Core:COSTANDMANAGEMENTACCOUNTING

MultipleChoiceQuestions.
1. Basicobjectivesofcostaccountingis__________.
A. TaxCompliance.B)FinancialAudit.C)CostAscertainment.D)ProfitAnalysis.
2. Directcostincurredcanbeidentifiedwith________.
A. EachDepartment.B)EachUnitofOutput.C)EachMonth.D)EachExecutive.
3. Overheadcostisthetotalof____________.
A. allindirectcosts.B)alldirectcosts.C)indirectanddirectcosts.D)allspecificcosts.
4. Imputedcostisa__________.
A. Notionalcost.B)Realcost.C)Normalcost.D)Variablecost.
5. Operatingcostingissuitablefor___________.
A. Joborderbusiness.B)Contractors.C)Sugarindustries.D)Serviceindustries.
6. Processcostingissuitablefor_________.
A. Hospitals.B)Oilreefingfirms.C)Transportfirms.D)Bricklayingfirms.
7. Costclassificationcanbedonein__________.
A.
Twoways.B.Threeways.C.Fourways.D.Severalways.
8.Costingreferstothetechniquesandprocessesof__________.
A. Ascertainmentofcosts.B.allocationofcosts.C.apportionofcosts.D.distributionofcosts.
9.Costaccountingwasdevelopedbecauseofthe________.
A. Limitationsofthefinancialaccounting.B.limitationsofthemanagementaccounting.C.limitationsofthe
humanresourceaccounting.D.Limitationsofthedoubleentryaccounting
10.Multiplecostingisatechniqueofusingtwoormorecostingmethodsforascertainmentofcostby.
A. Thesamefirm.B.Theseveralfirms.C.Thesameindustry.D.Theseveralindustries.
11. Wagespaidtoalabourwhowasengagedinproductionactivitiescanbetermedas.
A. Directcost.B.Indirectcost.C.Sunkcost.D.Imputedcost.
12. Thecostwhichistobeincurredevenwhenabusinessunitisclosedisa.
A. imputedcost.B.historicalcost.C.sunkcost.D.shutdowncost.
13.Classificationofcostisuseful.
A.Tofindsgrossprofit.B.tofindnetprofit.C.toidentifycosts.D.toidentifyefficiency.
14. Elementsofcostsare.
A.threetypes.B.fourtypes.C.fivetypes.D.seventypes.
15. Directexpensesarealsocalled________.
A. majorexpenses.B.chargeableexpenses.C.overheadexpenses.D.sundryexpenses.
16. Indirectmaterialusedinproductionisclassifiedas.
A. officeoverhead.B.sellingoverhead.C.distributionoverhead.D.productionoverhead.
17. Warehouserentisapartof_________.
A. primecost.B.factorycost.C.distributioncost.D.productioncost.
18. Indirectmaterialscrapisadjustedalongwith________.
A. primecost.B.factorycost.C.labourcost.D.costofgoodssold.
19. Whichoneofthefollowingisnotconsideredforpreparationofcostsheet_______.
D. Factorycost.B.Goodwillwrittenoff.C.Labourcost.D.Sellingcost.
20. Saleofdefectivesisreducedfrom_________.a.primecost.

A. primecost.B.workscost.C.costofproduction.D.costofsales.

21. Tenderisan.
A. estimationofprofit.B.estimationofcost.C.estimationofsellingprice.D.estimationofunits.
22. Costofsalesplusprofitis__________.
A.sellingprice.B.valueoffinishedproduct.C.valueofgoodsproduced.D.valueofstocks.
23.Primecostincludes.
A. directmaterials,directwagesandindirectexpenses.
B. indirectmaterialsandindirectlabourandindirectexpenses.
C.directmaterials,directwagesanddirectexpenses.
D. direct materials, indirect wages and indirect
expenses.
24. Totalofalldirectcostsistermedas_______.
A.primecost.B.workscost.C.costofsales.D.costofproduction.
25. Depreciationofplantandmachineryisapartof___________.
A. Factoryoverhead.B.sellingoverhead.C.distributionoverhead.D.Administrationoverhead.
26. Auditfessisapartof.
A. Worksoncost.B.Sellingoverhead.C.Distributionoverhead.D.Administrationoverhead.
28. Countinghousesalaryispartof_____.
A. factoryoverhead.B.sellingoverhead.C.distributionoverhead.D.administrationoverhead.
29. Factoryoverheadcanbechargedonthebasisof__________.
A.materialcost.B.labourcost.C.primecost.D.directexpenses.
29. Officeandadministrativeexpensescanbechargedonthebasisof______.
A. materialcost.B.labourcost.C.primecost.D.factorycost.
30. Sellinganddistributionexpensescanbechargedonthebasisof__________.
A. materialcost.B.labourcost.C.primecost.D.factorycost.
31. Oneofthemostimportanttoolsincostplanningis_______.
A. directcost.B.budget.C.costsheet.D.marginalcosting.
32. Thepurposeoffinancialaccountingistoprovideinformationfor_____.
A. fixingprices.B.controllingcost.C.locatingfactorsleadingtowastagesandlosses.
D.assessingtheprofitabilityandfinancialpositionofthefirm.
33. Anexampleofvariablecostis__________.
B. propertytax.B.interestoncapital.C.directmaterialcost.D.depreciationofmachinery.
34. Costaccountingconceptsincludeallthefollowingexempt________.
A. planning.B.controlling.C.profitsharing.D.productcosting.
35. Toymanufacturingindustryshoulduse___________.
A. unitcosting.B.processcosting.C.batchcosting.D.multiplecosting.
36. Jobcostingusedin____.
A. papermills.B.chemicalworks.C.printingworks.D.textilemill.
37. Whenpremisesareowned,achargeforrentis_________.
A. productioncost.B.imputedcost.C.marginalcost.D.costofsales.
38. Adocumentwhichprovidesforthedetailedcostcentreandcostunitis______.
A. tender.B.costsheet.C.invoice.D.profitstatement.
39.Costunitofasugarindustrycanbe_______.
B. perlitre.B.pertonne.C.peracre.D.permetre.

