Quick Questions Memory Booster

Question 1

Financial accounts are summarised for the year at the (Week, Month, Year) end ?

Answer 1

Year end

Question 2

Management accounting reports are usually available to (Internal, External) users ?

Answer 2

Internal users

Question 3

Financial accounting reports are usually available to (Internal, External) users ?

Answer 3

External users

Question 4

Composite cost units are units of output that are made up of (One, Two, Three, Four) variables

Answer 4

Two

Question 5

True or False

Financial account statements have to be in a set format following rules.

Answer 5

True - this is only for financial accounting, management accounting can be more flexible and can be tailored to each busienss

Question 6

(Management, Financial) accounting’s purpouse is to assist in decision making, planning and control ?

Answer 6

Management

Question 7

True or False

Both management and financial accounting use the same data to create their reports.

Answer 7

True - management and financial accounting use the same data but the outcome of the data is different

Question 8

As well as charging costs to cost units, they also need to be charged to a (Profit, Revenue, Cost, Investment) centre ?

Answer 8

Cost centre

Question 9

True or False

Most cost centres can not become profit centres.

Answer 9

True - Most cost centres provide support services within the business so do not contribute directly with the revenue

Question 10

Profit centres are segments of a business to which ………. can be charged, …………… can be identified and …………….. can be calculated ?

(Profit, Cost, Revenue)

Answer 10

1. Costs
2. Revenue
3. Profit

Question 11

Shop departments, restaurants, coffee shops are all examples of (Cost, Profit, Revenue, Investment) centres ?

Answer 11

Revenue centres

Question 12

(Cost, Profit, Revenue, Investment) centres compare the profit with the amount of money invested into the centre ?

Answer 12

Investment centres

Question 13

Materials, labour & expenses are (Nature, Element, Function, Behaviour) clasiffications of costs ?

Answer 13

Element classification

Question 14

Direct & indirect are (Nature, Element, Function, Behaviour) clasiffications of costs ?

Answer 14

Nature classification

Question 15

(Capital, Revenue) Expenditure is Money spent on long-term assets ?

Answer 15

Capital expenditure

Question 16

(Capital, Revenue) Expenditure are Short-term expenses for supplies, repairs, and other operating costs that do not add value to an asset ?

Answer 16

Revenue expenditure

Question 17

(Capital, Revenue) expenditures yield returns over an extended period, while (Capital, Revenue) expenditures are continuous costs of day-to-day operations ?

Answer 17

1. Capital
2. Revenue

Question 18

Production, administration, sales & finance are all part of the (Element, Nature, Function, Behaviour) cost classification ?

Answer 18

Function

Question 19

True or False

All costs increase/decrease directly in line with decreases/increases in output.

Answer 19

False - Costs have 4 different types of behaviour; Variable, Semi-Variable, Fixed, Stepped-Fixed

Question 20

(Fixed, Variable, Semi-Variable) Costs remain the same at different levels of output ?

Answer 20

Fixed costs

Question 21

For fixed costs, the cost per unit (Rises, Falls) as output increases ?

Answer 21

Falls - This is because the fixed costs dont change so as outpurt rises there are more units to spread the costs across but the cost remains the same.

Question 22

True or False

All fixed costs can be identified as stepped fixed costs as in the long term they all increase.

Answer 22

False - Stepped fixed costs are identified in their own bracket as they increase by a large amount all at once

Question 23

(Fixed, Variable, Semi-Variable) Costs rise directly with the increase of output ?

Answer 23

Variable costs

Question 24

(Period/Product) costs are costs that become a part of the manufactured product, this consists of, direct materials, labour & expenses if any ?

Answer 24

Product cost

Question 25

**(Period/Product)** costs are costs that are not part of the manufactured product and can not be assigned to products or closing inventory ?

Answer 25

Period cost

Question 26

**(Perpetual inventory, Just in time, formulas)** records the receipt and issue of inventory as the items pass in and out of the business ?

Answer 26

Perpetual inventory

Question 27

**(Perpetual inventory, Just in time, formulas)** is the ordering method where supplies of components are delivered to the production line just as they are needed ?

Answer 27

Just in time

Question 28

When valuing inventory a business should choose the **(Higher, Lower)** of the buying and selling price ?

Answer 28

Lower

Question 29

**(FIFO, AVCO)** is the inventory valuation method where the oldest cost price is used first ?

Answer 29

FIFO

Question 30

**(FIFO, AVCO)** is the inventory valuation method where an average cost is calculated ?

Answer 30

AVCO

Question 31

***True or False*** Labour cost falls under the element clasification of costs.

Answer 31

**True** - It is one of the three elements of cost, the others being materials and expenses

Question 32

**(Piecework rate, Time rate, Bonus system)** is also known as basic pay and is where the employee is paid on the basis of time spent at work ?

Answer 32

Time rate

Question 33

**(Bonus system, Time rate, Piecework rate)** is where the employee is paid an agreed amount ($) for each task carried out or for each unit of output completed ?

