the supplier of material. False Factory overheads consist of all overhead costs incurred from the stage of procurement of material till the production of finished goods. True If the physical stock is less than the stock as per the stores ledger, such shortage should be treated as an issue of material. True Marginal costing is a technique of cost control. True Provision for discount on debtors account should be credited to the Profit and Loss Account. False The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc. True Absorption costing is more suitable for decision making than marginal costing False Bank charges debited in the pass book represent clerical mistake on the part of the bank employees. False Depreciation, interest and property tax continue even when the operations are discontinued. True Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors. False
Overhead absorption is an exercise by which overhead is properly spread over production for the period. True Price based on Uniform Costing may be taken to be reliable and representative of the whole industry. True The purchase budget is a forecast of the value of fixed assets requiring replacements in the budget period. False In marginal costing, decisions are guided by profit rather than contribution margin. False Match True Differential cost analysis is incorporated in the cost books. False The process of recording attendance time of the workers is known as time booking. False The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account. False Profit = Profit volume ratio X Margin of safety True Indirect material cost is an integral part of finished goods. False Margin of safety = Contribution / Profit volume ratio False Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.
True Budgetary control system provides a basis for establishment of the incentive systems. True A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity. True Credit balances in all the Personal & Real accounts appear on asset side. False A pre-determined factory overhead rate holds up product costing. False Bank reconciliation statement can be prepared on weekly basis. True Penalty paid for delay in payment to creditors represents uncontrollable cost. False While passing the journal entry, it is of utmost importance to ensure that the total of amount debited is equal to the total of the amount credited. True The bin card and stores ledger, being independent records, comparison of these two records should be avoided. False The cost of abnormal time may be recovered by inflating the hourly labour rate. True Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited. True Category C items, as per the ABC analysis, usually refers to indirect material. True All costs are controllable. False
Under ABC analysis, category A represents items with high volumes. False Marginal costing rewards sales whereas absorption costing rewards production. True Standard costs are used for external reporting. False Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet. True Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices. True Goods sent to the customers on approval basis should be treated as sales. False 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. True Long term loan borrowed from financial institution comes under the heading of long term liabilities. True Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein. False Primary distribution is effected on the basis of service rendered to the service departments by the production departments. False Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein. False Danger level for inventory of materials means the safety stock of inventory.
False Amortization of goodwill should be considered while preparing cash budget. False Time rate system is suitable for workers of the maintenance department. True Credit balance in interest account indicates income for the organization. True All personal expenses of the owner should be debited to the organization's profit and loss account. False If excess of cash is estimated in the cash budget, it may be possible to utilize it to give bonus to the employees. False In differential cost analysis, decisions are taken by comparing the incremental revenue with differential costs. True The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. False People external to the organization do not have any access to the costing records. True A cheque received from a customer but not deposited into bank must be recorded in the cash book. True Due to compensating errors the arithmetical accuracy of the trial balance get affected. False Perpectual inventory system includes continuous verification of physical stock at regular intervals. True
Per unit cost of variable overheads may reduce as the volume of output increases but the total overheads remain constant. False Machine hour rate is calculated as (amount of overheads to be absorbed)/(labour hours required for production) False To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition. False Budget is prepared for a fixed period of time. True Depreciation does not involve cash out flow True Overhead absorption rate will be different at different capacity levels. True A grinding machine is an example of impersonal cost centre True Interim dividend paid by the company should be debited to the profit and loss appropriation account. True Receipts and payments method of cash budget is useful for preparing long term estimates. False Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product. True Due to compensating errors the arithmetical accuracy of the trial balance is affected. False Amortisation of goodwill should be considered while preparing cash budget. False
