Costing MCQ Questions and Solutions with Explanations

71

Assertion (A) Cash flow statement as per the financial statements as well is incapable in revealing the overall financial position of a firm.
Reason (R) Cash is an important constituent of the working capital based on the recorded facts only.

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

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Answer & Solution

Answer: Option A

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72

Elements of cost are

A) Material B) Labour C) Expenses D) All of the above

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Answer & Solution

Answer: Option D

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73

. . . . . . . . is the maximum possible alternative earning that might have been earned if the productive capacity is put to some alternative use.

A) Opportunity B) Incremental revenue C) Alternative revenue D) None of these

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Answer & Solution

Answer: Option A

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74

A capital investment is one that

A) has the prospect of long-term benefits B) has the prospect of short-term benefits C) applies only to investment in fixed assets D) All of the above

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Answer & Solution

Answer: Option A

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75

Which of the following are the benefits of responsibility accounting?
I. It facilitates the centralization of decision-making.
II. It provides a system of closer control.
III. It measures the performance of individuals in an objective manner.
IV. It develops a sense of cost-consciousness among managers and their subordinates.

A) I, II and III B) II, III and IV C) I, II and IV D) I, III and IV

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Answer & Solution

Answer: Option B

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76

In automobile, . . . . . . . . costing is used.

A) process B) batch C) multiple D) job

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Answer & Solution

Answer: Option C

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77

Match the items in List-I with the items in List-II and indicate the correct answer.

List-I	List-II
a. Debt-equity ratio	1. Net profit before interest and tax/Interest on long-term loans
b. Proprietary ratio	2. Equity share capital + Reserves/Preference share capital + Interest bearing finance
c. Interest coverage ratio	3. Long-term debts/Shareholder's Funds
d. Capital gearing ratio	4. Shareholder's Funds/Total Assets

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

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Answer & Solution

Answer: Option B

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78

Inventory turnover in days = Days during the period ÷ . . . . . . . .

A) inventory turnover ratio B) material consumed during the period C) cost of average stock during the period D) None of these

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Answer & Solution

Answer: Option A

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79

The statement prepared under process costing is called

A) cost of goods sold statement B) income statement C) cost of production report D) variance statement

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Answer & Solution

Answer: Option C

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80

Which aspect of business is affected the most by implementing JIT?

A) Sales B) Inventory C) Manpower requirement D) Total maintenance

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Answer & Solution

Answer: Option B

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Costing MCQ Questions and Solutions with Explanations | Commerce