Explore topic-wise MCQs in Finance & Accounting.

This section includes 2081 Mcqs, each offering curated multiple-choice questions to sharpen your Finance & Accounting knowledge and support exam preparation. Choose a topic below to get started.

1.

Which of the following types of characteristics tend to cause too little overhead costs to be charged to the product using traditional cost allocations?

A. a relatively small product.
B. a relatively low volume product.
C. a relatively simple product.
D. a and b.
Answer» E.
Discussion
2.

A retail firm would normally use an inventory account titled?

A. Finished Goods Inventory
B. Merchandise Inventory
C. Goods in Process Inventory
D. Raw Materials Inventory
Answer» C. Goods in Process Inventory
Discussion
3.

Regardless of how long it takes to produce and sell inventory, inventory is alwaysconsidered to be a?

A. Current asset
B. Current liability
C. Long-term asset
D. Stockholder's equity
Answer» B. Current liability
Discussion
4.

In process costing system, the predetermined overhead rate is computed.

A. Only once and used for all the processing department
B. Separately for each processing department
C. Only for the first processing department where units are started
D. Only for the last department where units are completed and transferred to finished goods area.
Answer» C. Only for the first processing department where units are started
Discussion
5.

Net Purchases equal the invoice amount and?

A. Plus freight-in, plus discounts
B. Less purchase returns, plus purchase allowances
C. Plus freight-in, less purchase discounts
D. Plus discounts, less purchase returns
Answer» D. Plus discounts, less purchase returns
Discussion
6.

______________ is introduced as a technique that aims to manage product costs throughout thedesign stage.

A. Process Costing
B. Product Costing
C. Target Costing
D. Strategic Costing
Answer» D. Strategic Costing
Discussion
7.

In process costing the abnormal loss occurred in a production department is

A. Charged to finished goods
B. Charged to unfinished goods
C. Charged to factory overhead
D. Ignored
Answer» D. Ignored
Discussion
8.

Lean management has been developed with the intention of reducing ________________ andmaximizing the value of the product or the service to the customer.

A. Cost
B. Value Cost
C. Process Waste
D. Profit
Answer» D. Profit
Discussion
9.

In a process costing system, the manufacturing overhead (or factory OH) is usually appliedusing

A. Predetermined overhead rate
B. An actual overhead rate
C. A conversion overhead rate
D. An indirect labor rate
Answer» B. An actual overhead rate
Discussion
10.

Assigning overhead using ABC often:

A. Shifts overhead costs from high-volume products to low-volume products
B. Shifts overhead costs from low-volume products to high-volume products
C. Provides the same results as traditional costing
D. Requires one predetermined overhead rate
Answer» B. Shifts overhead costs from low-volume products to high-volume products
Discussion
11.

____________ means change for the better.

A. Kaizen
B. Theory of Constraints
C. Kanban
D. C. JIT
Answer» B. Theory of Constraints
Discussion
12.

The Cooper/Kaplan "Rule of One" refers to the following:

A. Only one overhead rate should be used to allocate fixed costs.
B. If only one item is represented by an activity cost pool, then the cost can be classified as fixed.
C. If there is more than one activity cost pool, then one of the cost pools must be variable.
D. Traditional cost allocation systems will distort the allocations for at least one cost pool.
Answer» C. If there is more than one activity cost pool, then one of the cost pools must be variable.
Discussion
13.

For decision making purpose, which is more suitable to the management

A. Standard costing
B. Marginal costing
C. Absorption costing
D. Traditional costing
Answer» C. Absorption costing
Discussion
14.

Materials labor and overhead costs are traced to processing departments rather than individual products or jobs. This statement is true for

A. A job order costing system
B. An activity based costing system
C. A process costing system
D. A variable costing system
Answer» D. A variable costing system
Discussion
15.

In FIFO method of inventory valuation?