40.Theascertainmentofcostsaftertheyhavebeenincurredisknownas_____.
A. marginalcosting.B.historicalcosting.C.sunkcost.D.notionalcost.
41. Directmaterialisa_________.
A. fixedcost.B.variablecost.C.semivariablecost.D.semifixedcost.
42. Directmaterialisa______.
A.manufacturingcost.B.administrativecost.C.sellingcost.D.distributioncost.
43. Themostimportantelementofcostinmanufacturingindustriesis__________.
A. material.B.labour.C.directcosts.D.indirectcosts.
44. Whichofthefollowingisconsideredtobethenormallossofmaterial__________.
A. Lossduetoaccident.B.Pilferage.C.Lossduetobreakingthebulk.
D.Lossduetocarelesshandlingofmaterials.
45. Accordingtowhichmethodofpricingissuesisclosetocurrenteconomicvalues___.
A. LastInFirstOut.B.FirstInFirstOut.C.HighestInFirstOut.D.weightedaverageprice.
46. Continuousstocktakingisapartof__________.
A. annualstocktaking.B.perpetualinventory.C.ABCanalysis.D.VEDanalysis.
47.Whichofthefollowingmethodsofstockcontrolaimsatconcentratingeffortsonselecteditemsof
material______.
A.Perpetualinventorysystem.B.Materialturnoverratio.C.Levelsetting.D.ABCanalysis.
48. Inwhichofthefollowingmethodsissuesofmaterialsarepricedatapredeterminedrate________.
A. Inflatedpricemethod.B.Standardpricemethod.C.Replacementpricemethod.
D.Specificpricemethod.
49.Inwhichofthefollowingmethodsissuesofmaterialsarepricedatthepriceprevailingatthetimeof
issue___________.
A. Inflatedpricemethod.B.Standardpricemethod.C.Replacementpricemethod.
D.Specificpricemethod.
50. Inbasestockmethodofpricingthematerialissues,thetermbasestockrepresentsthequantityof
stockbeingissued__________.
A. stockinbalance.B.minimumstock.C.maximumstock.D.reorderlevel
51.Theratioswhichreflectmanagerialefficiencyinhandlingtheassetsis________.
A. turnoverratios.B.profitabilityratios.C.shorttermsolvencyratio.D.longtermsolvencyratio.
52. Theratioswhichrevealthefinalresultofthemanagerialpoliciesandperformanceis_____________.
A. turnoverratios.B.profitabilityratios.C.shorttermsolvencyratio.D.longtermsolvencyratio.
53. Returnoninvestmentisa_____________.
A. turnoverratios.B.shorttermsolvencyratio.C.profitabilityratios.D.longtermsolvencyratio.
55. Netprofitratioisa___________.
A. turnoverratio.B.longtermsolvencyratio.C.shorttermsolvencyratio.D.profitabilityratio.
55. Stockturnoverratioisa__________.
A.turnoverratio.B.profitabilityratio.C.shorttermsolvencyratio.D.longtermsolvencyratio.
56. Currentratioisa_________.
A. shorttermsolvencyratio.B.longtermsolvencyratio.C.profitabilityratio.D.turnoverratio.
57. Proprietaryratioisa___________.
A. shorttermsolvencyratio.B.longtermsolvencyratio.C.profitabilityratio.D.turnoverratio.
58. Fixedassetsratioisa__________.
A. shorttermsolvencyratio.B.longtermsolvencyratio.C.profitabilityratio.D.turnoverratio.
59. Fixedassetsturnoverratioisa______.

