SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting
Sample Questions: Section I: Subjective Questions 1.
How does Subsidiary Book help in accounting process? Which subsidiary books are used very frequently?
2.
Differentiate between the liabilities and assets.
3.
Explain with example the difference between Controllable Cost and Uncontrollable Cost.
4.
1) The process of Secondary Apportionment or distribution of overheads is process of transferring the overheads of non-production departments to the production departments. Write the usual bases, which can be selected for Secondary Apportionment for follwing items of expenditure: (1) Maintenance Dept, (2) Stores Dept, (3) Purchase Dept, (4) Building Service Dept, (5) Welfare/ Canteen and other facilities, (6) Personnel or Time keeping Dept (7) Internal Transport.
5.
Differentiate between Direct and Indirect Cost.
6.
What is Weighted Average Price Method? Is it useful in practice? How?
7.
Explain Absorption. Which factors have to be considered for selecting method for absorbing the overheads?
8.
What is the purpose of preparing the Balance Sheet?
Section II: Objective Questions Multiple Choice Single Response 1.
The disadvantage of 'Going Concern Concept' of the organization, while valuating the assets, market price becomes -. 1] zero 2] more 3] immaterial 4] precious
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting 2.
What is the nature of the labour cost attached with the manufacturing process 1] It can be only direct cost 2] It can be direct & indirect cost 3] It can be only indirect cost 4] Nothing can be predicted direct or indirect as such
3.
Deferred revenue expenditure affects the profitability only when they are 1] written down to profitability statement 2] written off to profitability statement 3] not shown in the balance sheet 4] shown in the liability side
4.
Mr Salil owner of a business sent a cheque of Rs 10,000 to Chief Minister's fund as a personal contribution. Journal entry in his books will be 1] Drawings A/C Dr 10,000 To Capital A/C 10,000 2] Drawings A/C Dr 10,000 To Bank A/C 10,000 3] Drawings A/C Dr 10,000 To Mr Salil A/C 10,000 4] Drawings A/C Dr 10,000 To Chief Minister's Fund A/C 10,000
5.
While installing the costing system in the organization, if the product is material intensive, on which factor more stress should be necessarily given 1] Control procedures 2] Inventory control procedures 3] Installation procedures 4] Environment control procedures
6.
What do you mean by Time Keeping 1] This is the process of recording the attendance time of the workers 2] This is the process of recording the time which requires for book keeping 3] This is the process of counting the time which supplier take to supply the material after purchase order is given.
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting 4] There is no time keeping concept as such in the organization. 7.
If the time booked as per Job Cards, is less than the attendance time, what does it indicate 1] This indicates the idle time during which the worker has not done any work, though he was present in the factory. 2] This indicates that work is not done because worker is absent. 3] This shows work is not available for that worker 4] This shows work is available for that worker
8.
According to Marginal costing which situation is treated as the profitable situation 1] The situation which generates the higher Contribution. 2] The situation which generates the lower Contribution. 3] The situation which generates the average Contribution. 4] The situation which generates the normal Contribution.
9.
In functional area of management , the budget to be prepared takes the form of a personnel budget, what does the personnel budget indicate 1] The requirement of few additional departments to facilitate the production process. 2] The requirement of personnel or labour force. 3] The requirement of competitive companies. 4] The requirement of a distributor.
10.
Overheads are classified according to the functions they perform, what does the classification call as 1] Function wise classification of overhead. 2] Element wise classification of overheads. 3] Normality wise classification of overheads. 4] Variability wise classification of overheads.
Multiple Choice Multiple Response 11.
If goods sent to the customer on approval basis, is treated as sales, what steps should be taken
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting
12.
1] The right decision taken that it is treated as sales 2] The effect of this entry needs to be reversed 3] Closing stock needs to be increased by the cost of such goods sent on approval basis 4] Closing stock needs to be decreased by the cost of such goods sent on approval basis By which name factory overheads are also known 1] Works overheads 2] Office overheads 3] Manufacturing overheads 4] Distribution overheads
13.
How should be the work of good wage payment system in the organization 1] Workers should be punished in terms of reduced wages for the mistakes which creates hold on the situations. 2] Wage payment should not depend upon the quality of the product, it should depend upon working capacity of the worker 3] The wage payment system should be properly tied up with quality control procedures. 4] It should ensure that the workers are paid only for good quality production.
14.
What does the Materials budget indicate 1] It indicates the estimated quantities of various materials required for carrying out production as per production budget. 2] It indicates the estimated costs of various materials required for carrying out production as per production budget. 3] It indicates the labour required for carrying out the production as per the production budget. 4] It indicates the time required for carrying out the production as per the production budget.
15.
Management accounting helps the management in these important activities 1] establishing a plan to procure the economic objectives 2] In taking decisions
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting 3] employee welfare 4] following government regulations 16.
The success of procedures to control the overheads depend upon the classification of the overhead. From which angles this classification can be done 1] Function- wise classification 2] Variability-wise classification 3] Normality-wise classification 4] Production process-wise classification
17.
From the given options, which comments indicate the nature of Ideal Standards 1] The ideal standards are generally practical in nature 2] The ideal standards are generally theoretical in nature. 3] The variances always show an unfavourable trend. 4] The ideal standards usually don't show variances.
