LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question
Correct Answer
True/False
Question
period.
Correct Answer
A business is an activity carried out with the intention of earning the profit.
True
Balance sheet indicates the financial status of the business at given
True
True/False
Question
Accounting refers to the process of analyzing & interpreting the
information already recorded in the books of accounts.
Correct Answer True
True/False
Question
Accounting is an art of recording, classifying & summarizing in a
significant manner.
Correct Answer True
True/False
Question
Correct Answer
Profitability statement indicates the amount of assets & liabilities.
False
True/False
Question
Correct Answer
Balance sheet indicates the expenditure & income from the business.
False
True/False
Question
The process of accounting split into three steams i.e. financial, cost,
management accounting.
Correct Answer True
True/False
Question
1) Financial statements are basically in two forms i.e. profitability
statement and balance sheet.
Correct Answer True
True/False
Question
Financial Accounting discloses the financial performance & financial
statements of the business as a whole.
Correct Answer True
True/False
Question
Correct Answer
Budgetary control is one of the techniques of management accounting.
True
Multiple Choice Multiple Answer
Question
Accounts is a
Correct Answer Record of all transaction
Multiple Choice Single Answer
Question
Profit & Loss Account shows Gross Profit 13,000. Expenses incurred as
Telephone charges 1500, Traveling expenses 3000, Salary paid 2000, discount allowed 500,
depreciation 200. Calculate the net profi
Correct Answer 5800
Multiple Choice Single Answer
Question
Goods distributed as free sample amounted to Rs. 10,000. Prepare
Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____
Correct Answer 15,000
Multiple Choice Single Answer
Question
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 -Correct Answer Transfer to balance sheet liability side
True/False
Question
For the purpose of preparation of trial balance , bank balance as per bank
book maintained by the business is considered and not the balance as per pass book.
Correct Answer True
Multiple Choice Single Answer
Question
Salary paid to employee amounted Rs. 10,000, transferred to Trading
A/C is an example of_______
Correct Answer Error of Commission
Multiple Choice Single Answer
Question
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
Correct Answer 900
Multiple Choice Multiple Answer
Question
Following error affect the trial balance
Correct Answer Wrong totaling of subsidiary books , Posting on the wrong side of an
account , Omission of posting an account in the ledger
Multiple Choice Multiple Answer
Question
Following errors do not affect the trial balance
Correct Answer Error of Principle , Error of Omission , Error of Commission
True/False
Question
On tallying of trial balance, books of account become free from
compensating errors.
Correct Answer False
Multiple Choice Single Answer
Question
Cost-sheet may be prepared separately for each
Correct Answer Different Cost Centre
Multiple Choice Multiple Answer
Question
Bin Card Includes
Correct Answer Entries in receipt column on basis of goods received note or material
returned note , Entries in issue column on basis of material requisition note , The balance
quantity is calculated and recorded
Multiple Choice Multiple Answer
Question
Valuation of material movements having the problems under following
heads
Correct Answer valuation of receipt , valuation of issues , valuation of returns from
production to store
Multiple Choice Single Answer
Question
The material physically received is compared with material ordered as per
the this order
Correct Answer Purchase order
Multiple Choice Single Answer
Question
This is not the non monetary incentive.
Correct Answer Co-partnership
True/False
Question
The variable overheads can be controlled at the lower or middle level of
management also.
Correct Answer True
Multiple Choice Single Answer
Question
This is the best example of element wise classification of cost.
Correct Answer material
Multiple Choice Multiple Answer
Question
Correct Answer
wise classification of overheads takes the form of –
indirect material , indirect labour , indirect expenses
Multiple Choice Multiple Answer
Question
Functionwise classification of overheads takes the form of
Correct Answer administration overheads , factory overheads , distribution overheads
Multiple Choice Multiple Answer
Question
Following methods are available for segregating the semi variable cost
into its individual components of fixed cost and variable cost.
Correct Answer analytical method , scattergraph method , least square method
True/False
Question
Normally advertising cost budget is established in the form of a fixed
amount for a specific period.
Correct Answer True
Multiple Choice Multiple Answer
Question
Basic three steps in Standard Costing are
Correct Answer Setting standards , Comparing actuals with standards , Measurement of
variance
Multiple Choice Single Answer
Question
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.
Correct Answer Rs.375/-( Adverse )
Multiple Choice Single Answer
Question
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.