A. shorttermsolvencyratio.B.longtermsolvencyratio.C.profitabilityratio.D.turnoverratio.

60.Theratiowhichmeasurestheprofitinrelationtocapitalemployedisknownas_______________.
A.returnoninvestment.B.grossprofitratio.C.operatingratio.D.operatingprofitratio.
61. Theratiowhichdeterminestheprofitabilityfromtheshareholderspointofviewis____.
A. returnoninvestment.B.grossprofitratio.C.returnonshareholdersfunds.D.operatingprofitratio.
62. Returnonequityisalsocalled___________.
A. returnoninvestment.B.grossprofitratio.C.returnonshareholdersfunds.D.returnonnetworth.
63. Preliminaryexpensesisanexampleof___________.
A. fixedassets.B.currentassets.C.fictitiousassets.D.currentliabilities.
64. Prepaidexpensesisanexampleof_______.
A. fixedassets.B.currentassets.C.fictitiousassets.D.currentliabilities.
65. Theratiowhichiscalculatedtomeasuretheproductivityoftotalassetsis_________.
A.returnonequity.B.returnonshareholdersfunds.C.returnontotalassets.D.Noneofthese.
66.Theratiowhichshowstheproportionofprofitsretainedinthebusinessoutofthecurrentyearsprofits
is_________.
A. retainedearningsratio.Bpay.outratio.C.earningspershare.D.priceearningsratio.
67.Theratiowhichindicatesearningspersharereflectedbythemarketpriceis______.
A. retainedearningsratio.B.payoutratio.C.earningspershare.D.priceearningsratio.
68. Theratioestablishestherelationshipbetweenprofitbeforeinterestandtaxandfixedinterestchargesis
________.
A. interestcoverratio.B.fixeddividendcoverratio.C.debtservicecoverageratio.D.dividendyieldratio.
69.Theratioshowsthepreferencedividendasaproportionofprofitavailableforshareholdersis
__________.
A. interestcoverratio.B.fixeddividendcoverratio.C.debtservicecoverageratio.D.dividendyieldratio.
70. Thedividendisrelatedtothemarketvalueofsharesin_________.
A. interestcoverratio.B.fixeddividendcoverratio.C.debtservicecoverageratio.
D.dividendyieldratio.
71. Turnoverratioisalsoknownas______________.
A. activityratios.B.solvencyratios.C.liquidityratios.D.profitabilityratios.
72.Inventoryorstockturnoverratioisalsocalled__________.
A. stockvelocityratio.B.debtorsvelocityratio.C.creditorsvelocityratio.
D.workingcapitalturnoverratio.
73. Whichratioiscalculatedtoascertaintheefficiencyofinventorymanagementintermsofcapital
investment__________.
A.stockvelocityratio.B.debtorsvelocityratio.C.creditorsvelocityratio.
D.workingcapitalturnoverratio.
74. Theratiowhichmeasurestherelationshipbetweenthecostofgoodssoldandtheamountofaverage
inventoryis__________.
A. stockturnoverratio.B.debtorsvelocityratio.C.creditorsvelocityratio.D.workingcapitalturnoverratio.
75. SalesGrossProfit=_________.
A. netprofit.B.costofproduction.C.administrativeexpenses.D.costofgoodssold.
76. Openingstock+purchases+directexpensesclosingstock=__________.
A. netprofit.B.costofproduction.C.administrativeexpenses.D.costofgoodssold.
77. Whichratiomeasuresthenumberoftimesthereceivablesarerotatedinayearintermsofsales
_________.

A. stockturnoverratio.B.debtorsturnoverratio.C.creditorsvelocityratio.D.workingcapitalturnoverratio.

78. Debtorsturnoverratioisalsocalled_______.
A. stockturnoverratio.B.debtorsvelocityratio.C.creditorsvelocityratio.D.workingcapitalturnoverratio
79. Creditorsturnoverratioisalsocalled________________.
A. stockturnoverratio.B.debtorsvelocityratio.C.accountspayablesratio.D.workingcapitalturnoverratio.
80. Theindicatesthenumberoftimesthepayablesrotateinayearis______.
A. stockturnoverratio.B.stockturnoverratio.C.creditorsvelocityratio.D.workingcapitalturnoverratio.
81. Currentassetscurrentliabilities=___________.
A. fixedcapital.B.workingcapital.C.openingcapital.D.closingcapital.
82. Theratioofcurrentassetstocurrentliabilitiesiscalled__________.
A. liquidratio.B.acidtestratio.C.currentratio.D.cashpositionratio.
83. Internationallyacceptedcurrentratiois___________.
A. 1:1.B.2:1.C.3:1.D.4:1.
84. Liquidratioisalsocalled__________.
A. superquickratio.B.acidtestratio.C.currentratio.D.cashpositionratio.
85. Currentassets(stock+prepaidexpenses=_____________.
A. currentassets.B.fixedassets.C.liquidassets.D.fictitiousassets.
86. Anidealliquidratiois_____________.
A. 0.25:1.B.0.50:1.C.0.75:1.D.1:1.
87. Anidealcashpositionratiois___________.
A. 0.25:1.B.0.50:1.C.0.75:1.D.1:1.
88. Anidealdebtequityratiois____________.
A. 1.B.2.C.3.D.4.
89. Theratioestablishestherelationshipbetweenfixedassetsandlongtermsfundsis______.
A. currentratio.B.fixedassetsratio.C.fixedassetsturnoverratio.D.debtequityratio.
90.Theratiocomparestheshareholdersfundsandtotaltangibleassetsis___________.
A. capitalgearingratio.B.fixedassetsturnoverratio.C.proprietaryratio.D.debtequityratio.
91. Theratioexpressestherelationshipbetweentheproprietorsfundsandthetotaltangibleassetsis
___________.
A. capitalgearingratio.B.fixedassetsturnoverratio.C.proprietaryratio.D.debtequityratio.
92.Theratioestablishesrelationshipbetweenfixedinterestanddividendbearingfundsandequity
shareholdersfundsis__________.
A. capitalgearingratio.B.fixedassetsturnoverratio.C.proprietaryratio.D.debtequityratio.
93. Capitalgearingratioisalsoknownas____.
A.leverageratio.B.fixedassetsturnoverratio.C.proprietaryratio.D.debtequityratio.
94. Alowcapitalgearingratioindicates___________.
A. undercapitalization.B.overcapitalization.C.borrowedcapital.D.longtermfunds.
95. Ahighcapitalgearingratioindicates_____________.
A. undercapitalization.B.overcapitalization.C.borrowedcapital.D.longtermfunds.
96. Shareholdersfunds+Longtermloans=__________.
A. currentassets.B.currentliabilities.C.fixedassets.D.capitalemployed.
97. Lowturnoverofstockratioindicates_________.
A. solvencyposition.B.monopolysituation.C.overinvestmentininventory.D.liquidityposition.
98. Netcapitalemployedisequalto_______.