Answer 33

Piecework rate

Question 34

**(Time rate, Piecework rate, Bonus system)** is a combination of time taken and work done ?

Answer 34

Bonus system

Question 35

**(Route card, Job card, Clock card, Time sheets)** are where employees record the amount of hours they have worked

Answer 35

**Time sheets** - These are usually in the form of an excel document.

Question 36

***True or False*** Employees dont need to know or understand how their pay is calculated.

Answer 36

**False** - Good labour payment methods need to be easy for the employee to understand how their pay is calculated

Question 37

***True or False*** The bonus payment method is the only method that encourages employees to work harder.

Answer 37

**False** - The piecework payment method also encourages employees to work harder as payment is directly related to output

Question 38

***True or False*** Under certain circumstances the labour costs of production-line employees can be classed as an indirect cost.

Answer 38

**True** - If there is any idle time due to no fault of the employee this can be classed as an indirect cost as well as overtime premiums

Question 39

Overheads that belong entirely to one particular centre must be **(Apportioned, Allocated)** ?

Answer 39

Allocated

Question 40

We need to **(Apportion, Allocate)** overheads that have been shared across multiple responsibility centres ?

Answer 40

Apportion

Question 41

Overheads from wages of a supervisor that works in one particular responsibility centre need to be **(Apportioned, Allocated)** ?

Answer 41

Allocated

Question 42

***True or False*** You can apportion / allocate overheads to cost centres ?

Answer 42

**False** - You can not do this as cost centres dont have cost units to which the overheads can be charged

Question 43

Unit costing is the cost incurred to produce **(Multiple, One, Two)** cost object ?

Answer 43

One

Question 44

**(Job, Service, Unit, Batch)** & **(Job, Service, Unit, Batch)** costing are the two specific order costing methods ?

Answer 44

Job & Batch costing

Question 45

Job and batch costing are used in conjunction with **(Marginal, Prime, Absorption)** costing to recover the costs of the overheads ?

Answer 45

Absorption

Question 46

Car repairs, house extenders & vehicle modding businesses would all be examples of businesses that use **(Job, Service, Unit, Batch)** costing ?

Answer 46

Job costing

Question 47

**(Job, Service, Unit, Batch)** costing is used when each job can be seperatley identified from other jobs and costs are charged to the job ?

Answer 47

Job costing

Question 48

**(Job, Service, Unit, Batch)** costing is used where the output consists of a number of identical items all produced at the same time ?

Answer 48

Batch costing

Question 49

**(Job, Service, Unit, Batch)** & **(Job, Service, Unit, Batch)** are the two continuous work costing methods ?

Answer 49

Service & Unit costing

Question 50

**(Job, Service, Unit, Batch)** costing is used by businesses that continuously produce a single product, here the cost objects are identical and have the same costs ?

Answer 50

Unit costing

Question 51

***True or False*** In some businesses (mostly manufacturing) it is normal to have some wastage to an extent ?

Answer 51

**True** - If you are making carpets you wont be able to use all the material involved in creating the final output as it will need to be trimmed ect.

Question 52

**(Normal, Abnormal)** wastage is included as part of the cost of the output ?

Question 53

**(Marginal, Absorption)** costing is used to help with short term decision making ?

Answer 53

Marginal

Question 54

**(Marginal, Absorption)** costing is used to calculate inventory valuations and profit ot loss in financial statements ?

Answer 54

Absorption

Question 55

**(Period, Product)** costs are costs that become part of the manufactured product ?

Answer 55

Product

Question 56

**(Period, Product)** costs are costs that can not be directly assigned to the manufactured product

Answer 56

Period

Question 57

To help with short term decision making, costs are classified by their **(Nature, Element, Behaviour, Function)** ?

Answer 57

Behaviour

Question 58

A budget that remains the same whatever the level of activity is a **(Fixed, Flexible)** budget ?

Answer 58

Fixed budget

Question 59

Budgets that change with the level of activity and takes into account different cost behaviour patterns is a **(Fixed, Flexible)** budget ?

Answer 59

Flexible budget

Question 60

If actual costs are lower than budgeted costs the variance is **(Adverse, Favourable)** ?

Answer 60

Favourable variance

Question 61

If actual costs are higher than budgeted costs the variance is **(Adverse, Favourable)** ?

Answer 61

Adverse Variance

Question 62

If the actual revenue is higher than the budgeted revenue the variance is **(Favourable, Adverse)** ?

Answer 62

Favourable variance

Question 63

If the actual revenue is lower than the budgeted revenue the variance is **(Favourable, Adverse)** ?

Answer 63

Adverse variance

Question 64

Budgets that are continually kept up-to-date by adding a new budget period once the most recent budget period it completes is a **(Flexible, Fixed, Rolling)** budget ?

Answer 64

Rolling budget

Question 65

Costs that can be changed by a decision are **(Irrelevant, Relevant)** costs ?

Answer 65

Relevant cost

Question 66

If a cost is not affected by a decision the cost is classed as a **(Irrelevant, Relevant)** cost ?

Answer 66

Irrelevant cost