The danger level fixed below maximum level False (No. of unit * Rate of depreciation per unit ) this formula is used for written down value method. False The difference between standard cost and actual cost is termed as Variance. True Wage payment system should be properly tied up with quality control procedures to ensure that the workers are paid only for good and quality production. True If the product is labour intensive, more stress may be necessary on inventory control procedure. False A good wage payment system will not punish the workers for the matters beyond the control of the workers. True Fixed assets do not give the returns during the same period during which they are paid for True Under time rate system a worker is paid on the basis of production achieved by him. False Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities. True A contractors bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account False Dividend received is a Non-operating Income. True
The ultimate incorporation of all functional budgets takes the form of budgeted Profit & Loss Account and Balance Sheet. True Piece rate system is suitable when quality of goods produced is of extreme importance. False A firm earns profit when contribution is equal to fixed costs under variable costing. False According to the standard costing principles, only adverse variance must be further investigated. False An item of cost that is direct for one business organization may be indirect for another business organization. True Time-keeping facilitates the preparation of payroll. True The amount of profit which is retained by the organization is transferred to 'Reserves and Surplus' in the balance sheet. True If the storage cost of inventory increases, then the economic order quantity also increases. False Indirect material indicates that material which can be identified with the individual cost centre False The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet. True While preparing bank reconciliation statement for the month of September 2004, one should consider the balance as per bank book as on 1st September, 2004 and the balance as per pass book as on 30th September, 2004. False
The actual loss incurred by a company, due to fire, is the extent of difference between the cost of goods destroyed and the amount of claim settled by the insurance company. True Under the accelerating premium system incentive increases at a fast rate with the decrease in output. False It is very easy to measure the portion of increased sales which is due to expenditure incurred for advertisement of the product False A cash payment of Rs. 1,000/- for travelling expenses has been entered in the books but not debited to travelling A/c. The trial balance will not agree. True Fundamentally, changes in price and changes in sales volume give rise to sales variances. True
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The components of the selling and distribution cost budget are : Distribution expenses , Publicity expenditure , Salary of sales-office workers Features of money measurement concept are . . . 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 The various areas in which uniform costing can be adopted are . . Valuation of inventories , Charging of depreciation , Apportionment of overheads Special aspects of co-partnership include: Workers are granted ownership rights , Indirect monetary remuneration , The morale of the workers is increased Pre-requisites of Uniform Costing are . . . Spirit of mutual trust , Free Exchange of ideas , No rivalry Causes for adverse material price variance are: Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges You are using petrol as one of the raw materials. Daily you purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of petrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 litres and job Z 320 litres. After these issues the drum was empty. Calculate per litre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/Features of real account are . . . Mainly deals with items which are having physical , Consists of some intangible assets , examples include - Lane, Building, Vehicles Select the correct statements. Ram's account.Dr. Rs.10,000 To Bank account Rs.10,000
Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is made by cheque Identify the causes due to which the cost of labour may be high: Excess staffing , Lack of experienced and efficient personnel , High labour turnover Identify the items which are correctly classified. Carriage inward - Factory overheads , Carriage outward - Selling and distribution overheads , Sales research expenses -Selling and distribution overheads Cash and---------------are the two systems of accounting. Mercantile P/L A/C debit side includes salary , discount allowed , postage & telegram Trading a/c credit side includes sales , goods lost by fire , closing stock Indirect Expenses includes Rent , Telephone expenses , Insurance Under stocking may have following consequences Payment for idle time to workers , Production hold ups resulting into disturbed delivery schedule , Eleventh hour purchase Goods received note or goods received report is prepared in following copies One copy to Purchase department , One copy to Accounts department , One copy to Costing department Valuation of material uses the following methods FIFO and LIFO , Average price method , Market price Limitations of marginal costing are difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Budgetory Control deals with Establishment of budgets , Comparison of budgeted results with actuals , Computation of variance.