A. Closing stock is at latest price
B. Issue of stocks to production is at earliest price
C. Both (a) & (b)
D. Neither (a) nor (b)
Answer» B. Issue of stocks to production is at earliest price
Discussion
16.

In process costing system, when partially completed units are expressed in terms of fullycompleted units they are known as

A. Completed units
B. Equivalent units
C. Unfinished units
D. Transferred units
Answer» C. Unfinished units
Discussion
17.

Conversion costs are the sum of:

A. Direct materials costs and direct labor costs
B. Indirect materials costs and indirect labor costs
C. Direct materials costs and overhead costs
D. Direct labor costs and overhead costs
Answer» E.
Discussion
18.

Activity based cost systems would probably provide the greatest benefits for organizations that use

A. Job order costing.
B. Process costing.
C. Historical costing
D. Standard costing.
Answer» B. Process costing.
Discussion
19.

The inventories are recorded at the latest price but the production cost is changedold cost price?

A. FIFO
B. Average
C. Both A & B
D. None
Answer» B. Average
Discussion
20.

Labour productivity measures the growth in value added _____ per unit of labour used.

A. Input
B. Output
C. Cost
D. Energy
Answer» C. Cost
Discussion
21.

Target costing is a ___________ costing methodology, in which the selling price and therequired profit margin are used to determine the allowable cost for manufacturing a new/existing product.

A. Modern
B. Reverse
C. Product
D. Process
Answer» C. Product
Discussion
22.

A production cost report

A. Used to record the costs chargeable to a specific job
B. Shows only cost data for a production department
C. Provides a basis for evaluating the productivity of a department
D. Combines process cost and job order costing systems costs
Answer» D. Combines process cost and job order costing systems costs
Discussion
23.

Inventory does not include?

A. Materials used in the production of goods to be sold
B. Assets intended to be sold in the normal course of business
C. Equipment used in the manufacturing are sold
D. Assets currently in production for normal sales
Answer» D. Assets currently in production for normal sales
Discussion
24.

The latest cost of inventories is changed to production but the old prices are changed to inventories on hand?

A. Average
B. LIFO
C. FIFO
D. Perpetual
Answer» C. FIFO
Discussion
25.

Which type of inventory system is updated inventory system?

A. Periodic inventory system
B. Contingency inventory system
C. LIFO
D. Perpetual inventory system
Answer» E.
Discussion
26.

Marginal costing is a …………….

A. Method of costing
B. Technique of costing
C. Process of costing
D. None of the above
Answer» C. Process of costing
Discussion
27.

Which one of the following methods for inventory valuation may be misleading when the units are identical?

A. FIFO Method
B. LIFO Method
C. Specific Identification Method
D. None
Answer» B. LIFO Method
Discussion
28.

During September, Khan had sales of 148,000, which made a gross profit of 40,000. Purchases amounted to 100,000 and opening inventory was 34,000. The value of closing inventory was?

A. Rs. 24,000
B. Rs. 26,000
C. Rs. 42,000
D. Rs. 54,000
Answer» C. Rs. 42,000
Discussion
29.

Activity-based costing:

A. Uses a plant-wide overhead rate to assign overhead
B. Is not expensive to implement
C. Typically applies overhead costs using direct labor-hours
D. Uses multiple activity rates
Answer» E.
Discussion
30.

Which of the following method is suitable for calculating the cost of inventorywhen actual costs of individual units of merchandise can be determined from the accounting records?

A. FIFO Method
B. LIFO Method
C. Specific Identification Method
D. Average Method
Answer» D. Average Method
Discussion
31.

________________ is an important part of lean thinking.

A. Lean Management
B. Cost Management
C. Strategic Cost
D. Cost Reduction
Answer» B. Cost Management
Discussion
32.

The normal or standard loss in processing department is generally considered

A. An avoidable loss
B. Un avoidable loss
C. An additional loss
D. A basic loss
Answer» C. An additional loss
Discussion
33.

