ACCOUNTING 484 Accounts Final exam update questions with correct answers solution 2022

ACCOUNTING 484 Accounts Final exam update questions with correct answers solution 2022 1. The ABC is widely used classification technique to identify various items of inventory for purpose of inventory control and recommends that a firm should exercise the maximum control on ……. Items of inventory that are : a. Most costly and/or slowest turnover b. High in volume c. Fast turning d. All of these 2. The fixed manufacturing cost can be carried forward to next period as part of inventory cost in which of the following costing system _____________ ? a. Marginal Costing b. Variable Costing c. Unit costing d. Full costing 3. For Cash ltd estimated sales for April, May, June, July August are Rs 46000, Rs 48000, Rs 28000 Rs 44000 ans Rs 30000. In cash 50% of sales are realized in the next month and balance in the next of next month, determine cash collection from sales in june and July. a. Rs 47000 and Rs 38000 b. Rs 38000 and Rs 36000 c. Rs 14000 and Rs 22000 d. Rs 24000 and Rs 14000. 4. An increase in selling price per unit will lead to __________ a. A decrease in profit b. An increase in contribution c. A reduction in contribution d. A decrease in P/V ratio e. Rs 24000 and Rs 14000. 5. The direct method and indirect method of presenting cash flow statement differs only in respect of presenting cash flows from _____________ activities. a. Non-operating b. Direct c. Operating d. Indirect 6. Resources that are limited in quality are called as a. Key lender b. Contributor c. Key factors d. Key limiters 7. As per flexible budget, sales is Rs CoGS is Rs and 20% of which is fixed. Calculate CoGS at 80% capacity utilization, considering that current utilization of capacity is 60%. a. Rs b. Rs c. Rs d. Rs . 8. The cost which remain constant in total but reduces per unit as the volume of production increase is known as____________ a. Variable Cost b. Fixed Cost c. Mixed Cost d. Semi Variable Cost 9. The part of cost of joint products that can be attributed exclusively and wholly to a particular products, process, Division or department is known as a. Inseparable b. Separable c. Fixed d. None of the above. 10. If an owned premises is used for a business, the rental income forgone by not giving it on rent is an example of ______________ a. Opportunity Cost b. Out of pocket cost c. Sunk Cost d. Variable Cost 11. __________ are the expenses related to business activity but are disproportionate in amount or occurs infrequently a. Extraordinary items b. Non-operating Expenses c. Operating Expenses d. Exceptional items 12. Selling and distribution charges are incurred for marketing of products, dispatching goods sold and so on and include a. Advertisement expenses cost of preparing tenders travelling expenses, bad debts. , Collection charges b. Warehouse charges, packing and loading charges and carriage outward c. All of these d. None of these 13. _________ is an obligation present at the balance sheet date. a. Liability b. Asset c. Equity d. Bonds 14. __________ attached with the balance sheet forms a part of the financial statement a. ……………. b. Schedules or notes ….. c. Acts d. Rules 15. Furniture ltd produces multiple types of chairs. It uses activity-based costing and has the following activity cost pools, estimated overhead cost for each pool and related cost driver a) Handling material Rs for which cost driver is number of parts, total parts are 6000 b) Processing purchase orders Rs for which cost driver is number of purchase orders, if number of purchase orders placed in a year are 12000. If number of purchase orders and number of parts for student chair are 3000 & 3000 respectively then calculate the overheads allocated to student chairs. a. Rs 80000 b. Rs c. Rs d. Rs 16. Factory overhead costs refer to all indirect manufacturing costs which cannot be identified with particular orders or units of product. It includes ………… a) Direct Material b) Depreciation on factory plant and equipment’s and factory building c) Direct Labour d) None of these 17. Gain from sale of items of PP&E should be included in ………. a) Revenue b) Other operating income c) Other income d) Turnover 18. Annual requirement is units , Unit price 20 per order. Carrying cost 1 per unit and lead time is 2 week. The economic order quantity would be. a) 1000 units b) 2000 units c) 800 units d) 10000 units 19. In product mix decision, most important factor to be considered is …….? a) Contribution per unit. b) Contribution per unit of key resource c) profit per unit d) revenue of each product 20. When a department or product line is dropped, the common Fixed costs which had been allocated to that department. a) Are eliminated b) Become variable costs c) Are allocated to the remaining departments or product lines d) Become sunk costs 21. The overheads are absorbed into different products under activity costing system a) Using level of activity used in producing the cost under b) Using departmental overhead rate c) Both of these d) None of these 22. About 60 items are required everyday for a machine. A fixed cost of 40per order is incurred for placing an order. The inventory carrying cost per item amounts to Re.0.05 per day. The lead period is 25 days .Compute reorder level. a) 2400 items b) 1500 items =60X25=1500 c) 120 items d) 1000 items 23. From the prospective of cost allocation, service department costs are a) Generally treated as period costs rather than products costs. b) Reported as selling and administrative expenses on the income statement c) Eventually applied by the user departments to the units produced d) Seldom found in manufacturing organizations 24. Economists believe that a) people who choose to promote the interests of others cannot be acting rationally in their own self-interest. b) people show concern only for those whom they know personally c) the notion of self-interest rules out concern for others d) concern for the welfare of others is consistent with the concept of self-interest 25. On the basis of …………., budget is classified into long term budget, short term budget and current budget. a) Time b) Flexibility c) Function d) Cost 26. The principle underlying the variable costing is that the fixed manufacturing overheads are………. a) Non-Inventoriable costs b) period cost c) to be deducted in the year in which they are d) All of these 27. Net profit is reported at . Net profit includes interest expense , income tax expense , interest income , depreciation , working capital increased during the year by . There was no income tax liability at the beginning and at the end of the year. Cash flow from operative activities is …… a) b) c) d) 28. The P/V ratio of a company is 40% and margin of safety is 20%. If present sales is Rs.20,00,000 then Break Even Point in Rs. Will be ………….. a) Rs. 4,00,000 b) Rs. 12,00,000 c) Rs. 8,00,000 d) Rs. 16,00,000 Solution: Calculation of Break-Even Point Margin of safety is 40% of sales = 20,00,000 x 40 / 100 = 8,00,000 Break-even sales = Sales – Margin of safety= 20,00,000 – 8,00,000= 12,00,000 29. Cash flows arising from the purchase and sale of dealing or trading securities are classified as …………for a brokerage firm. a) Non-operating activities b) Investing activities c) Financing activities d) Operating activities 30. ………….. is the traditional method of income determination which includes all manufacturing costs i.e. variable and fixed expenses? a) Absorption Costing b) Variable Costing c) Fixed Costing d) Process Costing 31. Fixed cost is cost………… a) Which changes in total in proportion to changes b) Which is partly fixed and partly variable in relation to output c) Which do not change in total during a given period irrespective of changes in output. d) Which remains same for each unit of output 32. Current ratio of a concern is 1, its net working capital will be a) Positive b) Negative c) Nil d) None of these