Current standards includes Expected standards , Normal standards , Ideal standards Office & Administration overhead includes Salary , Rent & Taxes , Stationary & postage In fixed overhead variance, the volume variance is further analyzed as Variance Efficiency Variance , Capacity Variance , Calendar Variance Standard Costing may not be useful in Small concerns , Industries having non-standardized products , Contract jobs Limitations of Management Accounting includes------------------Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Business Entity Concept ______________. Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Double Entry Accounting System__________________ Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit When bank balance as per bank book is considered then following to be added. cheques issued but not presented , direct deposit by customer , wrong credits given by bank Manufacturing process involves study of Designing the product , The quantity and quality , Material used LAST IN FIRST OUT (LIFO) The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot The Bin card and stores ledges do not match due to the following reasons: Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card In Cash budget , Non operating cash inflow includes Receipt of loan/borrowings , Issue of shares , Sale of fixed assets
In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads Loan instalments , Taxes , Purchase of fixed assets. The features of multiplicity of key factors are as follows : More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique Identify the budgets for which the production manager sould be held responsible : Production budget , Production overheads budget , Plant utilisation budget The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total cost Rs.105,000/-; working capital is equal to 25% of the sales value. The company expects 25% return on capital employed. Capital employed is equal to fixed assets plus working capital. Select the correct answers: Sales Rs.128,000/- , Return on capital employed , Working capital Rs.32,000/Features of material usage variance are : Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity Features of Sunk cost are . . . Indicates historical cost , Not relevant in decision making process , Incurred in past Features of purchase requisition slip are : Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded Features of convention of consistency are . . . The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis Following are the examples of service cost centre Stores department , Transport department , Accounting department The different purposes served by standard costing technique are : Cost control , Cost awareness , Performance appraisal
A materials requisition form normally contains the following aspects: Quantity requisitioned , Per unit material cost , Job number While preparing sales budget the following factors must be considered : The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales Techniques of management accounting include: Marginal costing , Budgetary control , Standard costing Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system. Capital investment , Plant size , Location Management Accounting is Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management The selection of the supplier may depend upon the following aspects: Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier When bank balance as per bank book is considered for preparing bank reconciliation statement, then following items need to be added : Cheques issued but not presented , Direct deposit made by customer , Wrong credits given by bank If you are required to enforce uniform costing system in your industry, how would you proceed ? Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected Labour efficiency variance Rs.1,000/- (favourable); labour mix variance Rs.260/- (adverse) and labour rate variance Rs.300/- (adverse). Compute labour cost variance and labour yield variance. Labour cost variance -Rs.700/- (Favourable) , Labour yield variance Rs.1,260/- , Labour yield variance is favourable Financial Accounting is
Designed to supply information to internal/ external users , Referred as 'Historical' form of accounting , Concerned with financial factors The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considering the adjustments) is Rs.78,560/-. Select the adjustments which might brought this change. Accrued commission income of-Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account Accounting period Concept________________ Longer life-span on business is divided into shorter segments , Each one being in the form of accounting period , Selection of accounting period may depend on various factors Depreciation Amount charged on Fixed Assets. Profit & Loss A/C credit side has Gross profit , Commission received , Interested received When bank balance as per pass book is considered then following to be deducted. cheques issued but not presented , direct deposit by customer , wrong credits given by bank Store ledger Record of all receipts and issue transactions , Financial expressions of all transactions , Maintenance of Store ledges provides a second check Following points are taking into consideration for evaluation of receipts The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty In EOQ, to express carrying cost as a percentage of the unit cost of purchases this is used in the formula----------i The selection of the base on which overheads should be apportioned depend on the following principles. service or use basis , survey basis , ability to pay basis
The following factors affects the budgeted advertisement cost Percentage of profits , Availability of funds , Competitors policy Uncontrollable variances are Strike , Change in customers demand , Devaluation of currency Material Price Variance may occur due to Change in price of material , Failure to take discounts , Weak purchase organization These are the features of fixed overheads total cost remains the same , per unit cost may vary , not dependent on volume of output FIFO method The price of the earliest available lot is considered first , If the lot is exhausted, the price of the next available lot is considered , It is used for issue of material These are the methods of measuring labour turnover. Replacement Method , Separation Method , Flux Method From the following data, workout the EOQ annual demand. 5000 units, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory carrying cost15% on average inventory 300 Wage rate standards takes into consideration the following factors The system of wage payments , System for bonus payment , Grades of workers required Locate the steps involved in rectifying the errors in the books of accounts Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books The objects of cost accountancy are . . To ascertain cost and profitability , Cost Control , Presentation of Information Examples of indirect material are Consumable stores , Glue used in book binding , Nails used in packing boxes
Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital is to be provided @ 10% p.a., what will be amount of capital of each of the partners as on 31st March, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account. Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account The disadvantages of time rate system are : Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity Select the advantages of standard cost system. Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency The objectives of cost accounting are : Cost control , Ascertain ment of cost of each product , Assist in managerial decision-making From the following, select intangible assets: Goodwill , Patents , Trade Marks Items credited to Profit & Loss Account are Gross profit , Commission received , Interested received Inventory holding cost comprises of : Cost of insurance , Rent of store house , Salary of store keeper The causes of idle time can be analysed as Administrative causes , Productive causes , Economic causes Marginal costing is useful in the following areas : Plant shut down decisions , Make or buy decisions , Profit planning Which of the following budgets may be termed as a long term budget? Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company Marginal costing technique is useful in taking decisions relating to which of the following courses of action? Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision regarding temporary shutdowns
Select the items which may be classified as selling and distribution overheads. Delivery van expenses , Rent of finished goods warehouse , Sales research expenses Identify the variable expenses. Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers The factors which influence the selection of the method for absorption of overheads are: Type of industry , Nature of products , Manufacturing process Select the transactions which can be entered in the Journal proper. Opening entries , Closing entries , Rectification entries Which of the following transactions should be excluded while preparing a cost sheet ? Interest on loan , Bad debts , Expenses on criminal law suit Features of Taylor's differential piece rate system are as follows : Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. 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. The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission Select the steps to be followed while preparing bank reconciliation statement. Compare the transactions in the bank book and the pass book , Check the totals and the balancing of both the books , Confirm that the opening balances of both the books are tallying The objectives of Uniform costing system are as follows : 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 Features of convention of materiality are . . .
