Cost and Management Accounting Multiple Choice Questions#2

NOTE: Attempt all Questions to see the Result at the bottom of this page.

  1. 1)

    Which of the following document evidences the transaction of purchase of material?

    • A) Material requisition
    • B) Store requisition
    • C) Purchase order
    • D) Purchase invoice

  2. 2)

    The cost that is subject to actual payment or will be paid for in future is called:

    • A) Fixed cost
    • B) Step cost
    • C) Explicit cost
    • D) Imputed cost

  3. 3)

    FIFO is the abbreviation of:

    • A) Final Interest-Free Option
    • B) First in First out Method
    • C) None of the given options
    • D) Fixed income Financial Operations

  4. 4)

    Which of the following industries would most likely use a Process cost Accounting system?

    • A) Construction
    • B) Beer
    • C) Hospitality
    • D) Consulting

  5. 5)

    Which of the following is the best description of zero-base budgeting?

    • A) Zero-base budgeting is a technique applied in government budgeting in order to have a neutral effect on policy issues
    • B) Zero-base budgeting requires a completely clean sheet of paper every year, on which each part of the organization must justify the budget it requires
    • C) Zero-base budgeting starts with the figures of the previous period and assumes a zero rate of change
    • D) Zero based budgeting is an alternative name of flexible budget

  6. 6)

    The point at which the cost line intersects the sales line will be called:

    • A) Budgeted sales
    • B) Break Even sales
    • C) Margin of safety
    • D) Contribution margin

  7. 7)

    A store ledger card is similar to the .

    • A) Stock ledger
    • B) Material card
    • C) Purchase requisition card
    • D) Bin card

  8. 8)

    ___________is the cost that is incurred at the time of making transaction.

    • A) Product Cost
    • B) Period Cost
    • C) Sunk Cost
    • D) Historical Cost

  9. 9)

    The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?

    • A) First to be allocated to the ending inventory
    • B) Last to be allocated to the cost of goods sold
    • C) Last to be allocated to the ending inventory
    • D) First to be allocated to the cost of good sold

  10. 10)

    What will be the impact of normal loss on the overall per unit cost?

    • A) Per unit cost will increase
    • B) Per unit cost will decrease
    • C) Per unit cost remain unchanged
    • D) Normal loss has no relation to unit cost