A. totalassetsminustotalliabilities.B.fixedassetsplusnetworkingcapital.

C.totalassetsminuslongtermliabilities.D.totalassets.
99. Returnoninvestmentsisa________.
A. profitandlossaccountratio.B.balancesheetratio.C.combinedratio.D.turnoverratio.
100. Ratioofnetprofitbeforeinterestandtaxtosalesis__________.
A.solvencyratioB.capitalgearing.C.turnoverratio.D.operatingprofitratio.
101. Fundsflowstatementisbasedonthe_________.
A. workingcapitalconceptoffunds.B.cashconceptoffunds.C.fixedassetsconceptoffunds.
D. Longtermfunds.
102. Allthoseassetswhichareconvertedintocashinthenormalcourseofbusinesswithinoneyearare
knownas__________.
A. Fixedassets.B.Currentassets.C.Fictitiousassets.D.Wastingassets.
103.Allthoseliabilitieswhicharepayableincashinthenormalcourseofbusinesswithinaperiodofone
yeararecalled___________.
A. longtermliabilities.B.overdraft.C.shorttermloans.D.currentliabilities.
104. AnytransactionbetweenacurrentaccountandanothercurrentaccountdoesnotAffect_________.
A. profit.B.funds.C.workingcapital.D.capital.
105. Anytransactionbetweenanoncurrentaccountandanothernoncurrentaccountdoesnotaffect.
A. profit.B.funds.C.workingcapital.D.capital.
106. PrincipleforpreparationofworkingcapitalstatementIncreaseincurrentasset________.
A. increasesworkingcapital.B.decreasesworkingcapital.C.decreasefixedcapital.
D.increasefixedcapital.
107.PrincipleforpreparationofworkingcapitalstatementDecreaseincurrentasset______.
A. increasesworkingcapital.B.decreasesworkingcapital.C.decreasefixedcapital.
increasefixedcapital.
108. PrincipleforpreparationofworkingcapitalstatementIncreaseincurrentliability__________.
A. increasesworkingcapital.B.decreasesworkingcapital.C.decreasefixedcapital.D.increasefixedcapital.
109. PrincipleforpreparationofworkingcapitalstatementDecreaseincurrentLiability____________.
A. increasesworkingcapital.B.decreasesworkingcapital.C.decreasefixedcapital.D.increasefixedcapital.
110. Depreciationonfixedassetsis__________.
A. nonoperatingincomeB.operatingexpense.C.operatingincome.D.nonoperatingexpense.
111. ProvisionforIncometaxis________.
A. nonoperatingincome.B.operatingexpense.C.operatingincome.D.appropriationofprofits.
112. Profitonsaleoffixedassetsis_______.
A. nontradingincome.B.operatingincome.C.nontradinggains.D.longtermgain.
113. Purchaseofmachinery,debitthe__________.
A. purchasesaccount.B.machineryaccount.C.cashaccount.D.bankaccount.
114. Purchaseofgoods,debitthe__________.
A. purchasesaccount.B.machineryaccount.C.cashaccount.D.bankaccount.
115. Purchasedfurniturereturnedtosupplier,creditthe________.
A. supplieraccount.B.cashaccount.C.purchasereturnsaccount.D.furnitureaccount.
116. Goodsreturnedtothesupplier,creditthe_______.
A. supplieraccount.B.cashaccount.C.purchasereturnsaccount.D.furnitureaccount.
117. Goodswithdrawnbytheproprietorforpersonaluse,debitthe__________.

A. proprietorsaccount.B.drawingsaccount.C.goodsaccount.D.purchasesaccount.

118. Trialbalanceisa__________.
A. statement.B.account.C.ledger.D.journal.
119. Balancesheetisa________.
A. account.B.ledger.C.journal.D.statement.
120. Inbalancesheetgrossprofitwillbeaddedwith__________.
D. reserves.B.capital.C.currentliabilities.D.Currentassets.
121. InP&Laccount,expenseswillbe__________.
A. debited.B.credited.C.deducted.D.added.
122. InP&Laccount,incomeswillbe____________.
A. debited.B.credited.C.deducted.D.added.
123. Thebasicfunctionofaccountingisto___________.
A. attainnoneconomicgoals.B.recordeconomicdata.C.classifyandrecordbusinesstransactions.
D.prepareprofitandloss.
124.Financialaccountingrecordonly_____________.
A. standardfigures.B.estimatedfigures.C.actualfigures.D.approximatefigures.ANSWER:C
125. Thebranchofaccountingwhichprimarilydealswithprocessingandpresentingaccountingdatafor
internaluseinaconcernis____________.
A. inflationaccounting.B.costaccounting.C.financialaccounting.D.managementaccounting.
126. Thetermmanagementaccountancywasfirstusedin__________.
A. 1950.B.1939.C.1910.D.1947.
127.Managementaccountingisalsoknownas________.
A.pricelevelaccounting.B.historicalcostaccounting.C.financialaccounting.D.decisionaccounting.
128.Theprimefunctionofmanagementaccountingisto_______.
A. assisttaxauthorities.B.assistthemanagementinperformingitsfunctionseffectively.
C.interpretthefinancialdata.D.recordbusinesstransactions.
129. Managementaccountingprovidesvaluableservicestomanagementinperforming____.
A. coordinatingfunctions.B.controllingfunctions.C.planningfunctions.D.allmanagerialfunctions.
130. Managementaccountingisanoffshootof_____.
A. financialaccounting.B.costaccounting.C.costaccountingandinflationaccounting.D.costaccounting
andfinancialaccounting.
131. Managementaccountinganalysesaccountingdatawiththehelpof______.
A. auditors.B.statutoryforms.C.toolsandtechniques.D.formula.
132. Managementaccountingissuitablefor_______.
A. largeindustriesandtradingconcerns.B.cooperativesocieties.C.smallbusinesses.
D.Nonprofitorganizations.
133. Managementaccountingandcostaccountingfunctionsare_________.
A. neutralineffect.B.complementaryinnature.C.contradictoryinnature.D.doesnotrelatetoeachother.
134.Managementaccountinguse_____________.
A. quantitativedataonly.B.qualitativedataonly.C.descriptivedataonly.D.bothqualitativeandqualitative
data.
135. Inmakingmanagerialdecisions,relevantinformationis______.
A. futurecostthatdifferbetweenalternatives.B.futurecoststhatdonotdifferbetweenalternatives.
C.pastcoststhatdifferbetweenalternatives.D.pastcoststhatdonotdifferbetweenalternatives.
136. Theroleofhistoricaldatafromtheaccountingsysteminmakingmanagerialdecisionsis________.