transactions having material impact on profitability should be considered , Insignificant transactions will be ignored Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account. Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/Locate the error and its features in the following Compensating errors , Trial balance will not be affected , Trial balance will be affected 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 Increase the selling price , Reduce cost of sales , Increase the selling efforts The principal functions of the cost accounting department are : Classifying labour cost according to jobs, processes, etc. , Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced. Items debited to Profit & Loss Account are Salary , Discount allowed , Postage & telegram Uniform costing system can be successfully implemented in any industry only when : Information is freely supplied by all the units , Well organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct The management of Horngreen Ltd. is deciding whether to continue working at loss or to temporarily shut down the factory. State the qualitative aspects that must be considered before arriving at a decision. Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory The key factor determines the : Level of activity , Capacity utilization , Level of sales
Select the examples of functional budgets: Sales budget , Production budget , Research and development budget Select the items which may be classified as administration overheads. Depreciation on office furniture , Director's remuneration , Telephone expenses These are the replacement costs of labour turnover. Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives Financial Accounting ______________ Designed to supply information for internal/ external uses. , Deals with the transaction during specific period. , It is compulsory Cost Accounting ______________. Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & present. Features of double entry accounting system are . . . Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Features of a cost sheet are as follows Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the Uniform Costing Methods may be advantageously applied to . . . Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc. 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. The gross profit will increase by Rs.6,450/In which of the following situations, the flexible budget should be preferred? Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity The advantages of Halsey plan are :
Bonus goes on increasing with increase in time saved. , Provides more incentive to speed up production , Guaranteed time rate payment is made Which of the formulae can be used to calculate profit volume ratio : Change in contribution / Change in sales , 1 - (Change in variable cost / Change in sales) , (Fixed cost + Profit) / Sales Following errors affect the trial balance Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger Accounting is the art where transactions are Summarized , Classified , Recorded The factors to be considered while preparing the direct materials budget are : Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand. 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. Contents of Uniform Cost Manual are Organization , Cost Accounting system , Presentation of information The process of accounting has three streams of accounting ---------------,-------and ----------------------. Financial Accounting , Cost Accounting , Management Accounting Marginal costing is found to be unsuccessful in the following situations :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 Labour efficiency variance arises due to: Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material The organization chart shows the following aspects :
Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers The main advantages of profit sharing are : Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost? 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 Management accounting is concerned with the following activities : Decision making , Safeguarding assets , Planning and controlling activities Select the accounts to be disclosed on the liability side of the Balance sheet. Loan , Outstanding expenses , Creditors Features of convention of conservation are :Applicable to valuation of current assets , Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realized Labour turnover means :Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Essentials for effective implementation of budgetary control system are :Commitment of top management , Clearly defined objectives , Continuous budget education Features of convention of materiality are :Transactions having material impact on profitability should be considered , Insignificant transactions will be ignored Actual costs determined on the basis of costing records maintained have following limitations :No practical utility from control point of view , No practical utility for price fixation , Expensive Select the accounts to be disclosed on the assets side of the Balance sheet :Furniture , Loan to Bank of U.S.A. , Land & building
Management Accounting is :Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management The disadvantages of supplementary overhead rates are:It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity Essentials for effective implementation of budgetary control system are Commitment of top management , Clearly defined objectives , Continous budget education Overhead capacity variance is the outcome of: Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated Which of the following information is included in the goods received note? Date of receipt of material , Quantity received , Description of goods The operating profit as per cost statement may differ from the profit as per Profit and Loss Account due to existence of Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others The advantages of written communication are Accuracy , Can be recorded , Brevity Business letters can be useful in different ways like Legal evidence , Permanent information , Recovering dues Essential parts of business letters would be Head address , Date , Outward number The Head address includes Tel no. , Name of organization The body of the letter may be divided into Opening Para , Main communication , Closing paragraph Examples of salutations would be Dear sir , Respected Sir