Correct Answer Rs.900/- ( Adverse )
Multiple Choice Multiple Answer
Question
Cash Budget can be prepared by using three methods namely
Correct Answer Receipt & Payment Method , Adjusted Profit & Loss Account Method ,
Balance Sheet Method
Match The Following
Question
Correct Answer
Your Answer
Re-order level
Maximum lead time multiplied by maximum usage
Maximum lead time multiplied by maximum usage
Maximum level
minimum lead time)
minimum lead time)
Re-order + re-order quantity – (minimum usage multiplied by
Re-order + re-order quantity – (minimum usage multiplied by
Minimum level
time)
time)
Re-order level – (normal usage multiplied by normal lead
Re-order level – (normal usage multiplied by normal lead
Average level
Maximum level + minimum level/2
Maximum level + minimum level/2
Danger level
purchases
purchases
Normal usage multiplied by lead time for emergency
Normal usage multiplied by lead time for emergency
Match The Following
Question
Correct Answer
Your Answer
Budgetary Control
Points out efficiency/inefficiency
Further probe and investigation
Standard Costing
Further probe and investigation
Points out efficiency/inefficiency
Ideal Standards
Theoretical in nature
Theoretical in nature
Current Standards
Established for a shorter period
Established for a shorter period
Normal Standards
Considers past performance Considers past performance
Select The Blank
Question
Accounting to the matching principles of accounting, the ________
incurred during an accounting period are required to be match with ________ during that
period
Correct Answer cost
Correct Answer revenues
Select The Blank
Question
If ________ books are the books which record the transactions in the
chronological order, ________ is the book where transactions of a similar nature are pooled
together
Correct Answer subsidiary
Correct Answer ledger
Select The Blank
Question
The bank reconciliation statement is prepared to reconcile the balances
of ________ and ________
Correct Answer cash book
Correct Answer pass book
Select The Blank
Question
If the revenue expenditure is treated as ________ expenditure , it will not
affect the agreement of ________ balance
Correct Answer capital
Correct Answer trial
Select The Blank
Question
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
Correct Answer discourage
Correct Answer leaving
Select The Blank
Question
Fixed cost is the cost that tend to remain ________ irrespective of
________
Correct Answer constant
Correct Answer
Your Answer
level of activity
level of activity
Select The Blank
Question
variable cost is the cost that tend to ________ in direct proportion with
________
Correct Answer vary
Your Answer
vary
Correct Answer level of activity
Your Answer
level of activity
Select The Blank
Question
A key factor is defined as the factor which, at a particular point of time or
over a period will ________ the volume of ________
Correct Answer limit
Your Answer
increase
Correct Answer output
Your Answer
activity level
Select The Blank
Question
________ of Trial Balance generally ensures ________ accuracy of the
process of ledger posting .
Correct Answer Talling
Your Answer
Talling
Correct Answer arithmetical
Your Answer
arithmetical
Select The Blank
Question
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.
Correct Answer Stores
Your Answer
Stores
Correct Answer Re-order level
Your Answer
Re-order level
1. Sales quantity may be forecasted after taking into consideration
various factors such as
Analysis of past trends 
Market research 
Reports by salesmen
8.
1. Dividend Received
1.
Loss of Business
2. Interest
2.
Added in Capital
3. Discount
3.
Amount of Income
4. Provision
4.
Benefit
5. Commission Received
5. Amount kept outside
from profit
14. Cost of machine is 10,00,000. To be depreciated on time basis
over life of machine i.e. 10 yrs = 5,00,000. Estimated number of
units to be produced 5,00,000. Calculate depreciation on time basis &
on
1,50,000
1,20,000
1,00,000
2,00,000
True/False
Question
A business is an activity carried out with the intention of earning the profit.
Correct Answer True
Your Answer
True
True/False
Question
Balance sheet indicates the financial status of the business at given period.
Correct Answer True
Your Answer
True
True/False
Question
Accounting refers to the process of analyzing & interpreting the information
already recorded in the books of accounts.
Correct Answer True
Your Answer
False
True/False
Question
Accounting is an art of recording, classifying & summarizing in a significant
manner.
Correct Answer True
Your Answer
True
True/False
Question
Financial accounting may deal with the ascertainment of cost & calculation
of profitability of the individual product.
Correct Answer False
Your Answer
False
True/False
Question
The reports generated by financial accounting are meant for the use by
management for effective decisions.
Correct Answer True
Your Answer
True
Multiple Choice Multiple Answer
Question
Cost Accounting ______________.
Correct Answer Concerned with specific activities. , Classified according to their nature. , It
deals with both i.e. past & present.
