YOUTUBER: SURAJ PATEL EDUCATION
ADVANCED COST ACCOUNTING
M.COM PAER 1
VERY IMPORTANCE MCQ (MUMBAI UNIVERSITY)
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1. Maintenance charges are in the nature of
…………………expenses.
(A) Fixed
(B) Variable
(C) Semi-variable
(D) Constant
ANS. C
2. In transport costing………………charges vary more
or less in direct proportion to Kilometers run.
(A) Running
(B) Petrol
(C) Drivers salary
(D) Tax
ANS. A
3. "……………….. type of loss is caused by the
factors like evaporation, pilferage and which is inherentin large scale
production. This loss cannot be avoided but sure to occur."
(A) Normal Process Loss
(B) Abnormal Process Loss.
(C) Marginal Process Loss.
(D) Nominal Process Loss.
ANS. A
4. The journal entry to record the use of
direct materials on jobs is to debit work in process inventory and credit
(A) Raw materials inventory
(B) Finished goods inventory
(C) Manufacturing overhead
(D) Wages payable
ANS. A
5. Contribution margin is known as _______.
(A) marginal income
(B) gross margin
(C) net income
(D) net profit
ANS. B
6. Ideal product mix is decided in terms of
______.
(A) Variable cost
(B) Sales
(C) Total cost
(D) Marginal cost
ANS. B
7. _______is a managerial device to determine
efficiency and effectiveness of cost performance.
(A) Cost sheet
(B) Zero based budget
(C) Standard costing
(D) Decision making
ANS. C
8. _________are drawn up to measure the success
or failure of the activities in achieving the objectives of the organization.
(A) cash budget
(B) Periodical statements of account
(C) Ledgers
(D) Balance Sheet
ANS. B
9. Every company shall keep at its
________proper books of accounts.
(A) branch office
(B) registered office
(C) regional office
(D) corporate office
ANS. B
10. The following is not a fixed cost ____.
(A) property tax
(B) direct labour cost
(C) insurance premium
(D) factory rent
ANS. B
11. The type of spoilage that should not affect
the cost of inventories is
(a) Abnormal spoilage
(b) Normal spoilage
(c) Seasonal spoilage
(d) Indirect spoilage
ANS. A
12. Materials may not be put into process
(a) At the beginning
of an operation
(b) Continuously
(c) At the end of the operation
(d) In the shipping department.
ANS. D
13. Process cost method is especially suitable
for
(a)Custom production
(b) Standard costs
(c) FIFO
(d) LIFO
ANS. B
14. In process costing, costs follow
(a) Price rise
(b) Price declines
(c) Product flow
(d) Finished goods
ANS. C
15. When average costing is used, the opening
inventory costs are
(a) Kept separate
from the costs for the new period
(b) Added to the
costs of the new period
(c) Subtracted from
the new costs
(d) Averaged with
other costs to arrive at total cost.
ANS. A
16. A disadvantage of FIFO costing is that
(a) The first units produced cannot be distinguished from later
production.
(b) Several units
costs are used at the same time.
(c) The units have
to be kept separate
(d) The shipping
costs are higher
ANS. B
17. Which of the following method of costing
can be used in a large oil refinery?