_________ Costing Also known as delayed costing,

A. Backflush
B. Conventional
C. Modern
D. Competitive
Answer» B. Conventional
Discussion
34.

Kaizen is a method aimed at ______ reduction below standard level, but without negative effectson quality, staff, safety, etc.

A. Cost
B. Waste
C. Non – value activities
D. Constraints
Answer» B. Waste
Discussion
35.

Sales revenues are usually considered earned when?

A. Cash is received from credit sales
B. An order is received
C. Goods have been transferred from the seller to the buyer
D. Adjusting entries are made
Answer» D. Adjusting entries are made
Discussion
36.

Margin of safety may be improved by

A. Increasing sales volume
B. Lowering variable cost
C. Lowering fixed cost
D. All of the above
Answer» E.
Discussion
37.

In the situation stated in the question above, the company’s net income based on a productionvolume based system will tend to be ________ relative to net income based on an activity based costing system.

A. Overstated.
B. Understated.
C. Overstated for the low volume product and understated for the high volume product.
D. b and d.
Answer» E.
Discussion
38.

The journal entry that assigns raw materials costs in a process costing system includes

A. Debit to raw materials
B. Credit to raw materials
C. Debit to Accounts Payable
D. Credit to Work in Process
Answer» C. Debit to Accounts Payable
Discussion
39.

Which audience was activity based costing originally designed to serve?

A. Users of external financial statements.
B. Front line managers who plan & control activities or processes on a daily basis.
C. Managers who make short term strategic decisions such as outsourcing.
D. Managers who make long term strategic decisions concerning investments.
Answer» D. Managers who make long term strategic decisions concerning investments.
Discussion
40.

A ______________ is the sequence of phases that a project goes through from its initiation to itsclosure.

A. Product Management
B. Project Management
C. Project Sequencing
D. ProjectLife Cycle
Answer» E.
Discussion
41.

Pareto Principle is ______ rule.

A. 80/20
B. 50/50
C. 60/40
D. 10/90
Answer» B. 50/50
Discussion
42.

Porter argues that the ability to perform particularactivities and to manage the linkages betweenthese activities is a source of _______________ advantage.

A. Cost
B. Competitive
C. Functional
D. Profitability
Answer» C. Functional
Discussion
43.

What does FIFO mean?

A. Finished stock In Finished stock out
B. Fabrications Inward Fabrications Outward
C. Final Input Final Output
D. First In First Out
Answer» E.
Discussion
44.

Marginal costing technique helps the management in deciding

A. Price of the product
B. Make or buy decision
C. To accepts fresh orders at low price
D. All of the above
Answer» E.
Discussion
45.

In LIFO method of inventory valuation?

A. Issue of stocks to production is at latest price
B. Closing stock is at latest price
C. Both (a) & (b)
D. Neither (a) nor (b)
Answer» B. Closing stock is at latest price
Discussion
46.

Backflush costing is an accounting method that records costs after a good is sold or a service is ___________.

A. Initiated
B. Progressed
C. Completed
D. Planned
Answer» D. Planned
Discussion
47.

Plant depreciation is an example of which activity-level group?

A. Unit-level activity
B. Facility-level activity
C. Batch-level activity
D. Product-level activity
Answer» C. Batch-level activity
Discussion
48.

One characteristic of products that are mass-produced in a continuous production processis that

A. The products are identical or very similar in nature.
B. They are grouped in batches.
C. They are produced at the time an order is receiv
Answer» B. They are grouped in batches.
Discussion
49.

Which is not a similarity between job order costing and process costing?

A. Methods of assigned costs
B. Tracking of direct materials, direct labor and manufacturing overhead
C. Accumulating journal entries
D. Flow of costs
Answer» B. Tracking of direct materials, direct labor and manufacturing overhead
Discussion
50.

Which of the following is true at breakeven point

A. Contribution = fixed cost
B. Sales = total cost
C. Sales curve cuts total cost line
D. All of the above
Answer» E.
Discussion