A.toassistinmakingproductionsthatinputstoadecisionmodel.
B.toservedirectlyasinputsindecisionmodels.
C.toassistinmakingpredictionsaboutotherinformationneededformakingdecisions.
D.toassistinmakingproductionsthatinputstoamanagement.
137. Thetracingorreassigningofcoststooneormorecostobjectivesisreferredtoas______.
A. costallocationB.historicalcostingC.stepupcostingD.costapportionment
138. Thethreemaincategoriesofmanufacturingcostsare_______________
A.directmaterials,directlaborandfactoryoverheads.
B.directlabor,indirectlaborandovertimepremiums.
C.rawmaterials,workinprogressandfinishedgoods
D.rawmaterials,directlaborandfinishedgoods.
139. Accordingtoeconomictheory,costsplayaroleinpricedeterminationwhen______.
A.thecompanyoperatesinanindustrycharacterizedashavingimperfectcompetition.
B. acompanyissellingcommoditiessuchaswheatandrice.
C. perfectcompetitionexists.
D. acompanyissellingcommoditiessuchasyarnandcotton.
140. When a multi product plant is being operated at capacity, the products which should be
emphasizedarethosethatprovide_________.
A.thehighestcontributionmarginperunitofthelimitedresource.
B.thehighestcontributionmarginperunitofproduct.
C.thehighestcontributionmarginpersalesdollar.
D.thehighestcontributionmarginratio.
141.Incashflowstatement,closingbalanceofcashbalanceispostedinwhichsideofthestatement
_____.
A. sourcesofcash.B.applicationofcash.C.sourcesoffunds.D.applicationoffunds.
142. Incashflowstatement,closingbalancesofbankbalanceispostedinwhichsideofthestatement
__________.
A. sourcesofcash.B.applicationofcash.C.sourcesoffunds.D.applicationoffunds.
143. Incashflowstatement,issueofsharesispostedin______.
A. sourcesofcash.B.applicationofcash.C.sourcesoffunds.D.applicationoffunds.
144. Incashflowstatement,issueofdebenturesispostedin______.
A. applicationofcash.B.sourcesoffunds.C.applicationoffunds.D.sourcesofcash.
145. Incashflowstatement,saleoffixedassetsispostedin____.
A. sourcesofcash.B.applicationofcash.C.sourcesoffunds.D.applicationoffunds.
146. Incashflowstatement,saleofinvestmentsispostedin___________.
A. sourcesofcash.B.applicationofcash.C.sourcesoffunds.D.applicationoffunds.
147. Incashflowstatement,redemptionofdebenturesispostedin___________.
C. sourcesofcash.B.applicationofcash.C.sourcesoffunds.D.applicationoffunds.
148. Incashflowstatement,redemptionofpreferencesharesispostedin__________.
A. sourcesofcash.B.applicationofcash.C.sourcesoffunds.D.applicationoffunds.
149. Incashflowstatement,loansrepaidispostedin___________.
A. sourcesoffunds.B.applicationoffunds.C.applicationofcash.D.sourcesofcash.
150. Incashflowstatement,taxpaidispostedin_________.
A. sourcesoffunds.B.applicationoffunds.C.applicationofcash.D.sourcesofcash.

151.Productioncostundermarginalcostingincludes_____________.
A. primecostonly.B.primecostandfixedoverhead.C.primecostandvariableoverhead.D.primecost,

