UGBS 208 SET 1 MCQs – THE LET’S KILL IT
SET 1
1. If the beginning raw materials inventory is $10,000, purchases during the period are
$50,000, and the ending raw materials inventory is $8,000, what is the cost of raw
materials available for use?
A. $48,000
B. $52,000
C. $60,000
D. $58,000
2. If the beginning raw materials inventory is $15,000, purchases during the period are
$45,000, and the ending raw materials inventory is $12,000, what is the cost of raw
materials used?
A. $42,000
B. $48,000
C. $55,000
D. $60,000
3. Factory expenses include only indirect expenses.
A. True
B. False
4. If the beginning inventory of work in progress is $9,000, the ending inventory is $7,000,
and the total manufacturing costs are $70,000, what is the cost of production?
A. $68,000
B. $72,000
C. $74,000
D. $66,000
5. If factory overheads are $40,000, cost of sales $1500, and direct labor costs are $80,000,
what is the factory overhead rate if calculated based on direct labor cost?
A. 50%
B. 40%
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C. 30%
D. 60%
6. Provision for unrealized profit is subtracted from the cost of goods sold.
A. True
B. False
7. If the total sales are $700,000, prime cost $400,000, factory overheads of $6,000, and
the cost of goods sold is $450,000, what is the gross profit?
A. $250,000
B. $300,000
C. $350,000
D. $400,000
8. If the total manufacturing costs are $250,000 and the cost of production is $240,000,
what is the change in work in progress?
A. Increase of $10,000
B. Decrease of $10,000
C. Increase of $20,000
D. Decrease of $20,000
9. If direct labor costs are $60,000, direct materials are $50,000, and manufacturing
overhead is $70,000, what is the prime cost?
A. $130,000
B. $180,000
C. $110,000
D. $200,000
10. If the cost of raw materials available for use is $70,000 and the ending inventory of raw
materials is $15,000, what is the cost of raw materials used?
A. $65,000
B. $55,000
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C. $75,000
D. $60,000
11. Manufacturing overhead includes expenses such as utilities and rent for the factory.
A. True
B. False
12. If the beginning inventory of finished goods is $25,000, the cost of goods manufactured
is $200,000, and the ending inventory of finished goods is $30,000, what is the cost of
goods sold?
A. $205,000
B. $195,000
C. $190,000
D. $185,000
13. If the total manufacturing costs are $230,000 and the cost of production is $220,000,
what is the change in work in progress?
A. Increase of $10,000
B. Decrease of $10,000
C. Increase of $20,000
D. Decrease of $20,000
14. Unrealized profit is included in the calculation of net profit.
A. True
B. False
15. If direct labor costs are $65,000, direct materials are $55,000, and manufacturing
overhead is $75,000, what is the prime cost?
A. $195,000
B. $120,000
C. $130,000
D. $195,000
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16. If the beginning inventory of finished goods is $20,000, the cost of goods manufactured
is $180,000, and the ending inventory of finished goods is $25,000, what is the cost of
goods sold?
A. $175,000
B. $165,000
C. $185,000
D. $195,000
17. Factory and office expenses are both included in the calculation of total manufacturing
costs.
A. True
B. False
18. Unrealized profit is profit that is recognized in the financial statements before the sale
of goods.
A. True
B. False
19. If the beginning inventory of finished goods is $18,000, the cost of goods manufactured
is $150,000, and the ending inventory of finished goods is $20,000, what is the cost of
goods sold?
A. $160,000
B. $150,000
C. $148,000
D. $140,000
20. Depreciation of factory equipment is considered an indirect expense.
A. True
B. False
21. Market value is the price at which goods can be sold in the market.
A. True
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B. False
22. Manufacturing overhead includes both variable and fixed costs.
A. True
B. False
23. Work in progress adjustments are made at the end of the accounting period to ensure
accurate cost allocation.
A. True
B. False
24. If the market value of the finished goods is $120,000 and the cost is $100,000, what is
the provision for unrealized profit?