18.
For the preparation of sales budget, sales quantity should be forecasted, It may be forecasted after taking into consideration various factors, from the given options which are they 1] Analysis of multiple key factors. 2] The forms of reports & statements to be used. 3] Analysis of long term trends, seasonal trends & the cyclical trends. 4] Assessment of the potential which means, which of the company's products can be sold, in which market, in what quantity & at what selling price.
Fill in the Blanks 19.
Folio refers to the _____ of the books of original entry or the ledger. 1] file 2] books 3] transactions 4] page number
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting 20.
Even________ within the organization can be classified as a service cost centre for an undertaking as it assists the production activity. 1] Store department 2] Sales manager 3] works manager 4] Assembly shop
21.
Purchase requisition should state_________ of the material required. 1] Market availability 2] The cost 3] The quantity 4] The state of final product
22.
In many cases cost centres are termed as _________ because they facilitate the control function. 1] Control centres 2] Stable centres 3] Liability centres 4] Responsibility centres
23.
When material once issued to the production department is returned back to the stores__________ is prepared. 1] Material Requisition. 2] Cost statement 3] Receipt for the material. 4] Material Returned Note.
24.
Management accounting has_________ financial accounting. 1] better acceptance than 2] reduced the shortcomings of 3] replaced the
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting 4] defeated the theories put forth by 25.
Profit &loss statement is________ statement 1] final 2] periodical 3] limited 4] forecast
26.
In cost accounting process cost are ascertained and controlled with respect to the ___________and hence it isa pre-requisite 1] Transactions 2] Cost centres 3] Cost accountants 4] Records in books of organization
27.
Variable cost indicates that portion of the total cost _______ with the level of production. 1] Which remains constant 2] Which is partly fixed & partly changes 3] Which varies directly 4] Which is controllable
28.
Marginal costing does not take in to consideration the fixed overheads, as such the problem of under or over absorption of fixed overheads can be avoided, but___________ 1] The problem of under or over absorption of variable overheads cannot be avoided, 2] The losses incurred cannot be avoided. 3] The Bad market conditions cannot be avoided. 4] The situation of stopping the production process cannot be avoided.
State True or False
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting 29.
The quantity to be produced , after giving due consideration to the sales forecast , it is not at all depend upon the opening stock or closing stock of finished goods.
30.
The Weekly time sheets Method of time booking involves less paper work in comparison to Daily time sheets method
31.
When it is decided that worker will be paid on time rate if his piece rate earnings fall below time rate earnings, so that he is assured minimum earnings on time basis. If this guaranteed time rate payment is too high, the incentive to increase output to get piece rate payment is high.
32.
Differential Piece Rate system of remuneration means different workers take part in different type of production under one roof, and they get paid different rate.
33.
While deciding the Price Standards, along with the basic prices, it may involve the consideration of the factors like discount, sales tax, insurance and octroi.
34.
Financial accounting discloses the financial performance of a business as a whole and not about an individual department or a process
35.
Planning lays down the course of action to be taken in future, in case of standard costing it is in the form of the budgets.
36.
The standard cost is the normal cost under ideal circumstances.
37.
There should be an effective &proper system of accounting so that information &data as required for the efficient implementation of the budgetary control system will be available in time.
38.
Budget manual may be in bound book form or a loose leaf form.
Match the Following 39.
1] Credit note 2] Debit side 3] Debit note 4] Credit side
40.
1] Fixed Overheads
1] An intimation sent for account is being credited for the purpose there in. 2] Left hand side of account 3] An intimation sent for account is being debited for the purpose there in. 4] Right hand side of account 5] An intimation sent by the customer. 6] Note showing the cash flow of the business. 1] Per unit cost of overheads may reduce as the volume of output increases but the total overheads remain constant.
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) Subject: Management Accounting 2] Variable
2] Per unit cost of overheads remains the same but the total overheads may increase or decrease as per volume of output.
Overheads
3] These overheads may remain fixed at certain levels of activity while may vary Proportionately at other levels of activity.
3] Semi-Variable Overheads
4] Function-wise classification of the Total Indirect Cost. 5] The Overheads are classified according to their controllable nature. 6] The Overheads are classified according to the facts.
41.
1] Break Even Point 2] Contribution 3] Margin of Safety 4] Profit Volume Ratio
1] =Fixed cost / Contribution per unit 2] =Sales - Variable cost 3] = Profit / Profit Volume Ratio 4] = (Change in Profits / Change in Sales) x 100 5] =Profit Volume Ratio / Fixed Cost 6] = (Sales / Contribution) x 100
42.
1] Maximum Level 2] Danger Level 3] Minimum Level 4] Reorder Level
1] Reorder Level + Reorder Quantity - (Minimum Usage x Minimum Lead Time) 2] Normal Usage x Lead-time for emergency purchases) 3] Reorder Level - (Normal Usage x Normal Lead Time) 4] Maximum Lead Time x Maximum Usage 5] Maximum Level + Minimum Level 6] Normal Usage - ( Minimum Level x Lead Time for the Emergency services)