variableoverheadandfixedoverhead.
152. Oneoftheprimarydifferencesbetweenmarginalcostingandabsorptioncostingregarding
thetreatmentof__________.
A. primecost.B.fixedoverheads.C.variableoverheadsD.directmaterials.
153. Absorptioncostingdiffersfrommarginalcostingisthe___________.
A.factthatstandardcostscanbeusedwithabsorptioncostingbutnotwithmarginalcosting.
B.amountofcostsassignedtoindividualunitsofproducts.
C.kindofactivitiesforwhicheachcanbeused.D.amountoffixedcoststhatwillbeincurred.
154.Contributionmarginisalsoknownas__________.
A. marginalincome.B.grossprofit.C.netprofit.D.netloss.
155. Periodcostsare_______.
A. overheadcosts.B.primecost.C.variablecost.D.fixedcosts.
156. Contributionmarginisequalto__________.
A. fixedcostloss.B.profit+variablecost.C.fixedcostprofit.D.salesprofit.
157. ProfitvolumeRatioisanindicatorof__________.
A. therateatwhichgoodsaresold.B.thevolumeofsales.C.thevolumeofprofit.D.therateofprofit.
158. MarginofSafetyisthedifferencebetween_______.
A. plannedsalesandplannedprofit.B.actualsalesandbreakevensales.C.plannedsalesandactualsales.
D.plannedsalesandplannedexpenses.
159. Anincreaseinvariablecosts___________.
A. increasesp/vratio.B.increasestheprofit.C.reducescontribution.D.increasemarginofsafety.
160. Anincreaseinsellingprice_________.
A. increasesthebreakevenpoint.B.decreasesthebreakevenpoint.C.doesnotaffectthebreakevenpoint.
D.optimizethebreakevenpoint.
161. AlargeMarginofSafetyindicates________.
A. overproduction.B.overcapitalization.C.thesoundnessofthebusiness.D.undercapitalization.
162. Angieofincidenceis_________.
A.theanglebetweenthesaleslineandthetotalcostline.
B.theanglebetweenthesaleslineandtheyaxis.
C.theanglebetweenthesaleslineandthexaxis.
D.theanglebetweenthesaleslineandthetotalprofitline.
163. CVPanalysisismostimportantforthedeterminationof______.
A.salesrevenuenecessarytoequalfixedcosts.
B.relationshipbetweenrevenuesandcostsatvariouslevelsofoperations.
C.variablerevenuesnecessarytoequalfixedcosts.
D.volumeofoperationsnecessarytoBreakeven.
164.TheconventionalBreakevenanalysisdoesnotassumethat___________.
A. sellingpriceperunitwillremainfixed.B.totalfixedcostsremainthesame.C.variablecostperunitwill

varyD.productivityperworkerwillremainunchanged.
165. 1ffixedcostsdecreasewhilevariablecostperunitremainsconstant,thenewB.E.Pinrelationto
theoldB.E.Pwillbe_______.
A. lower.B.higher.C.unchanged.D.indeterminate.

166.Iffixedcostsdecreasewhilethevariablecostperunitremainsconstant,thenewcontributionmargin
inrelationtotheoldcontributionmarginwillbe________.
A. lower.B.unchanged.C.higher.D.indeterminate.
167. SellingpriceperunitRs.10;VariablecostRs.8perunit;FixedcostRs.20,000;Break
evenproductioninunits__________.
A.10,000.B.16,300.C.2,000.D.2,500.
168. SalesRs.25,000;VariablecostRs.8,000;FixedcostRs.5,000;Breakevensalesinvalue_________.
A. Rs.7,936.B.Rs.7,353.C.Rs.8,333.D.Rs.9,090.
169.FixedcostRs.80,000;VariablecostRs.2perunit;Sellingprice_Rs.10perunit;turnoverrequired
foraprofittargetofRs.60,000_____.
A. Rs.1,75,000.B.Rs.1,17,400.C.Rs.1.57,000.D.Rs.1,86,667.
170. SalesRs.25,000;VariablecostRs.15,000;FixedcostRs.4,000;P/VRatiois_______.
A. 40%.B.80%.C.15%.D.30%.
171.SalesRs.50,000;VariablecostRs.30,000;NetprofitRs.6,000;fixedcostis______.
A. Rs.10,000.B.Rs.l4,000.C.Rs.12,000.D.Rs.8,000.
172. ActualsalesRs.4,00,000;BreakevensalesRs.2,50,000;MarginofSafetyinpercentageis
________.
A. 33.33%.B.66.67%.C.37.5%.D.76.33%.
173. P/VRatio50%;VariablecostoftheproduceRs.25;Sellingpriceis______.
A. Rs.50.B.Rs.40.C.Rs.30.D.Rs.55.
174. FixedcostRs.2,00,000;SalesRs.8,00,000;P/VRatio30%;theamountof'profitis_____________.
A. Rs.50,000.B.Rs.40,000.C.Rs.35,000.D.Rs.45,000
175. ProfitVolumeRatiois25%andMarginofSafetyisRs;3,00,000,theamountofprofitis_____.
A. Rs.1,00,000.B.Rs.80,000.C.Rs.75,000.D.Rs.60,000.
176.TotalsalesRs.20,00,000;FixedexpensesRs.4,00,000;P/VRatio40%;Breakevencapacity
inpercentageis_____.
A. 40%.B.60%.C.50%.D.45%.
177. Breakevenpointoccursat40%of`totalcapacity,marginofsafetywillbe_______.
A. 40%.B.60%.C.80%.D.85%
178. IftheP/VRatioofaproductis30%andsellingpriceisRs.25perunit,themarginalcostofthe
productwouldbe__________.
A. Rs17.5.B.Rs.16.C.Rs.15.D.Rs.20.
179. Absorptioncostingisalsoknownas____________.
A. historicalcosting.B.realcosting.C.marginalcosting.D.realcosting.
180. Undermarginalcostingstockarevaluedat__________.
D. fixedcost.B.semivariablecost.C.variablecost.D.Marketprice.
181. Absorptioncostinglaysemphasison__________.
A. production.B.sales.C.marketing.D.advertising.
182. Marginalcostinglaysemphasison_________.
A. production.B.sales.C.marketing.D.advertising.
183. Sellingpricemarginalcost=________.
A. fixedcost.B.semivariablecost.C.contribution.D.breakevenpoint.
184. Totalsalestotalvariablecost_______.
A. fixedcost.B.semivariablecost.C.contribution.D.breakevenpoint.
185. Fixedcost+profit=________.