The matter in the memorandum may include Procedures , Rules , Instructions Features of Financial Accounting includes----------------It is a legal requirement , It protects the interest of outsiders , It considers historical transactions Non Operating Expenses includes Loss on sale of asset , Goodwill , Only a, b wise classification of overheads takes the form of indirect material , indirect labour , indirect expenses Basic three steps in Standard Costing are Setting standards , Comparing actuals with standards , Measurement of variance Following factors will have to be considered before preparing Production Budget in terms of quantity Production capacity , Co-ordination with Sales forecast , Management Policy The production budget may be prepared in terms of : Units produced , Production cost , Material cost, labour cost and overheads Limitations of Management Accounting includes------------------Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Business Entity Concept ______________. Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Double Entry Accounting System__________________ Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit When bank balance as per bank book is considered then following to be added. cheques issued but not presented , direct deposit by customer , wrong credits given by bank Manufacturing process involves study of Designing the product , The quantity and quality , Material used
LAST IN FIRST OUT (LIFO) The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot The Bin card and stores ledges do not match due to the following reasons: Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card The causes of idle time can be analysed as Administrative causes , Productive causes , economic causes Limitations of marginal costing are difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. In fixed overhead variance, the volume variance is further analyzed as Variance Efficiency Variance , Capacity Variance , Calendar Variance In Cash budget , Non operating cash inflow includes Receipt of loan/borrowings , Issue of shares , Sale of fixed assets In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads Loan instalments , Taxes , Purchase of fixed assets. The features of multiplicity of key factors are as follows : More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique Identify the budgets for which the production manager sould be held responsible : Production budget , Production overheads budget , Plant utilisation budget Features of material usage variance are : Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity Identify the causes due to which the cost of labour may be high:
Excess staffing , Lack of experienced and efficient personnel , High labour turnover Features of Sunk cost are . . . Indicates historical cost , Not relevant in decision making process , Incurred in past Features of purchase requisition slip are : Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded Features of convention of consistency are . . . The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis Following are the examples of service cost centre Stores department , Transport department , Accounting department Pre-requisites of Uniform Costing are . . . Spirit of mutual trust , Free Exchange of ideas , No rivalry You are using petrol as one of the raw materials. Daily you purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of petrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 litres and job Z 320 litres. After these issues the drum was empty. Calculate per litre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z. Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol - Rs.30/The objects of cost accountancy are . . To ascertain cost and profitability , Cost Control , Presentation of Information Management Accounting is Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management The causes of idle time can be analysed as Administrative causes , Productive causes , Economic causes
The components of the selling and distribution cost budget are : Distribution expenses , Publicity expenditure , Salary of sales-office workers Locate the error and its features in the following Compensating errors , Trial balance will not be affected , Trial balance will be affected Business Entity Concept Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Following example comes under service cost centre Store department , Internal Transport department , Accounting/Costing department When bank balance as per pass book is considered then following to be added. cheques deposited but not cleared , Interest debited by bank , bank charges debited by bank Cash and ____________ are the two systems of accounting. Mercantile Important advantages of Uniform Costing can be said to be It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units Indirect Labour Cost Wages paid to storekeeper , Salary of works manager , Wages paid to gatekeeper Labour Efficiency Standards are decided by considering following factors Records of past performance , Time & Motion Study , Trial Runs In Cash budget Operating cash inflow includes Cash Sales , Collection from Debtors , Interest/Dividend received Following are called the element of Cost Material , Labour , Expenses Convention of Materiality __________________ Only those transactions will be considered which have material impact on profitability , Insignificant transaction will be ignored , The cost of non-used should not be considered as the item of cost
Cost Accountancy is a science, art and practice of a cost Accountant. Science indicates the possession and the application of relevant systematic knowledge. , Art indicates the skill and ability. , Practice indicates continuous effects on the part of cost accountant. Money Measurement Concept__________________ Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the kind of information available from financial statements , Due to several restrictions it becomes drawback of financial accounting P/L A/C debit side includes salary , discount allowed , postage & telegram Profit & Loss A/C credit side has Gross profit , Commission received , Interested received Following errors do not affect the trial balance Error of Principle , Error of Omission , Error of Commission Factory overheads are termed as Production overheads , Works overheads , Manufacturing overheads Selling and distribution overheads includes Indirect Material such as packing material, samples etc., , Indirect labour like salaries to sales personnel manager , Indirect expenses like warehouse charges, advertisement The aims of perpetual inventory system are as follows Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock These are the preventive costs of labour turnover. cost of maintaining good relations with the workers , Cost of medical services , cost of welfare facilities These are the features of variable overheads vary directly in proportion to volume of output. , per unit cost remains the same , total overheads may increase or decrease as per volume of output. Direct Cost includes Direct material , Direct labour , Direct expenses
