Costing MCQ Questions and Solutions with Explanations

21

The budget that is prepared first of all is . . . . . . . .

A) cash budget B) master budget C) budget for the key factor D) sales budget

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Answer & Solution

Answer: Option C

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22

What is the ideal quick ratio?

A) 1 : 1 B) 2 : 1 C) 3 : 1 D) 4 : 1

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Answer & Solution

Answer: Option A

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23

In electricity supply company uses . . . . . . . . as cost unit.

A) kilo watt hour B) per household C) voltage D) None of these

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Answer & Solution

Answer: Option A

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24

Which one of the following is the correct sequence of various stages of operating cycle of a manufacturing company?

A) Raw material conversion period, work-in-progress conversion period, Finished goods conversion period, Receivables conversion period B) Raw material conversion period, work-in-progress conversion period, Creditors payment period, Receivables conversion period C) Creditor payment period, Raw material conversion period, Receivables conversion period, work-in-progress conversion D) Raw material conversion period, Finished goods conversion period, work-in-progress conversion period, Receivables conversion period

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Answer & Solution

Answer: Option A

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25

From the following two statements of Assertion (A) and Reason (R). Indicate the correct option.
Assertion (A) From the marginal costing approach point of view, the marginal cost is compared with the purchase price.
Reason (R) If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

A) Both (A) and (R) are correct B) (A) is correct, but (R) is not correct C) (A) is not correct, but (R) is correct D) Both (A) and (R) are incorrect

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Answer & Solution

Answer: Option B

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26

Which of the following is not true of the cash budget?

A) The shortage or excess of cash would appear in a particular period B) All inflows would arise before outflows for those periods C) Only revenue nature cash flows are shown D) Proceeds from issue of share capital is shown as an inflow

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Answer & Solution

Answer: Option C

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27

Match the List-I with the items of List-II relating to human resource planning activities, and indicate the correct matching.

List-I	List-II
a. Forecasting	1. Optimal employment
b. Inventorying	2. Development activities
c. Anticipating manpower problems	3. Mathematical projections of industrial trend
d. Planning programmes	4. Projecting present resources into future

A) a-2, b-1, c-4, d-3 B) a-1, b-4, c-3, d-2 C) a-4, b-2, c-1, d-3 D) a-3, b-1, c-4, d-2

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Answer & Solution

Answer: Option D

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28

At what value is the closing stock valued
Or
Stock is valued on

A) Cost price B) Market value C) Cost price or market price, whichever is less D) Cost price or market price, whichever is higher

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Answer & Solution

Answer: Option C

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29

Assertion (A) Break-even point can be determined both mathematically as well as graphically.
Reason (R) When it is determined on a graph paper, the graph drawn is named as 'break-even chart'.

A) (A) is true, but (R) is false B) (A) is false, but (R) is true C) Both (A) and (R) are true and (R) is the correct explanation of (A) D) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

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Answer & Solution

Answer: Option C

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30

Which of the following statements is true about estimated costs and standard costs?

A) Standard costs are based on scientific analysis and engineering studies, while estimated costs are based on a historical basis B) Standard cost emphasis is on 'what cost will be', while estimated cost emphasis is on 'what cost should be' C) Standard costs are frequently revised compared to the estimated cost D) Estimated costs are stable than standard costs

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Answer & Solution

Answer: Option A

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Costing MCQ Questions and Solutions with Explanations | Commerce