Your Answer
Concerned with specific activities. , Classified according to their nature. , It
covers whole business
Multiple Choice Multiple Answer
Question
Management Accounting __________________.
Correct Answer Designed particularly for internal use only. , Looks forward in estimating the
future along with past period. , This furnishes the necessary information to management.
Your Answer
Designed particularly for internal use only. , Looks forward in estimating the
future along with past period. , This furnishes the necessary information to management. ,
Only a, b, c.
Multiple Choice Multiple Answer
Question
Accounting is the art of ______________,____________ and
____________ in a significant manner and in terms of money transactions and events which
are of a financial character and interpreting the res
Correct Answer Summarizing , Classifying , Recording
Your Answer
Summarizing , Classifying , Recording
Multiple Choice Multiple Answer
Question
The process of accounting has three streams of accounting ---------------,-------and ----------------------.
Correct Answer Financial Accounting , Cost Accounting , Management Accounting
Your Answer
Financial Accounting , Cost Accounting , Management Accounting
Match The Following
Question
Correct Answer
Personal A/C
Debit the receiver, Credit the giver
Debit the receiver, C
Real A/C
Debit what comes in, Credit what goes out
Debit what comes in
Nominal A/C
Debit all the expenses, Credit all the incomes
Debit all the expense
Tangible assets
Building, Machinery
Building, Machinery
In tangible assets
Patents, Trade marks
Patents, Trade marks
Your Answer
True/False
Question
Credit note is an intimation send to person dealing with the business that
his account being debited for the purpose indicated therein.
Correct Answer False
Your Answer
True
True/False
Question
Amount invested in purchasing Fixed Asset is a revenue expenditure.
Correct Answer False
Your Answer
False
True/False
Question
As per double entry system o accounting , total of all debits should be
equal to all credits.
Correct Answer True
Your Answer
True
Multiple Choice Multiple Answer
Question
Convention of Consistency Materiality ________________
Correct Answer The accounting policies & procedures should follow consistently on period
to period , It facilitates the comparison of financial statements on period to period , If any
change the fact should be disclosed with its effects on profitability
Your Answer
The accounting policies & procedures should follow consistently on period
to period , It facilitates the comparison of financial statements on period to period , If any
change the fact should be disclosed with its effects on profitability
Multiple Choice Multiple Answer
Question
Cash and---------------are the two systems of accounting.
Correct Answer Mercantile
Your Answer
Mercantile
Multiple Choice Single Answer
Question
The opening balance of cash account is Rs. 25,000, cash received from
debtors Rs. 30,000, sold goods amounted to Rs. 50,000, paid to creditors Rs. 20,000,
purchase furniture Rs. 5000. What is the clos
Correct Answer 80,000
Your Answer
80,000
Multiple Choice Single Answer
Question
Bank Reconciliation statement is required in case of
Correct Answer difference between the bank balance as per the bank book and as per pass
book
Your Answer
difference between the bank balance as per the bank book and as per pass
book
Match The Following
Question
Correct Answer
Error of Principle
Trial Balance does not get affected
Wrong Posting
Error of Omission
The transaction is totally omitted
The transaction is to
Error of commission
Wrong Posting
Wrong classification
Compensating Error
affected
Wrong classification
Trial Balance does not get
Difference in trial balance
Transferred to suspense account
Your Answer
Multiple Choice Multiple Answer
Question
Direct Cost includes
Correct Answer Direct material , Direct labour , Direct expenses
Your Answer
Direct material , Direct labour , Direct expenses
Multiple Choice Single Answer
Question
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
Correct Answer Remuneration
Your Answer
Indirect
Multiple Choice Multiple Answer
Question
The Prime Cost includes the aggregate of
Correct Answer Direct Material Cost , Direct Labour Cost , Direct Expenses
Your Answer
Direct Material Cost , Direct Labour Cost , Direct Expenses
Multiple Choice Multiple Answer
Question
From the following particulars what must appear in purchase requisition
Correct Answer Material to be purchased should be cleanly specified , Material should
purchase whenever the market for the same is favorable , Purchase requisition should state
the quantity of material required.
Your Answer
Material to be purchased should be cleanly specified , Purchase requisition
should state the quantity of material required.