Locate the steps involved in rectifying the errors in the books of accounts Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Causes for adverse material price variance are: Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges The objectives of Uniform costing system are as follows : 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 These are the methods of measuring labour turnover. Replacement Method , Separation Method , Flux Method From the following, select intangible assets:Goodwill , Patents , Trade Marks Pre-requisites of Uniform Costing are :Spirit of mutual trust , Free Exchange of ideas , No rivalry The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considering the adjustments) is Rs.78,560/-. Select the adjustments which might have brought this change. Accrued commission income of Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account The objects of cost accountancy are :To ascertain cost and profitability , Cost Control , Presentation of Information The organization chart shows the following aspects :Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers The key factor determines the :Level of activity , Capacity utilization , Level of sales Cost control procedure deals with :-
Establishment of plans , Comparison of actual and planed performance , Computation of variance 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. The debit side of the trial balance will be in excess by Rs.250/- , Involves an error of principle , Involves an error of commission
S Ltd. operates a system of standard costing in respect of one of its products which is manufactured within a single cost centre. For one unit of product the standard material input is 20 litres at a standard price of Rs.2/- per litre. The standard wage rate is Rs.6/- per hour and 5 hours are allowed to produce one unit. Fixed production overhead is absorbed at the rate of 100% of direct wages cost. During the month just ended the following occurred : acutal price paid for materials purchased Rs.1.95 per litre; total direct wages cost was Rs.156,000/- and fixed production overheads was Rs.158,000/-. Direct material price variance-Rs.8,000/- (Fabourable); direct material usage variance -Rs.5,000/- (Adverse); direct labour rate variance -Rs.5,760/(Adverse); direct labour efficiency variance -Rs.2,760/- (Favourable) and fixed produciton overheads expenditure variance -Rs.8,000/-(Adverse). Calculate budgeted output in units for the month, actual hours worked and number of litres purchased during the month. Budgeted output - 5,000 units , Actual hours worked - 24,040 hours , Litres purchased - 160,000 litres Which of the following transactions should be excluded while preparing a cost sheet? Interest on loan , Bad debts , Expenses on criminal law suit Features of double entry accounting system are :Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Features of convention of conservation are . . . Anticipates all future losses and expenses , Ignores all future incomes and profits, unless they are actually realised , Applicable to valuation of current assets The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are capable of nullifying this balance.
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/From the following select the examples of errors of commission Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account Identify the fixed expenses from the following. Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor The disadvantages of supplementary overhead rates are: It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity The objectives of Uniform costing system are as follows: 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 In practical circumstances, control ledgers may be maintained for the following categories: Sundry debtors , Sundry creditors , Advance to Staff The main advantages of profit sharing are: Employees try to increase productivity , Incentives are shared by all the employees , Augments employees' efficiency These are the preventive costs of labour turnover. Cost of maintaining good relations with the workers, Cost of medical services, Cost of welfare facilities Marginal costing is found to be unsuccessful in the following situations: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 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
Increase the selling price , Reduce cost of sales , Increase the selling efforts For the given transaction find the wrong entry that has been passed in the books of accounts, the correct entry that should have been passed and the rectification entry required to rectify the mistake. "On 1st September, 2004 the total of the previous month's wages was debited to 'Manufacturing Wages Account". During the previous month, a new machine was installed, and the firm's own employees had spent time thereon; the previous month's wages for all such employees amounted to Machinery A/c. . . Dr. Rs.14,100/- To Manufacturing Wages A/c Rs.14,100/- , Machinery A/c . . . Dr. Rs.14,100/- To Cash A/c Rs.14,100/- , Rs.14,100/- To Cash A/c Rs.14,100/Management accounting is concerned with the following activities: Decision making , Safeguarding assets , Planning and controlling activities If you are required to enforce uniform costing system in your industry, how would you proceed? Collecting data from all units of your industry, Ensuring that the data collected is complete and correct, Maintaining secrecy of the data collected Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system. Capital investment , Plant size , Location The selection of the supplier may depend upon the following aspects: Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier Labour turnover means: Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Select the non-monetary incentives Health and safety services , Canteen facility , Loans at reduced rate of interest Select the correct formulae for calculating break even point. Fixed cost / (Selling price per unit - Variable cost per unit), [Fixed cost / Marginal contribution] X Sales, [Fixed cost / (Fixed cost + Net Profit)] X Sales Merits of break even point analysis are as follows: Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to graphically represent complicated data.
