Suraj Patel Education
Question Bank -
2020
Sub :- Costing
Part 2 Link Click Here
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1. This represents the total value of finished goods in
stock
a) General Ledger
Adjustment Account b) Stores Ledger Control Account
c) Work-in-Progress
Ledger
d) Finished Goods Control Account
2. In a non-integrated system of accounting, the emphasis is
on,
a) Personal accounts
b) Real accounts
c) Nominal accounts
d) All of these
3. A concern has a non-integrated costing system. Salaries
and wages analysis book
indicates the following breakup:
Direct wages ` 38,500
Indirect factory
wages ` 9,500
Administrative
salaries ` 9,700
Selling and
distribution salaries ` 4,300
Which of the
following statement is false
(i) No additional
entry is passed in financial books for break-up
(ii) Work-in-progress
Ledger Control A/c will be debited with ` 38,600
(iii) Salaries and
Wages Control A/c will be debited with ` 62,100
(a) Only (i)
(b) All
(c) Only (ii)
(d) None
4. Cost and financial accounts are required to be
reconciled under
a) Integral system
b) Cost control accounts system
c) Under both (a) and (b)
d) None of these
5. Which of the following accounts makes the cost ledger
self-balancing?
a) Overhead
adjustment account
b) Costing P&L account
c) Cost ledger
control account
d) None of the above
6. Materials Transfer Note
a) authorizes and
records the issue of materials for use
b) records the return
of unused materials
c) records the shifting of materials from one store to
another
d) a classified record of materials, issues, returns and
transfers
7. A document which is a classified record of material
issues, returns and transfers
a) Materials
Requisition Note
b) Materials Return
Note
c) Materials Transfer
Note
d) Materials Issue Analysis Sheet
8. This is essential to make the cost ledger
‘self-balancing’
a) General Ledger Adjustment Account
b) Stores Ledger Control Account
c) Work-in-Progress
Ledger
d) Finished Goods Control Account
9. This is debited with all purchases of materials for the
stores and credited with
all issues of materials
a) General Ledger
Adjustment Account
b) Stores Ledger Control Account
c) Work-in-Progress
Ledger
d) Finished Goods Control Account
10. In this, cost of materials, wages and overheads of each
job undertaken is posted
a) General Ledger
Adjustment Account
b) Stores Ledger Control Account
c) Work-in-Progress Ledger
d) Finished Goods Control Account
11. Purchases for special jobs is debited under
non-integrated system to
a) Work-in-progress ledger control account
b) Cost ledger control account
C) Stores ledger control account
D) Purchases account
12. The raw materials issued to a job were overestimated and
the excess is being
sent back to the materials stores. What document is
required?
a) Stores credit note
b) Stores debit note
c) Materials returned note
d) Materials transfer note
13. What is a cost ledger control account?
a) An account in the cost ledger to record financial
accounting items
b) An account in the
financial ledger to record cost accounting items
c) An account that
summarises outstanding payables balances
d) An account that
summarises cost control accounts include the following:
14. The advantages of maintaining cost control accounts
include the following:
a) facilitate prompt
preparation of costing profit and loss account
b) help management in
policy formulation
c) facilitate
internal check
d) all of the above
15. A credit to Work in Process Inventory represents
a) work still in
process
b) raw material put
into production
c) the application of
overhead to production
d) the transfer of completed items to Finished Goods
Inventory
16. A journal entry includes a debit to Work in Process
Inventory and a credit to
Raw Material Inventory. The explanation for this would be
that
a) indirect material
was placed into production
b) raw material was
purchased on account
c) direct material was placed into production
d) direct labour was
used for production
17. The use of indirect material would usually be reflected
as an increase in
a) Stores control
b) Work in process control
c) Manufacturing
overhead applied
d) Manufacturing overhead control
18. When employees assemble products
a) Cost of goods
manufactured decreases
b) Work in progress inventory increases
c) Work in process
inventory decreases
d) Manufacturing overhead decreases
19. Material amounting to ` 58,300 is purchased on credit.
The entry in Cost Ledger
under non-integrated System is
a) Purchases A/c Dr. 58,300
To Sundry Creditors A/c
58,300
b) Stores Ledger Control A/c Dr. 58,300
To General Ledger Adjustment 58,300
c) Purchases A/c Dr. 58,300
To Cost Ledger control A/c 58,300
d) Work-in-progress Control A/c Dr. 58,300
To General Ledger Adjustment A/c 58,300
20. Salaries and wages amounting to ` 62,100 gross and earned
by the employees,
and deductions of ` 5,400 as provident fund. ` 2,400 as ESIC
and ` 4,300 as
Income Tax are made from the gross amount. The entry in Cost
Ledger under non integrated System is
a) Salaries and Wages Control A/c Dr. 62,100
To General Ledger Adjustment A/c 62,100
b) Salaries and Wages Control A/c Dr. 50,000
To General Ledger Adjustment A/c 50,000
c) Salaries and Wages Control A/c Dr. 62,100
To Cost Ledger Adjustment A/c
62,100
d) Salaries and Wages Control A/c Dr. 62,100
To Provident Fund A/c
5,400
To E.S.I.C. A/c
2,400
To Income-tax A/c
4,300
To General Ledger Adjustment A/c 50,000
21.The following documents are used in accounting for raw
materials:
(i) Goods received note
(ii) Materials returned note
(iii) Materials requisition note
(iv) Delivery note
Which of the documents may be used to record raw materials
sent back to stores
from production?
