When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to ..

1/3rd of notional profit x cash received work certified

of notional profit x cash received work certified

2/3rd of notional profit x cash received work certified

78 + Mcqs in Cost and Management Accounting (CMA) in Bachelor of Business Administration (BBA) Page 1 McqOptions

1.	.includes financial and cost accounting, tax planning and tax accounting.
A.	financial accounting
B.	cost accounting
C.	management accounting
D.	none of these
Answer» D. none of these

Discussion

2.	Cost Accounting has been developed becauseof .........................of Financial Accounting.
A.	limitations
B.	advantages
C.	both a & b
D.	none of these
Answer» B. advantages

Discussion

3.	The ordinary trading account is a locked storehouse of most valuable information to which cost system is the .
A.	key
B.	lock
C.	house
D.	none of these
Answer» B. lock

Discussion

4.	Cost accounting provides detailed information about .................................of various products, processes, services and operations.
A.	costs
B.	income
C.	either a or b
D.	none of these.
Answer» B. income

Discussion

5.	Unsuccessful research expenditure should be ......................... cost accounts.
A.	excluded from
B.	included in
C.	apportioned in
D.	none of these
Answer» B. included in

Discussion

6.	.........................Accounting is not only a positive science but also a normative science because it includes techniques of budgetary controland standard costing.
A.	financial
B.	cost
C.	both a & b
D.	none of these
Answer» C. both a & b

Discussion

7.	If the amount of work certified is less than ......... of the contract price, then no profit should be taken to Profit & Loss Account.
A.	20%
B.	25%
C.	33 1/3%
D.	40%
Answer» C. 33 1/3%

Discussion

8.	When actual loss is less than the estimated loss, the difference between the two is considered to be
A.	abnormal gain
B.	abnormal loss
C.	normal loss
D.	income
Answer» B. abnormal loss

Discussion

9.	When the actual loss is more than the estimated loss, the difference between the two is considered to be ..
A.	abnormal loss
B.	normal loss
C.	loss
D.	none of these
Answer» B. normal loss

Discussion

10.	Under step method of re-apportionment of costs of service departments, the cost of last service department is apportioned only to the ..
A.	production departments
B.	service departments
C.	both a & b
D.	none of these
Answer» B. service departments

Discussion

11.	Inventory turnover ratio = Cost of ..during the period Cost of average inventory held during the period.
A.	inventory consumed
B.	minimum inventory
C.	maximum inventory
D.	none of these
Answer» B. minimum inventory

Discussion

12.	is a technique of stock control which leads to saving of time of the management because attention is required to be paid only to some of the items rather than on all the items.
A.	abc analysis
B.	jit inventory system
C.	ved analysis
D.	perpetual inventory system
Answer» B. jit inventory system

Discussion

13.	Under marginal costing, stocks of finished goods and work-in-process are valued at .. costs only
A.	variable cost
B.	fixed cost
C.	marginal cost
D.	none of these
Answer» D. none of these

Discussion

14.	.......................Under marginal costing, costs are treated as period costs and charged to profit and loss account for the period for which they are incured.
A.	variable cost
B.	fixed cost
C.	both of these
D.	none of these
Answer» C. both of these

Discussion

15.	In process costing, the abnormal loss is treated as .............. cost and written off to profit & loss account.
A.	unit
B.	period
C.	future
D.	process
Answer» C. future

Discussion

16.	..arises where the actual process loss is less than the normal predetermined process loss.
A.	normal loss
B.	abnormal loss
C.	abnormal gain
D.	none of these
Answer» D. none of these

Discussion

17.	The sum of value of work certified and uncertified appearing in the Contract Account is called ..
A.	work in progress
B.	work in process
C.	work completed
D.	work done.
Answer» B. work in process

Discussion

18.	When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to ..
A.	1/3rd of notional profit x cash received work certified
B.	of notional profit x cash received work certified
C.	2/3rd of notional profit x cash received work certified
D.	full notional profit.
Answer» D. full notional profit.

Discussion

19.	An input of 5000kg of material introduced into the process and the expected loss is 8% and if the actual output from the process is 4300, the abnormal loss is................. kg
A.	400
B.	300
C.	500
D.	600
Answer» C. 500

Discussion

20.	budget gives an estimate of the anticipated receipts and payment of cash during the budget period.
A.	sales
B.	production
C.	cash
D.	master
Answer» D. master

Discussion

21.	is one which can be conveniently identified with and charged to a particular unit of cost.
A.	direct cost
B.	indirect cost
C.	overhead
D.	none of these
Answer» B. indirect cost

Discussion

22.	The .....................costing is applied when a quantity of similar and identical products are manufactured together as one Job.
A.	job
B.	batch
C.	operation
D.	output
Answer» C. operation

Discussion

23.	Economic Batch Quantity is an important point to be determined in industries where...................... costing is employed.
A.	job
B.	batch
C.	operation
D.	output
Answer» C. operation