A. $10,000
B. $20,000
C. $30,000
D. $40,000
25. If the selling price of a product is $100 and the cost of production is $70, what is the
unrealized profit?
A. $20
B. $30
C. $40
D. $50
26. Which of the following is a method used to allocate indirect expenses to departments?
A. Activity-based costing
B. Step-down method
C. Direct costing
D. Variable costing
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27. If a department has a beginning inventory of $5,000, purchases of $20,000, and an
ending inventory of $7,000, what is the cost of goods sold?
A. $18,000
B. $20,000
C. $15,000
D. $22,000
28. What is the formula for calculating departmental gross profit?
A. Revenue - Cost of Goods Sold
B. Sales - Direct Costs
C. Revenue - Total Expenses
D. Profit - Overheads
29. If Department A has a budgeted expense of $30,000 but actually incurs $35,000, what
is the variance?
A. $5,000 favorable
B. $5,000 unfavorable
C. $30,000 favorable
D. $30,000 unfavorable
30. If a department’s direct expenses are $25,000 and indirect expenses allocated to it are
$10,000, what are the total expenses?
A. $20,000
B. $30,000
C. $35,000
D. $15,000
31. Which allocation base might be used to distribute heating costs among departments?
A. Number of employees
B. Number of machines
C. Floor space
D. Sales revenue
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32. If Department B uses 40% of the company's total floor space and the total rent is
$50,000, how much rent is allocated to Department B?
A. $10,000
B. $20,000
C. $30,000
D. $40,000
33. If a company has three departments and allocates $15,000 of overhead costs based
on the number of employees, with Department X having 10 employees, Department Y
having 20 employees, and Department Z having 30 employees, how much overhead is
allocated to Department X?
A. $2,500
B. $5,000
C. $7,500
D. $10,000
34. If Department C's revenue is $500,000, direct costs are $200,000, and allocated
indirect costs are $100,000, what is the departmental profit?
A. $200,000
B. $300,000
C. $400,000
D. $100,000
35. If the total maintenance cost for a factory is $40,000 and is allocated based on machine
hours used, with Department A using 800 machine hours and Department B using 1,200
machine hours, how much cost is allocated to Department A?
A. $20,000
B. $16,000
C. $25,000
D. $30,000
36. If a department has a net profit of $25,000 and total revenue of $100,000, what is the
profit margin?
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A. 20%
B. 25%
C. 30%
D. 35%
37. Which of the following is a benefit of departmental accounting?
A. Simplifies overall company financial reporting
B. Allows detailed performance evaluation
C. Reduces the need for financial controls
D. Eliminates the need for cost allocation
38. If the cost of goods sold for Department D is $150,000 and the revenue is $250,000,
what is the gross profit percentage?
A. 50%
B. 40%
C. 60%
D. 70%
39. Departmental budgets help in:
A. Increasing overall sales
B. Controlling costs
C. Reducing product quality
D. Eliminating competition
40. In departmental accounting, indirect costs are allocated before direct costs. - Opt A.
True
B. False
41. Department E uses 25% of the company’s total square footage. If the total rent is
$60,000, how much rent is allocated to Department E?
A. $10,000 B. $15,000
C. $20,000 D. $25,000
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42. If Department P's allocated utilities expense is $12,000 and represents 15% of the total
utilities expense, what is the total utilities expense?
A. $60,000 B. $80,000 C. $100,000 D. $120,000
43. Which of the following is NOT typically a service department?
A. Accounting B. Human Resources
C. Manufacturing D. Maintenance
44. Provision for unrealized profit is made to reflect the true value of inventory.
A. True B. False
45. Direct expenses are those that can be traced directly to a specific department.
A. True B. False
SET 2
1. Interest on partners drawings increases
A. working capital
B. current account
C. gross profit
D. net profit
2. The forfeited shares can be issued at
A. All of them
B. Par
C. Discount
D. Premium
3. A disadvantage of single entry system is that
A. the businessman makes large drawings
B. total sales is reduced
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C. profit is reduced
D. It is difficult to determine profit
4. The total of direct labour, direct production expenses and factory overhead is called
as:
A. Overhead cost
B. Prime cost
C. Manufacturing cost
D. Conversion cost
5. The money paid on forfeited shares is credited to
A. Forfeited shares
B. Share deal
C. Share capital
D. Share premium
6. Amadu and Angela were in partnership sharing profit in the ratio 3:2. The capital were
Ghc200,000 and Ghc 100,000 and their drawings were Ghc 90,000 and Ghc 60,000. Profit
for the year was Ghc 270,000 before 5% interest on capital. No interest is charged on
drawings. What is closing balance on Amadu's current account?