Identify the budgets for which the production manager sould be held responsible: Production budget , Production overheads budget , Plant utilisation budget Overhead capacity variance is the outcome of: Shortage of labour , Enforced idle time, e.g.power breakdowns , Customer demand being more or less than anticipated The factors that influence determination of budget period are: Type of budget, viz. Sales or capital expenditure budget, General economic conditions, Trade cycle of business Subsidiary books include: Cash Book, Purchase Register, Sales Register
Match The Following

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Question Dismissal of employee Increased spoilage and defectives Relationship between supervisor and worker Transport facilities to employees Match The Following Question Accounting Audit Journal Ledger Match The Following Question Advantageously applicable in similar industries Avoids cut throat competition Spirit of mutual trust Treatment given to research and development costs Match The Following Question Budget Budget committee Cash budget Purchase budget Match The Following Question Cost Centre Cost Control Differential Cost Sunk Cost Match The Following Question Abnormal overheads Administration overheads Fixed overheads Indirect Material Match The Following Question Decrease in selling price will lead to
Decrease in variable cost will lead to Increase in contribution will lead to Increase in fixed cost will lead to Match The Following Question Compensating Error Error of commission Error of Omission Error of Principle Match The Following Question Deferred revenue expenditure Deferred revenue expenditure written off Drawings Loan Match The Following Question Contribution - Fixed cost Fixed cost + Variable cost Total cost - Fixed cost Total cost + Profit Match The Following Question Cash Discount Real A/C Rs.1 Personal A/C Trade Discount Match The Following Question Daily Time sheets Time booking department Time Keeping Department Time Recording Clock Method Match The Following Question Administration budget Cash budget Materials budget Selling and distribution budget Match The Following Question Balance Sheet Manufacturing account Profit and loss account
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Trading account Match The Following

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Question Factory overheads Non operating income Selling and distribution overheads Total cost Match The Following Question Labour hour method of absorption of overheads
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Percentage of direct labour cost methods of absorption of overheads Percentage of direct material cost methods of absorption of overheads Percentage of prime cost methods of absorption of overheads Match The Following Question Dividend paid Freight inwards Freight outwards Sales Match The Following Question Purchase budget Budget committee Cash budget Budget Match The Following Question Advantageously applicable in similar industries Avoids cut throat competition Spirit of mutual trust Treatment given to research and development costs Match The Following Question Deferred revenue expenditure Deferred revenue expenditure written off Drawings Loan Match The Following Question Dividend paid Freight inwards
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Freight outwards Sales Match The Following

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Question Non-Operating income Operating income Plan for surplus/shortage of cash Plan of investment in fixed assets Match The Following Question Compensating Error Error of Principle Error of Omission Error of commission Match The Following Question Accounting Balance-sheet Book-Keeping Financial statement Profitability statement Match The Following Question Bad debts Bills Payable Bills Receivable Cash Discount Trade Discount Match The Following Question Carrying cost E.O.Q Inventory control Ordering cost Total cost Match The Following Question Assets Drawing Journal Ledger Liabilities Match The Following Question
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In tangible assets Nominal A/C Personal A/C Real A/C Tangible assets Match The Following Question Daily Time sheets Hand Written method Time Recording Clock Method Token or Disc Method Weekly Time sheets Match The Following Question Advance Application Drawing Outstanding Prepaid Match The Following Question Depreciation Discount allowed Discount received Interest on capital Outstanding expenses Match The Following Question Factory Cost Non-operating Expense Non-operating Income Selling & Distribution Total Cost Match The Following Question Danger level Fixation of inventory level Maximum level Minimum level Re-order level Match The Following Question Diemer system Differential Time rate
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Payment by Result Straight Piece rate system Time rate System Match The Following Question contribution fixed cost Fixed cost + variable cost sales- variable cost Total cost fixed cost Total cost + profit Match The Following Question Compensating Error Difference in trial balance Error of commission Error of Omission Error of Principle Match The Following Question Controllable Cost Differential Cost Opportunity Cost Sunk Cost Uncontrollable Cost