Discussion

24.	Machine hour rate is obtained by dividing the total running expenses of a machine during a particular period by the
A.	number of hours
B.	number of products produced
C.	number of workers
D.	wages
Answer» B. number of products produced

Discussion

25.	When 1000 units are 60% complete in a process, it is equivalent to .completed units.
A.	60
B.	600
C.	6000
D.	1000
Answer» C. 6000

Discussion

26.	The primary emphasis of.......................... cost is on the planning function of management.
A.	budgeted
B.	standard
C.	period
D.	none of these
Answer» B. standard

Discussion

27.	The method of costing applied in biscuit industries is...................costing and in steel industry ............. costing.
A.	job, process
B.	job, contract
C.	batch, multiple
D.	process, operation
Answer» B. job, contract

Discussion

28.	Under Merrick s multiple piece rate system, 110% of the ordinary piece rate is given to workers whose level of performance is between . of the standard output.
A.	83% and 100%
B.	100% and 120%
C.	0% and 83%
D.	none of these
Answer» B. 100% and 120%

Discussion

29.	budget is the most important budget and it forms the basis on which all the other budgets are built up.
A.	production
B.	material
C.	cash budget
D.	sales
Answer» E.

Discussion

30.	The cost of......................process loss is absorbed in the cost of production of good units.
A.	abnormal
B.	normal
C.	both a & b
D.	none of these
Answer» C. both a & b

Discussion

31.	Fixed cost per unit with rise in output and with fall in output.
A.	decreases, increases
B.	increases, decreases
C.	is constant, remains same
D.	none of the above
Answer» B. increases, decreases

Discussion

32.	A bus carries 25 passengers daily for 25 days and its mileage per month is 1000 kms. Its passenger miles are
A.	30,000
B.	12,500
C.	20,000
D.	25,000
Answer» E.

Discussion

33.	Budgeting system ................ key managerial functions. School of Distance Education Cost Accounting Page 20
A.	dismisses
B.	integrates
C.	discharges
D.	none of these
Answer» C. discharges

Discussion

34.	Under Merrick s multiple piece rate system, ordinary piece rate is given to workers whose level of performance is between ........................of the standard output.
A.	0% and 100%
B.	0% and 120%
C.	0% and 83%
D.	none of these
Answer» D. none of these

Discussion

35.	Under Merrick s multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between ........................of the standard output.
A.	83% and 100%
B.	100% and 120%
C.	0% and 83%
D.	none of these
Answer» C. 0% and 83%

Discussion

36.	The principle types of inventories are raw materials and , ............and finished goods
A.	processed materials
B.	goods-in-progress
C.	stored goods
D.	goods for dispatch
Answer» C. stored goods

Discussion

37.	.is a budget which is updated continuously by adding a further period (a month/quarter) and deducting a corresponding earlierperiod.
A.	rolling budget
B.	continuous budget
C.	annual budget
D.	both a & b
Answer» E.

Discussion

38.	The budget relating to.................... must be prepared first and the other budgets should be prepared in the light of that factor.
A.	limiting factor
B.	materials
C.	labour
D.	production
Answer» B. materials

Discussion

39.	Such expenses which are included (even though they are not incurred) for taking managerial decisions are called
A.	notional expenses
B.	actual expenses
C.	imputed
D.	none of these
Answer» B. actual expenses

Discussion

40.	..budget is designed to remain unchanged irrespective of the volume of output or turnover attained.
A.	master
B.	fixed
C.	flexible
D.	all of these
Answer» C. flexible

Discussion

41.	An item of cost that is direct for one business may be ......................for another business.
A.	important
B.	direct
C.	indirect
D.	none of the above.
Answer» D. none of the above.

Discussion

42.	The Profit/Volume ratio or marginal ratio expresses the relation of
A.	profit
B.	marginal cost
C.	contribution
D.	none of these
Answer» D. none of these

Discussion

43.	Defectives are that portion of production which can be.............................at some extra cost of re-operation.
A.	sold
B.	rectified
C.	purchased
D.	none of these
Answer» C. purchased

Discussion

44.	is the amount by which the absorbed overheads fall short of the actual amount of overheads incurred.
A.	over absorption of overheads
B.	under absorption of overheads
C.	overheads absorption
D.	none of these.
Answer» C. overheads absorption

Discussion

45.	is the excess of overheads absorbed over the actual amount of overheads incurred.
A.	over absorption of overheads
B.	under absorption of overheads
C.	overheads absorption
D.	none of these.
Answer» B. under absorption of overheads

Discussion

46.	Each job has a ..................... prepared for it that bears the job number and which is used to collect all cost data relating to job.
A.	job time sheet
B.	job cost card
C.	job ticket
D.	job account
Answer» C. job ticket