A. fixedcost.B.semivariablecost.C.marginofsafety.D.contribution.

186. AhighP/Vratioindicates__________.
A. highprofitability.B.lowprofitability.C.highloss.D.breakeven.
187. AlowP/Vratioindicates_____________.
C. highprofitability.B.lowprofitability.C.Highloss.D.breakeven.
188. Fixedcost/P/Vratio=__________.
A. breakevenpoint.B.marginofsafety.C.contribution.D.variablecost.
189. Profit/P/Vratio=__________.
A. breakevenpoint.B.marginofsafetyC.contribution.D.variablecost.
190. SalesxP/Vratiofixedcost=_______.
A. breakevenpoint.B.marginofsafety.C.profit/loss.D.variablecost.
191. Officerentisanexampleof_______.
A. fixedcost.B.variablecost.C.semivariablecost.D.directcost.
192. Rawmaterialisanexampleof__________.
A. fixedcost.B.variablecost.C.semivariablecost.D.directcost.
193. Depreciationisanexampleof_______________.
A. fixedcost.B.variablecost.C.semivariablecost.D.directcost.
194.Marginalcostingisatechniqueof_______________.A.costreduction.B.costcontrol.
C.budgeting.D.standardcosting.
195. ThecostswhichincreaseordecreaseinproportiontotheoutputandsalesareknownAs______.
A. fixedcost.B.variablecost.C.semivariablecost.D.totalcost.
196. Breakevenpointisalsocalled_____________.
A. noprofit,nolosspoint.B.profitzone.C.losszone.D.profitandlosszone.
197. Breakevenchartisagraphicalrepresentationof_______.
A. absorptioncosting.B.marginalcosting.C.fullcosting.D.contractcosting.
198. Keyfactorinmarginalcostingisalsocalled_________.
A. noncostfactor.B.costfactor.C.salesfactor.D.limitingfactor.
199. Contributionfixedcost=___________.
A. sales.B.variablecost.C.profit.D.fixedcost.
200. BreakevensalesxP/Vratio=___________.
A. variablecost.B.fixedcost.C.semivariablecost.D.contribution.
201.Thebudgetisa______________.
A. apostmortemanalysis.B.asubstituteofmanagement.C.anaidtomanagement.D.calculation.
202.Oneofthemostimportanttoolsofcostplanningis_________.
A. budget.B.directcost.C.unitcost.D.costsheet.
203. Salesbudgetisa_________.
A.Functionalbudget.B.Expenditurebudget.C.Masterbudget.D.Flexiblebudget.
204. Thebudgetwhichusuallytakestheformofbudgetedprofitandlossaccountandbalance
sheetisknownas___________.
A. Flexiblebudget.B.Masterbudget.C.Cashbudget.D.Purchasebudget.
205.Whichofthefollowingisusuallyalongtermbudget_______.
A. Fixedbudget.B.Cashbudget.C.Salesbudget.D.Capitalexpenditurebudget.
206. Thefixedvariablecostclassificationhas`aspecialsignificanceinthepreparationof________.

A. Capitalbudget.B.Cashbudget.C.Masterbudget.D.Flexiblebudget.

207. Thebudget,whichispreparedfirstofallis.________.
A. Masterbudget.B.Cashbudget.C.Budgetforkeyfactor.D.Flexiblebudget.
208.Preparingbudgetfiguresfordifferentlevelsofactivitywithinarangeunderflexiblebudgetingis
_______.
A. Formulamethod. B. Multiactivity method. C.Budgetcostallowancemethod. D.Proportionate
method.
209. Whattypeofbudgetisdesignedtotakeintoaccountforecastchangeincosts,prices,etc________.
A. Masterbudget.B.Rollingbudget.C.Flexiblebudget.D.Functionalbudget.
210. Operationbudgetsnormallycoveraperiodof_____.
A. onetotenyears.B.onetotwoyears.C.onetofiveyears.D.oneyearorless.
211. Theentireprocessofpreparingthebudgetsisknownas_______.
A. Planning.B.Organizing.C.Budgeting.D.Controlling.
212. Budgetarycontrolstartswith________________.
A. Planning.B.Organizing.C.Budgeting.D.Controlling.
213.Budgetarycontrolendswith____________.
A. Planning.B.Organizing.C.Budgeting.D.Control.
214. Budgetdesignedtoremainconstantirrespectiveofthelevelofactivityattainediscalled_________.
A. Fixedbudget.B.Flexiblebudget.C.Salesbudget.D.Productionbudget.
215.Longtermbudgetsarepreparedfor_______________.
A. 1year.B.13years.C.15years.D.510years.
216. Thebudgetwhichshowsthebudgetedquantityofoutputtobeproducedduringaspecificperiodis
__________.
A. Fixedbudget.B.Flexiblebudget.C.Salesbudget.D.Productionbudget
217. Materialconsumptionbudgetispreparedonthebasisof______________.
A. Productionbudget.B.Salesbudget.C.Fixedbudget.D.Flexiblebudget.
218..Materialbudgetconsistsoftwoparts,oneistheconsumptionbudgetandanotherIs________.
A. Material purchase budget. B. Material sales budget. C. Material production budget. D. Material
budget.
219. Materialspurchasebudgetispreparedonthebasisof_________.
A. Materialsalesbudget. B.Materialconsumptionbudget. C.Materialproductionbudget.D.Material
budget.
220. Labourbudgetisapartof____________.
A. Fixedbudget.B.Salesbudget.C.Productionbudget.D.Flexiblebudget.
221. Labourbudgetispreparedby________________.
A..Personneldepartment.B.Salesdepartment.C.Purchasedepartment.D.Accountsdepartment.
222. Budgetofindirectcostsintheformofindirectwages,indirectmaterialandindirectexpensesin
thefactoryis_________.
A. Productionoverheadbudget. B.Administrationoverheadbudget.C.Sellinganddistributionoverhead
budget.D.Masterbudget.
223.Thebudgetpreparedtoestimatetheexpendituretobeincurredforplanning,organizing,direction
andcontrolfunctionofthemanagementis_________.
A. Productionoverheadbudget.B.Administrationoverheadbudget.
C.Sellinganddistributionoverheadbudget.D.Masterbudget.
224. Thebudgetpreparedtoestimateexpendituretobeincurredtoselltheproductanditsdistributionis