A. 73,000
B. 153,000
C. 110,000
D. 163,000
7. The equivalent of a cashbook for a social club is
A. Statement of affairs B. Income and expenditure
C. Receipt and payment D. Balance sheet
8. The correct equation for computing net profit/loss from incomplete record is
A. Closing capital + opening capital - drawings
B. Closing capital - opening capital - drawings
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C. Closing capital + opening capital + drawings
D. Closing capital - opening capital + drawings
9. A firm with 2 departments A & B shares expense in the ratio of 3:2 respectively.
Expenses: Salaries=Ghc 2,600: Vehicle expense=Ghc 1,500: Rent= Ghc 1,000: Telephone
charges=Ghc355. Determine the total expense charged to department B
A. 1846
B. 5,100
C. 2,182
D. 3,273
10. Where there are no books of account, the capital at the beginning is ascertained by
preparing Statement Of Affairs
11. Share discount is shown in the balance sheet as in
A. Separate item on liability side
B. Deduction in paid up capital
C. Addition in paid up capital
D. Assets
12. Brobbey started business on 1st Jan 2019 with Ghc 500,000. At the end of the year,
his total assets valued Ghc800,000 without liabilities. Throughout the year, he took Ghc
200,000 from the business for personal use. In June 2019, he won lottery of Ghc 300,000
and added the price to the business' capital. Calculate Brobbey's profit.
A. 400,000
B. 800,000
C. 100,000
D. 200,000
13. In the statement of financial position of NGOs, subscription received in advance
from members are treated as Revenue Prepaid/Liability
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14. Mr. Elvis Essel was employed as a sales manager of a firm. He was entitled to 8%
commission of profit after charging this commission. The profit for the year was Ghc
540,000 before charging comission. What is profit after commission?
A. 496,800
B. 490,000
C. 520,000
D. 500,000
15. Opening subscription owing: Ghc 30,000: Subscription received: Ghc 320,000. Closing
subscription prepaid 40,000. Determine the subscription amount to be sent to income
and expenditure. 250,000.00
16. The total value received by company as a consideration of share issued constitute its
A. stated capital
B. capital employed
C. shareholders fund
D. treasury share
17. A firm with 2 departments A & B shares expense in the ratio of 3:2 respectively.
Expenses: Salaries=Ghc 2,600: Vehicle expense=Ghc 1,500: Rent= Ghc 1,000: Telephone
charges=Ghc355. Determine the telephone expense charged to department A
A. 155
B. 213
C. 142
D. 150
18. Deferred shares are generally issued to:
A. General public
B. Managing agents
C. Promoters
D. Shareholders
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19. Onaapo club, a private not-for-profit zoological society, received contributions
restricted for research totaling $50,000 in 2011. None of the contributions were spent on
research in 2011. In 2012, $35,000 of the contributions were used to support the
research activities of the society. The net effect on the statement of activities for the year
ended December 31, 2012, for Sea Lion Park would be a
A. $35,000 decrease in unrestricted net assets.
B. $35,000 decrease in temporarily restricted net assets.
C. 35,000 increase in unrestricted net assets.
D. $15,000 increase in temporarily restricted net assets.
20. Amadu and Angela were in partnership sharing profit in the ratio 3:2. The capital
were Ghc200,000 and Ghc 100,000 and their drawings were Ghc 90,000 and Ghc 60,000.
Profit for the year was Ghc 270,000 before 5% interest on capital. No interest is charged
on drawings. What is Angela's share of profit?