Discussion

47.	If the present cost of the car is Rs.1,00,000 residual value at the end of the 5th year is Rs.20,000, the monthly depreciation is
A.	rs.20,000
B.	rs.16,000
C.	rs.1,333
D.	rs.17,333
Answer» D. rs.17,333

Discussion

48.	Under piece rate system of wage payment, payment is made according to the
A.	quantity of work done
B.	time
C.	both a&b
D.	none of these
Answer» B. time

Discussion

49.	..is the practice of charging all costs, both variable and fixed , to operations, processes, or products.
A.	marginal costing
B.	absorption costing
C.	differential costing
D.	none of the above
Answer» C. differential costing

Discussion

50.	is the maximum possible alternative earning that might have been earned if the productive capacity is put to some alternativeuse.
A.	opportunity
B.	incremental revenue
C.	alternative revenue
D.	none of these
Answer» B. incremental revenue

Discussion

Explore topic-wise MCQs in Bachelor of Business Administration (BBA).

.includes financial and cost accounting, tax planning and tax accounting.

Cost Accounting has been developed becauseof .........................of Financial Accounting.

The ordinary trading account is a locked storehouse of most valuable information to which cost system is the .

Cost accounting provides detailed information about .................................of various products, processes, services and operations.

Unsuccessful research expenditure should be ......................... cost accounts.

.........................Accounting is not only a positive science but also a normative science because it includes techniques of budgetary controland standard costing.

If the amount of work certified is less than ......... of the contract price, then no profit should be taken to Profit & Loss Account.

When actual loss is less than the estimated loss, the difference between the two is considered to be

When the actual loss is more than the estimated loss, the difference between the two is considered to be ..

Under step method of re-apportionment of costs of service departments, the cost of last service department is apportioned only to the ..

Inventory turnover ratio = Cost of ..during the period Cost of average inventory held during the period.

is a technique of stock control which leads to saving of time of the management because attention is required to be paid only to some of the items rather than on all the items.

Under marginal costing, stocks of finished goods and work-in-process are valued at .. costs only

.......................Under marginal costing, costs are treated as period costs and charged to profit and loss account for the period for which they are incured.

In process costing, the abnormal loss is treated as .............. cost and written off to profit & loss account.

..arises where the actual process loss is less than the normal predetermined process loss.

The sum of value of work certified and uncertified appearing in the Contract Account is called ..

When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to ..

An input of 5000kg of material introduced into the process and the expected loss is 8% and if the actual output from the process is 4300, the abnormal loss is................. kg

budget gives an estimate of the anticipated receipts and payment of cash during the budget period.

is one which can be conveniently identified with and charged to a particular unit of cost.

The .....................costing is applied when a quantity of similar and identical products are manufactured together as one Job.

Economic Batch Quantity is an important point to be determined in industries where...................... costing is employed.

Machine hour rate is obtained by dividing the total running expenses of a machine during a particular period by the

When 1000 units are 60% complete in a process, it is equivalent to .completed units.

The primary emphasis of.......................... cost is on the planning function of management.

The method of costing applied in biscuit industries is...................costing and in steel industry ............. costing.

Under Merrick s multiple piece rate system, 110% of the ordinary piece rate is given to workers whose level of performance is between . of the standard output.

budget is the most important budget and it forms the basis on which all the other budgets are built up.

The cost of......................process loss is absorbed in the cost of production of good units.

Fixed cost per unit with rise in output and with fall in output.

A bus carries 25 passengers daily for 25 days and its mileage per month is 1000 kms. Its passenger miles are

Budgeting system ................ key managerial functions. School of Distance Education Cost Accounting Page 20

Under Merrick s multiple piece rate system, ordinary piece rate is given to workers whose level of performance is between ........................of the standard output.

Under Merrick s multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between ........................of the standard output.

The principle types of inventories are raw materials and , ............and finished goods

.is a budget which is updated continuously by adding a further period (a month/quarter) and deducting a corresponding earlierperiod.

The budget relating to.................... must be prepared first and the other budgets should be prepared in the light of that factor.

Such expenses which are included (even though they are not incurred) for taking managerial decisions are called

..budget is designed to remain unchanged irrespective of the volume of output or turnover attained.

An item of cost that is direct for one business may be ......................for another business.

The Profit/Volume ratio or marginal ratio expresses the relation of

Defectives are that portion of production which can be.............................at some extra cost of re-operation.

is the amount by which the absorbed overheads fall short of the actual amount of overheads incurred.

is the excess of overheads absorbed over the actual amount of overheads incurred.

Each job has a ..................... prepared for it that bears the job number and which is used to collect all cost data relating to job.

If the present cost of the car is Rs.1,00,000 residual value at the end of the 5th year is Rs.20,000, the monthly depreciation is

Under piece rate system of wage payment, payment is made according to the

..is the practice of charging all costs, both variable and fixed , to operations, processes, or products.

is the maximum possible alternative earning that might have been earned if the productive capacity is put to some alternativeuse.