____________.
A. Productionoverheadbudget. B.Administrationoverheadbudget. C.Sellinganddistributionoverhead
budget.D.Masterbudget.
225.Thebudgetpreparedtoestimatetheresearchanddevelopmentexpendituretobeincurred
duringaspecificperiodis_____________.
A. Productionoverheadbudget.B.Administrationoverheadbudget.C.Sellinganddistributionoverhead
budget.D.Researchanddevelopmentbudget.
226. Thebudgetpreparedtoestimatetheexpenditureonfixedassetsisknownas_____.
A. Capitalexpenditurebudget.B.Productionoverheadbudget.C.Administrationoverheadbudget.
D.Sellinganddistributionoverheadbudget.
227. Thebudgetpreparedforreplacementofassets,expansionofproductionfacilities,adoptionof
newtechnologiesetc.is_______.
A.Capitalexpenditurebudget.B.Productionoverheadbudget.C.Administrationoverheadbudget.
C. Sellinganddistributionoverheadbudget.
228. Afixedbudgetispreparedforonly_________.
A. Onelevelofactivity.B.Rangeofactivity.C.Twolevelofactivity.D.Threelevelofactivity.
229. Aflexiblebudgetispreparedfora_____________.
A. Onelevelofactivity.B.Rangeofactivity.C.Twolevelofactivity.D.Threelevelofactivity.
230. Thebudgetstartswithoutanybaseis_______________.
A. Masterbudget.B.Flexiblebudget.C.Zerobasebudgeting.D.Fixedbudget.
231. Thebudgetwhichreviewsaprogrammeorprojectfromscratchis____.
A. Masterbudget.B.Flexiblebudget.C.Zerobasebudgeting.D.Fixedbudget.
232. Thebudgetsaidasresourceplanningandredeploymentprocessis_______.
A. Zerobasebudgeting.B.Masterbudget.C.Flexiblebudget.D.Fixedbudget.
233. Expectedsales+desiredclosingstockestimatedopeningstock=________
A. Expectedproduction.B.Expectedsales.C.Expectedpurchase.D.Expectedloss.
234. In production budget closing stock is added with
___________.
A.expense.B.Sales.C.purchase.D.material.
235. Inproductionbudgetopeningstockisdeductedwith_____________.
A. expense.B.sales.C.purchase.D.material.
236. MaterialconsumedisRs.5,00,000OpeningstockofrawmaterialisRs.50,000andClosing
stockofrawmaterialisRs.25,000.Whatisthecostofrawmaterialpurchased_________.
A. Rs.4,50,000.B.Rs.4,75,000.C.Rs.5,25,000.D.Rs.5,50,000.
237.IfsellingpriceisRs.25,000andprofitisRs.5,000thenwhatisthepercentageofprofit
oncast_______.
A. 20%.B.25%.C.33.33%.D.35%
238. Materialcontrolinvolves________.
A. consumptionofmaterial. B.issueofmaterial. C.purchaseofmaterial. D.purchase,storageand
issueofmaterial.
239. Materialrequisitionismeantfor_________.
A. purchaseofmaterial.B.supplyofmaterialfromstores.C.saleofmaterial.D.storageofmaterial.
240. StockcontrolthroughstocklevelsandEOQiscalled________.
A. demandandsupplymethod.B.perpetualinventorysystem.C.controlbyimportantandexception
D.automaticordermethod.

241. ABCanalysisis_____________.
A. AtBestControl.B.AlwaysBetterControl.C.AveragebetterControl.D.Allbestcontrol.
242. JITinventorysystemis_____________.
A. JustInTime.B.JustInventoryTime.C.JobInTime.D.JobInventoryTime.
243. Perpetualinventorysysteminvolves_________.
A. bincardandstoresledger.B.billofmaterialandmaterialrequisition.C.purchaserequisitionandpurchase
order.D.inwardandoutwardinvoices.
244. FIFOis____________.
A. FastInvestmentinFutureOrder.B.FirstInFirstOut.C.FastInFastOutD.FastIssueOfFastOrder.
245. LIFOmethodofpricingofmaterialsismoresuitablewhen______.
A.materialpricesarerising. B. materialpricesarefalling.C.materialpricesareconstant.D.material
pricesarefluctuating.
246. Averagemethodofpricingthematerialissuesisusefulwhen_______.
A. materialpricesarerising.B.materialpricesarefalling.C.materialpricesareconstant.D.materialprices
arefluctuating.
247. Scrapis_________.
A. residueofmaterial.B.wastageofmaterial.C.surplusmaterial.D.abnormallossofmaterial.
248.
Materialisissuedbystorekeeperagainst.
A. materialrequisition.B.materialorder.C.goodsreceivednote.D.purchaserequisition.
249. EOQstandsfor______________.
A. EconomicOrderQuantity.B.EssentialOrderQuantity.C.EconomicOutputQuantity.D.Essential
OutputQuantity.
250. Thedocumentwhichispreparedafterreceivingandinspectingmaterial_____.
A.materialrecordnote.B.goodsreceivednote.C.billofmaterial.D.inventoryrecord.