A. 162,000 B. 135,000
C. 102,000 D. 90,000
21. A firm with 2 departments A & B shares expense in the ratio of 3:2 respectively.
Expenses:: Salaries=Ghc 2,600: Vehicle expense=Ghc 1,500: Rent= Ghc 1,000: Telephone
charges=Ghc355. Determine the total expense charged to department A
A. 4100
B. 1355
C. 2182
D. 3273
22. In the statement of financial position of NGOs, subscription yet to be paid by
members are treated as
A. ............................................................
23. Bonus shares can be issued at
A. Premium
B. Par
C. Discount
D. All of them
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24. Babena Hospital, a private not-for-profit hospital, earned $250,000 of gift shop
revenues and spent $50,000 on research during the year ended December 31, 2012. The
$50,000 spent on research was part of a $75,000 contribution received during December
of 2011 from a donor who stipulated that the donation be used for medical research.
Assume none of the gift shop revenues were spent in 2012. For the year ended
December 31, 2012, what was the increase in unrestricted net assets from the events
occurring during 2012?
A. $250,000
B. $200,000
C. $275,000
D. $300,000
25. Which of the following items is not dealt with in the income statement of a company
A. income from investment
B. director fees
C. interim dividend paid
D. auditor's remuneration
26. Mr. Elvis Essel was employed as a sales manager of a firm. He was entitled to 8%
commission of profit after charging this commission. The profit for the year was Ghc
540,000 before charging comission. What is Mr. Essels commission?
A. Ghc 40,000
B. Ghc 38,000
C. Ghc 43,200
D. Ghc 54,000
27. Incomplete record arises when
A. The ledgers are less than required
B. The double entry principle is not applied
C. All accounts are in one ledger
D. Some transactions are not in cash
28.A limited corporation can issue shares at a discount not exceeding:
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A. 20%
B. 10%
C. 5%
D. 0%
29. Amadu and Angela were in partnership sharing profit in the ratio 3:2. The capital
were Ghc200,000 and Ghc 100,000 and their drawings were Ghc 90,000 and Ghc 60,000.
Profit for the year was Ghc 270,000 before 5% interest on capital. No interest is charged
on drawings. What is Amadu's share of profit?
A. 135,000
B. 153,000
C. 180,000
D. 162,500
30.Which of the following is not an income generating activity for a social club?
A. Bar trading
B. Maintenance of ground
C. Suubsciption
D. Life membership fees
SET 3
Question 1/30
Which of the following is the most suitable basis for apportioning bad debts incurred by departments within a
business organization that has instituted departmental accounting?
A. Commission on sales
B. Credit sales
C. Cash ratio
D. Total sales
Question 2/30
In departmental accounting, inter-departmental transfer occurs when
A. Goods handled by one department are moved to another department to be sold.
B. A department is completely out of stock
C. The goods sold by all departments are similar
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UGBS 208 SET 1 MCQs – THE LET’S KILL IT
D. Department orders similar goods sold by another department from suppliers
Question 3/30
The amount receivable from shareholders who default in meeting up their calls is
A. first call
B. second call
C. call in advance
D. call in arrears
Question 4/30
Which of the following is not a provision in the partnership agreement?
A.
B.
C.
Capital structure of the firm
Mode of admission into a firm
The level of profit to be made
D.
D. Mode of distributing profit
Question 5/30
When a shareholder fails to pay the calls requested from him, this situation leads to
A. over-subscription
B. bonus shares
C. right issue
D. forfeiture of shares
6/30
Cost of goods manufactured is transferred to the
A. statement of financial position
B. manufacturing account
C. trading account
D. profit and loss account
Question 7/30
Ordinary shares are referred to as
A. treasury bills
B. equity
C. Preference shares
D. bond
Question 8/30
The number of people who can ordinarily form a partnership is limited to
A. 1,000 persons
B. 50 persons C. 2 persons
D. 20 persons
Question 9/30
In the manufacturing business, depreciation of delivery vans is classified under
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A. Selling cost
B. Administrative cost
C. Production cost
D. Prime cost
Question 10/30
The document which sets out terms and condition of a partnership is termed
A. Deed
B. Regulations
C. Memorandum
D. Partner register
Question 11/30
Manufacturing profit results when
A. Sales is less than cost of sales
B. work-in-progress is subtracted from cost of production
C. Market value of goods manufactured is greater than factory overheads
D. cost of production is less than market value
12/30
In a limited liability company, management of the business is the responsibility of
A. Shareholders
B. partners
C. directors
D. workers
Question 13/30
Which of the following is not a factory overhead?