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Correct Answer Unavoidable cause of labour turnover Replacement cost of labour turnover Avoidable cause of labour turnover Preventive cost of labour turnover Correct Answer Process of analyzing & interpretation Reviewing internal control system Book of original entry Maintain all types of accounts Correct Answer Scope of uniform costing Advantage of uniform costing Requisite for uniform costing Fields covered by uniform costing Correct Answer Objective is performance evaluation Analyses the performance of different budget centres Assists in predicting shortage of cash Forecast of quantity and value of materials Correct Answer Facilitate the fixation of responsibility Process of controlling costs of operations Increase or Decrease in cost Historical Cost Correct Answer Normality wise classification Function wise classification Variability wise classification Element wise classification Correct Answer Decrease in contribution
Increase in profit volume ratio Increase in profits Increase in break even point Correct Answer Wrong classification Wrong Posting Transaction is totally omitted Trial Balance does not get affected Correct Answer Real account Nominal account Proprietor's account Personal account Correct Answer Profit Total cost Variable cost Sales Correct Answer Accounted for in the books of Accounts Debit what comes in, Credit what goes out Debit the receiver, Credit the giver Not accounted for in the books of Accounts Correct Answer Time spent by worker on job is recorded Jobwise booking of time. Recording of workers time Ticket number & clock card allotted to worker Correct Answer Salary of CEO Interest on loan Carriage inwards Cost of demand creation Correct Answer Land & Building Work in Progress Commission received
Closing stock of finished goods Correct Answer Repair for factory building Profit on sale of investment Advertisement expenses Cost of finished goods Correct Answer Not affected by output related remuneration schemes Useful when ratio of skilled and unskilled labour remains constant Useful when prices of materials are fairly stable Useful when there are no wide fluctuations in processing
Correct Answer Profit and loss appropriation account Manufacturing account Profit and loss account Trading account Correct Answer Forecast of quantity and value of materials Analyses the performance of different budget centres Assists in predicting shortage of cash Objective is performance evaluation Correct Answer Scope of uniform costing Advantage of uniform costing Requisite for uniform costing Fields covered by uniform costing Correct Answer Real account Nominal account Proprietor's account Personal account Correct Answer Profit and loss appropriation account Manufacturing account
Profit and loss account Trading account Correct Answer Issue of shares Cash Sales Cash Budget Capital Expenditure Budget Correct Answer Wrong classification Trial Balance does not get affected Transaction is totally omitted Wrong Posting Correct Answer Process of analyzing & interpretation Financial status Books of Accounts Profitability statement & Balance-sheet Indicates the amount of profit earned Correct Answer Amount not received from customer Amount payable to supplier Amount received from the customer Accounted for in the books of Accounts Not accounted for in the books of Accounts Correct Answer Cost of holding the inventory Economic Ordering Quantity Maintain the inventory of any kind Associated with administrative efforts Ordering cost + carrying cost Correct Answer All the properties owned by the business Withdrawn for personal use Book of original entry Maintain all types of Accounts All the amount owed by the business Correct Answer
Patents, Trade marks Debit all the expenses, Credit all the incomes Debit the receiver, Credit the giver Debit what comes in, Credit what goes out Building, Machinery Correct Answer Time spent by worker on job is recorded Attendance register Ticket number & clock card allotted to worker Token number & identification number allotted to worker Record of time for all the jobs during the week is made Correct Answer Not related in current year Increase in Assets Amount of personal use Amount still payable in current year Amount paid for next year Correct Answer Assets Debtors Suppliers Borrowed capital Liabilities Correct Answer Repair for factory building Dividend on shares Profit on sale of shares Advertisement Cost of finished goods Correct Answer Below minimum level Initiating proper action for movement of material The level above which actual stock should not exceed The level below which actual stock should not reduce To take the step for procurement of further lots of material Correct Answer Halsey system & Gantt System Different hourly rates are fixed for different levels of efficiency
Workers are paid according to the production achieved by him The rate of payment is fixed per piece Worker is paid on the basis of time attended by him Correct Answer profit Total cost contribution variable cost Sales Correct Answer Wrong classification Transferred to suspense account Wrong Posting The transaction is totally omitted Trial Balance does not get affected Correct Answer Increase or Decrease in cost Historical Cost Cost can be controlled Cannot be controlled Return or yield

Management Accounting Consolidated

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