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Cost Acc > Mcq > Flashcards

Mcq Flashcards

1
Q
  1. According to CIMA, England, “the technique and process of ascertaining cost” is called

a. Costing
b. Cost Accounting
c. Cost Accountancy
d. Cost

A

A

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2
Q
  1. Which among the following costs are not useful for managerial decision making?

a. Sunk Cost
b. Marginal Cost

c. Standard Cost
d. None of the above

A

A

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3
Q
  1. The main function of cost accounting is
    reporting

a. Internal
b. External

c. Government
d. Bank

A

A

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4
Q
  1. The principle of matching costs with revenues is known as
    principle.

a. Cost
b. Matching

c. Consistency
d. Revenue

A

A

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5
Q
  1. In cost accounting, stock is valued at

a. Market price
b. Cost price

c. Selling price
d. Standard price

A

B

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6
Q
  1. The installation of a
    system will create confidence in the minds of public about the
    fairness of the prices charged.

a. Costing
b. Financial accounting
c. Management accounting
d. Information

A

A

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7
Q
  1. The exact cause of increase or decrease in profit or loss is disclosed by

a. Management
accounting
system
b. Financial accounting system
c. Cost accounting system
d. Management
information
system

A

C

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8
Q
  1. Data required for the fixation of selling price is provided by

a. Management accounting system
b. Financial counting system
c. Cost accounting system
d. All of these

A

C

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9
Q
  1. Cost accounting has developed due to the
    of financial accounting

a. Advantages
b. Limitations

c. Merits
d. Expansion

A

B

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10
Q
  1. The main objective of cost accounting is

a. Recording of cost
b. Fixation of selling price

c. Cost control
d. Maximise profit

A

C

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11
Q

12.
is the application of costing and cost accounting principles, methods and techniques
to the art, science and practice of cost control and the ascertainment of profitability.

a. Cost accounting
b. Cost accountancy
c. Cost Control
d. Cost Ascertainment

A

B

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12
Q
  1. Cost accountancy is considered an art because it

a. Has systematic body of
knowledge
b. requires necessary ability and
skills
c. involves continuous efforts of
cost accountant
d. None of the above

A

B

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13
Q

14.
Which of the following statements are not true regarding cost accounting?

a. Information obtained is used by management for decision making
b. Stock is valued at cost
c. Deals partly with facts & partly with estimates
d. Accounts are mandatory according to Companies Act and IT Act

A

D

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14
Q
  1. “The amount of expenditure (actual or notional) incurred or attributable to a given thing” is

a. Expense
b. Revenue expenditure

c. Cost
d. Value

A

C

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15
Q
  1. Cost accountancy is considered a science because

a. It has a systematic body of
knowledge
b. It requires necessary ability
and skills

c. Involves continuous efforts of
a cost accountant
d. None of the above

A

A

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16
Q

17.
is a “measurement in monetary terms of the amount of resources used for some
purpose”.

a. Cost
b. Revenue expenditure

c. Expense
d. Value

A

A

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17
Q
  1. Cost accounting mainly helps the management in

a. Earning profit
b. Providing information to
management

c. Fixing prices of the products
d. All of the above

A

B

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18
Q

19.
. is that portion of expired cost resulting from a productive usage of an asset.

a. Cost
b. Expense

c. Loss
d. None of these

A

B

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19
Q
  1. Expired cost is recorded in

a. Balance Sheet
b. Profit & Loss A/c

c. Cash flow statement
d. None of the above

A

B

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20
Q
  1. Unexpired cost is recorded in

a. Balance Sheet
b. Profit & Loss A/c

c. Cash flow statement
d. None of the above

A

A

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21
Q

22.
. is that portion of expired cost resulting from the decline in the service potential of an
asset that generated no benefit to the firm.

a. Cost
b. Expense
c. Loss
d. None of the above

A

C

22
Q

23.
is a location, person or item of equipment (or group of these) for which costs may be
ascertained and used for the purpose of control.

a. Cost centre
b. Revenue centre
c. Profit centre
d. Responsibility centre

A

A

23
Q

24.
is the segment of activity of a business which is responsible for both revenue and
expenses.

a. Cost centre
b. Revenue centre
c. Profit centre
d. Responsibility centre

A

C

24
Q

25.
is a small segment of activity or responsibility for which cost are accumulated.

a. Cost centre
b. Revenue centre
c. Profit centre
d. Responsibility centre

A

A

25
Q

26.
cost centre consists of a group of persons like foremen, storekeeper, etc.

a. Personal
b. Production
c. Process
d. Impersonal

A

A

26
Q

27.
cost centre consists of allocation or an item of equipment or a group of these.