A. Cost of direct materials used
B. Work supervisor’s salary
C. Depreciation of plant and machinery
D. Factory electricity bill
Question 14/30
A partnership agreed to pay 1% of the net profit as a bonus to one partner. The accounting treatment is
A. Debit current account, credit appropriation account
B. Debit appropriation account, credit current account
C. Debit bonus account, credit current account
D. Debit appropriation account, credit profit & loss account
Question 15/30
Which of the following items are part of conversion cost of a product?
A.
B.
C.
Direct material cost, Direct labor cost & Factory overhead
Factory overhead, Direct labor, Royalties
Factory overhead, Direct labor, Opening W-I-P
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D.
D. Direct material cost & Labor cost
Question 16/30
The correct accounting entries for the movement of goods from department A to department B for sale in a
departmental accounting are: debit
A. Department B purchases account, credit departmental A sales account
B. Department B sales account, credit departmental A sales account
C. Department A purchases account, credit departmental B purchases account
D. Department B purchases account, credit departmental A purchases account
Question 17/30
The summation of application fees, allotment fees and install mental fees is the
A. premium
B. issue price
C. call price
D. discount
18/30
Expenses like rent, heating and lighting that cannot be traced to any department are
A. Distributed
B. Allocated
C. Apportioned
D. Allotted
Question 19/30
In departmental accounting, when purchases made for a particular department is subsequently sent to another
department, the transaction is termed ……….
A. Intra-departmentalization
B. Inter-departmental transfer
C. Intra-departmental transfer D.
Inter-departmentalization
Question 20/30
A proposed dividend is
A. Added to capital
B. Subtracted from capital
C. Debited to appropriation account
D. Credited to appropriation account
Question 21/30
Which of the following items are part of conversion cost of a product?
A. Factory overhead, Direct labor, Royalties
B. Factory overhead, Direct labor, Opening W-I-P
C. Direct material cost & Labor cost
D. Direct material cost, Direct labor cost & Factory overhead
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Question 22/30
One advantage of department accounting is that it
A.
B.
C.
Eliminates rivalry between staff
Discloses departmental performance
Helps in the recruitment of accounting stuff D. Ensures high turnover
Question 23/30
Which of the following circumstances is departmental accounting suitable? When an organization
A. Does contract purchases
B. Processes one line of goods
C. Sells a variety of goods
D. Sells one line of goods
24/30
The document which advertises the sale of shares of a company is a/an
A.
B.
C.
Prospectus
debenture
statement
D.
D. invoice
Question 25/30
Which of the following has the last claim to the asset of a company in the event of liquidation
A. preference shares
B. equity shares
C. trade creditors
D. debenture holders
Question 26/30
Which of the following is not charged to manufacturing account?
A. Royalties
B. Direct expenses
C. Distribution expenses
D. Factory wages
Question 27/30
In preparing account for a partnership, interest on drawings is debited to current account and credited to
A. Salaries account
B. Appropriation account
C. Profit and loss account
D. Capital account
Question 28/30
In absence of partnership agreement, capital contribution by partners attracts
A.
B.
15% interest
0% interest
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C.
10% interest
D.
5% interest
Question 29/30
The usual basis of apportioning rent of premises in departmental accounts is on ………
A.
B.
C.
D.
Personnel in each department
Department salaries
Floor area occupied
Department sales
30/30
Partners’ drawing is debited to
A. Interest account B.
Trading account
C. Appropriation account
D. Current account
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