a) (i) and (ii)
b) (i) and (iv)
c) (ii) only
d) (ii) and (iii)
22. The Work-in-Progress Control Account is not debited
with:
a) direct materials and direct labour
b) direct expenses
c) production
overheads (recovered)
d) selling and distribution overheads
23. The application of factory overheads usually would be
recorded as an increases
in
a) Cost of goods sold
b) Work-in-progress control
c) Factory overheads control
d) Finished goods control
24. The debit balance of the overheads adjustment account
may be transferred to
a) Cost of sales
account
b) Profit and loss account
c) Finished goods
account
d) Work-in-progress account
25. Materials lost in stores due to fire is
a) a part of normal
loss and hence part of cost
b) capitalized
c) a part of abnormal loss and hence excluded from cost
d) transferred to the next period
26. The Finished Goods account contains the cost of all
units
a) Unfinished at a
given point in time
b) Completed at a given point in time
c) Produced during a particular period
d) Produced and sold during a particular period
27.When production has been completed what double-entry
would be made in a cost
accounting system?
Debit
Credit
a) Cost of Sales
Finished Goods
b) Finished Goods
Work-in-Progress
c) Finished Goods
Cost of Sales
d) Work-in-Progress
Finished Goods
28.The raw materials issued to a job were overestimated and
the excess is being sent
back to the materials store. What document is required?
a) Stores credit note
b) Stores debit note
c) Materials returned note
d) Materials transfer note
29.When goods are sold, what double-entry would be made to
record the transfer of
costs?
Debit
Credit
a) Finished Goods Account
Cost of Sales Account
b) Sales Account
Cost of Sales Account
c) Cost of Sales Account
Sales Account
d) Cost of Sales Account
Finished Goods Accoun
30. The work in process account is credited when
a) Production of product is completed
b) Products are sold to customers
c) Completed goods
are shipped to buyers
d) Costs of production are incurred
31. Contract costing is a basic method of
a) Historical costing
b) Specific order costing
c) Process costing
d) Standard costing
32. Contract costing usually applicable in
a) Constructional Works
b) Textile Mills
c) Cement Industries
d) Chemical Industries
33. Which one of the following is not a contract cost?
a) Direct wages
b) Depreciation of plant
c) Sub-contractor’s
fees
d) Architects’ certificates
34. The degree of completion of work is determined by
comparing the work
certified with
a) Contract price
b) Work in progress
c) Cash received on
contract
d) Retention money
35. In contract costing credit is taken only for a part of
the profit on
a) Completed contract
b) Incomplete contract
c) Work uncertified
d) Work Certified
36. Retention Money is equal to
a) Work certified
Less Work uncertified
b) Contract price Less Work certified
c) Work certified Less Payment received by contractor
d) None of the above
37. Material supplied by the Contractee
a) is debited to the
Contract Account
b) is ignored in the Contract Account
c) is credited to the
Contract Account
d) is debited to the Contractee’s Account
38. Cost of material lost or destroyed
a) is credited to the Contract Account
b) is debited to the Contract Account
c) is debited to the
Costing Profit and Loss Account
d) is credited to the
Costing Profit and Loss Account
39. Work Certified is valued at
a) Cost Price
b) Market price
c) Cost or market
price whichever is less
d) Estimated price
40. Value of Work Certified Less Profit =
a) Work-in-progress
b) Cost of Work Certified
c) Retention Money
d) Cost of uncertified work
41. Notional Profit is equal to
a) Work certified Less Cost of work certified
b) Work certified
Less Cost of work completed
c) Payment received
Less Work certified
d) None of the above
42.The debit balance of the overheads adjustment account may
be transferred to
a) Cost of sales account
b) Profit and loss account
c) Finished goods account
d) Work-in-progress account
43. Materials lost in stores due to fire is
a) a part of normal loss and hence part of cost
b) capitalized
c) a part of abnormal loss and hence excluded from cost
d) transferred to the next period
44.T Company completed two jobs whose costs total to
`1,20,000. Which one of the
following is one effect of this transaction?
a) Manufacturing Overhead increases by ` 1,20,000
b) Cost of Goods Sold increases by ` 1,20,000
c) Work in Process decreases by ` 1,20,000
d) Finished Goods decreases by ` 1,20,000
45. Manufacturing overhead has an under allocated balance of
` 6,200; raw materials
inventory balance is ` 50,000; work in process inventory is
` 30,000; finished
goods inventory is ` 20,000: and cost of goods sold is `
1,00,000.
Which of these accounts would have a closing credit balance?
a) Raw materials inventory
b) Finished goods inventory
c) Work in process inventory
d) None of the above
46.The entry to record cost of goods sold includes a credit
to
a) Cost of Goods Sold
b) Finished Goods Inventory
c) Sales
d) Work in Process Inventory
47. Material supplied by the Contractee
a) is debited to the Contract Account
b) is ignored in the Contract Account
c) is credited to the Contract Account
d) is debited to the Contractee's Account
48. Cost of material lost or destroyed
a) is credited to the Contract Account
b) is debited to the Contract Account
c) is debited to the Costing Profit and Loss Account
d) is credited to the Costing Profit and Loss Account
49.Work Certified is valued at
a) Cost price
b) Market price
c) Cost or market price whichever is less
d) Estimated price
50.Value of Work Certified Less Profit =
a) Work-in-progress
b) Cost of Work Certified
c) Retention Money
d) Cost of uncertified work
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