a. Operation
b. Personal
c. Production
d. Impersonal

A

D

27
Q

28.
cost centre consists of persons or machines carrying out similar operations.

a. Operation
b. Personal
c. Production
d. Impersonal

A

A

28
Q

29.
consists of a process or a continuous sequence of operations.

a. Service cost centre
b. Operation cost centre
c. Process cost centre
d. Production cost centre

A

C

29
Q
  1. Which cost centre undertakes production of a product i.e. conversion of raw materials into
    finished products?

a. Service cost centre
b. Operation cost centre
c. Process cost centre
d. Production cost centre

A

D

30
Q
  1. Centres like maintenance department and power supply department which provide services toother departments of an organisation is called

a. Operation cost centre
b. Impersonal cost centre
c. Process cost centre
d. Service cost centre

A

D

31
Q
  1. Segment of activity of a business which is responsible for both revenue and cost is

a. Responsibility centre
b. Revenue centre

c. Profit centre
d. Cost centre

A

C

32
Q
  1. Which is not true about a profit centre?

a. Segment responsible for both revenue and cost

b. Created to delegate responsibility and measure their performance
c. Each profit centre has a profit target
d. It is not autonomous

A

C

33
Q
  1. Segment or unit of an organisation having accountability to a higher authority for
    performance of function assigned and costs incurred is

a. Responsibility centre
b. Revenue centre
c. Profit centre
d. Cost centre

A

A

34
Q
  1. A responsibility centre in which inputs are measured in monetary terms and outputs not
    recorded is called

a. Expense Centre
b. Profit centre
c. Investment centre
d. None of the above

A

A

35
Q
  1. Responsibility centre in which performance is measured on the basis of return on investment:

a. Expense Centre
b. Profit centre
c. Investment centre
d. None of the above

A

C

36
Q
  1. A responsibility centre where performance is judged on the basis of costs incurred is called

a. Expense Centre
b. Profit centre
c. Investment centre
d. None of the above

A

A

37
Q
  1. According to CIMA, England, “a unit of product, service or time in relation to which cost
    may be ascertained or expressed” is called

a. Cost centre
b. Cost
c. Cost unit
d. None of the above

A

C

38
Q
  1. Costs incurred in the past and has no effect on future decision making is called

a. Opportunity cost
b. Imputed cost
c. Conversion cost
d. Sunk Cost

A

D

39
Q
  1. Costs which do not involve any cash outlay is called

a. Out of stock cost
b. Conversion cost
c. Imputed cost
d. Discretionary cost

A

C

40
Q
  1. “The value of a benefit sacrificed in favour of an alternative course of action” is

a. Sunk cost
b. Opportunity cost
c. Imputed cost
d. Notional cost

A

B

41
Q
  1. If an owned building is used for a business project, the likely rent of the building receivable if
    let out is an example of

a. Sunk cost
b. Imputed cost

c. Opportunity cost
d. Notional cost

A

C

42
Q
  1. Cost incurred due to shortage of stock is known as

a. Imputed cost
b. Urgent cost

c. Abnormal cost
d. Out of stock cost

A

D

43
Q
  1. Depreciation on machinery is an example of

a. Imputed cost
b. Opportunity cost

c. Shut down cost
d. Discretionary cost

A

C

44
Q
  1. Cost incurred even after shutting down of plant or temporary stoppage of production is

a. Shut down cost
b. Imputed cost
c. Opportunity cost
d. Discretionary cost

A

A

45
Q
  1. Costs to be incurred to avoid the hampering of production is called

a. Out of stock cost
b. Shut down cost
c. Discretionary cost
d. Urgent cost

A

D

46
Q
  1. Cost that arises from top management policies and controlled by the management is called

a. Expired cost
b. Discretionary cost
c. Standard cost
d. Marginal cost

A

B

47
Q
  1. Costs which can be shifted or postponed to a future period without affecting the efficiency of
    current production is called

a. Carrying cost
b. Postponable cost
c. Research cost
d. Out of Pocket cost

A

B

48
Q
  1. Cost of money locked up in inventory, inventory obsolescence, etc. are examples of

a. Normal Cost
b. Carrying cost

c. Unavoidable cost
d. Marginal cost

A

B

49
Q
  1. Costs incurred for the maintenance of inventory is called

a. Carrying cost
b. Ordering cost

c. Period cost
d. Explicit cost

A

A

50
Q
  1. The information provided by financial statements is
    in nature.

a. Standard
b. Historical
c. Marginal
d. Uniform

A

B

Cost Acc (2 decks)

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