(a) Process costing
(b) Operating costing
(c) Unit costing
(d) Job costing
ANS. A
18. Which of the following paid is odd :
(a)
Construction-Contract costing
(b)
Ship-building-Job costing
(c) Brick
manufacturing – Process costing
(d) Transport
undertaking – Operating costing
ANS. C
19. A product which has practically no sales or
utility value is
(a) Waste
(b) Scrap
(c) Spoilage
(d) Defectives
ANS. A
20. Trimmings in timber industry should be
treated as a :
(a) Waste
(b) Scrap
(c) Spoilage
(d) Defectives
ANS. B
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21. The type of process loss that should not
affect the cost of inventory is
(a) Abnormal loss
(b) normal loss
(c) Seasonal loss
(d) standard loss
ANS. A
22. The stage where joint products are
separated from each other is known as
(a) break-even point
(b) angle of incidence
(c) split-off point
ANS. C
23. Fifty units are put in a process at a total
cost of Rs. 90. Wastage is normally 10% without any scrap value. If output is
40 units the amount of abnormal loss would be
(a) Rs. 80
(b) Rs. 8
(c) Rs. 10
(d) Rs. 9
ANS. C
24. Abnormal loss is charged to
(a) process account
(b) costing profit and loss account
(c) Normal loss account
ANS. B
25. Classification and accumulation of costs by
fixed and
variable costs is a distinctive feature of
(a) Process costing
(b) Unit costing
(c) Operating costing
(d) Batch costing
ANS. C
26. Composite unit is distinctive feature of
(a) Single or output costing
(b) Process costing
(c) Job costing
(d) Operating costing
ANS. D
27. Electricity generating company should
employ
(a) Unit costing
(b) Process costing
(c) Operating costing
(d) Multiple costing
ANS. C
28. Cinema houses must adopt
(a) Operating costing
(b) Job costing
(c) Batch costing
(d) Contract costing
ANS. A
29. For a library the best method of costing
suitable is
(a) Output costing
(b) Operating costing
(c) Process costing
(d) Multiple costing
ANS. B
30. For an educational institutes the right
method of costing is
(a) Output costing
(b) Job costing
(c) Operating costing
(d) Process costing
AND. B
31. Hospitals must make use of
(a) Operating costing
(b) Batch costing
(c) Process costing
(d) Multiple costing
ANS. A
32. For hotels the best method of costing is
(a) Single or output
(b) Contract costing
(c) Process costing
(d) Operating
costing
ANS. D
33. Air India Co. must make use of
(a) Job costing
(b) Operating
costing
(c) Batch costing
(d) Process costing
ANS. B
34. Indian Railways must adopt
(a) Operating
costing
(b) Unit costing
(c) Batch costing
(d) Multiple costing
ANS. A
35. Public utility undertakings must invariably
adopt
(a) Operating
costing
(b) Output costing
(c) Contract costing
(d) Multiple costing
ANS. D
36. Karnataka Electricity Board must make use
of
(a) Single or output
costing
(b) Job costing
(c) Process costing
(d) Operating cost
ANS. A
37. The method of costing used in case of a gas
company is termed as
(a) Job costing
(b) Process costing
(c) Operating costing
ANS. C
38. Mines `A’ and `B’ are at a distance of 10
kms and 15 kms from the factory. The cost per tone-km in case of mine A is Rs.
3 while it is R. 2.5 in case of mine B. The factory should procure coal from
(a) Mine A only
(b) Mine B only
(c) Both from mines
A and B in the ration of 3 : 2
ANS. A
39. In case of steam company, the cost per unit
is calculated on the basis of
(a) Total quantity of
lbs. produced
(b) Total quantity of kwh. generated
(c) Total quantity of tones produced.
ANS. A
40. Materials Requisition Note
(a) Authorizes and records the issue of materials for use
(b) Records the return of unused materials.
(c) Records the transfer of materials from one store to another
(d) A classified record of materials, issues, returns and transfers.
ANS. A
41. 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.
ANS. C
42. A document which is a classified record of
material issues, returns and transfers.
(a) Materials Requisition Note
(b) Material Return Note
(c) Materials Transfer Note
(d) Materials issue Analysis sheet
ANS. D
43. 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
AND. A
44. 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
AND. B
45. 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
ANS. C
46. In non-integrated system of accounting, the
emphasis is on
(a) Personal accounts
(b) Real accounts
(c ) Nominal accounts
(d) All of these
ANS. C
47. 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
ANS. B
48. Purchases for special jobs is debited to
(a) Work-in-progress ledger control account
(b) Cost ledger control account
(c) Stores ledger control account
ANS. A
49. Notional costs
(a) May be included in interlocking accounts
(b) May be included in integrated accounts
(c) Cannot be included in interlooking accounts
(d) Neither (a) nor (b) or (c)
ANS. A
50. Contribution margin is also known as
a)Variable cost
b) Gross Profit
c) Net Income
ANS. B
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