Multiple Choice Multiple Answer
Question
Following points are taking into consideration for evaluation of receipts
Correct Answer The Price , The trade discount is to be deducted , Other amounts such as
sales tax, excise duty, octroi duty
Your Answer
The Price , The trade discount is to be deducted , Other amounts such as
sales tax, excise duty, octroi duty
Multiple Choice Multiple Answer
Question
While fixing the maximum level following factors are considered
Correct Answer Maximum usage , Storage facilities , Availability of funds
Your Answer
Maximum usage , Rate of consumption
Transferred to suspe
True/False
Question
Fixed cost tends to vary with time rather than with level of activity.
Correct Answer True
Your Answer
True
True/False
Question
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.
Correct Answer False
Your Answer
False
Multiple Choice Single Answer
Question
Find out the break even point and profit if sales are Rs. 50,00,000 and P/V
Ratio is 50% and margin of safety is 40%
Correct Answer Rs.30,00,000 and Rs.10,00,000
Your Answer
Rs.30,00,000 and Rs.10,00,000
True/False
Question
For better control, variances of a period may be compare with the previous
period.
Correct Answer True
Your Answer
True
True/False
Question
Expected standards are more realistic and useful for cost control.
Correct Answer True
Your Answer
True
True/False
Question
The difference between standard cost and actual cost is termed as
Variance.
Correct Answer True
Your Answer
True
Multiple Choice Multiple Answer
Question
For reporting of variance, following propositions should be considered
Correct Answer Responsibility of each individual should be defined , Reporting should be
simple, clear and quick , Analysis of variance should be accurate.
Your Answer
Responsibility of each individual should be defined , Reporting should be
simple, clear and quick , Analysis of variance should be accurate.
Multiple Choice Multiple Answer
Question
Basic three steps in Standard Costing are
Correct Answer Setting standards , Comparing actuals with standards , Measurement of
variance
Your Answer
Setting standards , Comparing actuals with standards , Measurement of
variance
Multiple Choice Single Answer
Question
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.
Correct Answer Rs.900/- ( Adverse )
Your Answer
Rs.900/- ( Adverse )
Multiple Choice Single Answer
Question
Standard costs are the targets to be attained by the actual performance.
Correct Answer Minimum
Your Answer
Minimum
Multiple Choice Single Answer
Question
Standard Costs are used as tool for
Correct Answer Cost Control
Your Answer
Cost Control
Select The Blank
Question
Accounting to the matching principles of accounting, the ________ incurred
during an accounting period are required to be match with ________ during that period
Correct Answer cost
Your Answer
cost
Correct Answer revenues
Your Answer
revenues
Select The Blank
Question
Along with financial accounting, ________ and ________ are the other
streams of accounting
Correct Answer Cost Accounting
Your Answer
Management Accounting
Correct Answer Management Accounting
Your Answer
Cost Accounting
Select The Blank
Question
If the revenue expenditure is treated as ________ expenditure , it will not
affect the agreement of ________ balance
Correct Answer capital
Your Answer
capital
Correct Answer trial
Your Answer
trial
Select The Blank
Question
While selecting source of supply ________ epartment may call for the
________ from the prospective suppliers
Correct Answer purchase
Your Answer
purchase
Correct Answer quotation
Your Answer
quotation
Select The Blank
Question
After material is received from the supplier, quantity actually received is
compared with quantity ________-and ________-if any, are taken up with the supplier
Correct Answer ordered
Your Answer
ordered
Correct Answer variation
Your Answer
variation
Select The Blank
Question
Under the daily ________ sheets method, each worker is provided with a
daily time sheet on which time ________ by him on various jobs is expected to be mentioned
Correct Answer time
Your Answer
work
Correct Answer spent
Your Answer
spent
Select The Blank
Question
4.Under the differential time rate method the wages are paid at Rs. 1.50
per hour between ________ efficiency and Rs.1.25 per hour between ________ efficiency
Correct Answer 101% to 125 %
Your Answer
90-100
Correct Answer 80% to90%
Your Answer
101% to 125 %
Select The Blank
Question
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
Correct Answer below standard
Your Answer
below standard
Correct Answer at standard
Your Answer
at standard
Select The Blank
Question
________ and ________ are examples of element wise classification
ofoverhead costs
Correct Answer Idirect material
Your Answer
Idirect material
Correct Answer indirect labour
Your Answer
selling overheads
Select The Blank
Question
Fixed cost is the cost that tend to remain ________ irrespective of
________
Correct Answer constant
Your Answer
constant
Correct Answer level of activity
Your Answer
level of activity
Select The Blank
Question
The process of Allocation & apportionment can followed to decide the
________ of overheads to each budget center
Correct Answer Allocation & apportionment
Your Answer
Distribution
Correct Answer Loading
Your Answer