Accounting & Auditing Paper II (2001) - A

Accounting & Auditing Paper II (2001) - A

1. The measureable value of an alternative use of resources is referred to as?

a) An opportunity cost
b) An imputed cost
c) A different cost
d) A sunk cost
e) None of these

2. A fixed cost?

a) May change in total when such change is not related to changes in production
b) Will not change in total because it is not related to changes in production
c) Is constant per unit for each unit of change in production
d) May change in total, depending on production with the relevant range
e) None of these

3. A cost center is?

a) A unit of production in relation to which costs are ascertained
b) A location which is responsible for controlling direct costs
c) Part of the factory overhead system by which costs are gathered
d) Any location or department which incurs cost
e) None of these

4. A quantitative expression of management objectives is an?

a) Organizational chart
b) Management chart
c) Budget
d) Procedural chart
e) None of these

5. At break-even point of 400 units sold the variable costs were Rs. 400 and the fixed costs were Rs.200. What will be the 401 units sold contributing to profit before income tax?

a) Rs. 0.00
b) Rs. 0.50
c) Rs. 1.00
d) Rs. 1.50
e) None of these

6. In considering a special order situation that will enable a company to make use of currently idle capacity, which of the following cost will be irrelevant?
A fixed cost?

a) MaterialsMay change in total when such change is not related to changes in production
b) Depreciation Will not change in total because it is not related to changes in production
c) Direct labour - Is constant per unit for each unit of change in production
d) Variable factory overhead. May change in total, depending on production with the relevant range
e) None of these

7. Completion of a job is result in?

a) DR finished goods …….. CR WIP
b) DR Cost of goods ……... CR finished goods
c) DR WIP ……………..….….. CR FOH control
d) DR FOH control …….….. CR FOH applied
e) None of these

8. Operating cost in often named as?

a) Manufacturing cost plus commercial expenses
b) Prime cost plus factory overheads
c) Direct material plus direct labour
d) Selling plus administrative expenses
e) None of these

9. Expenses such as rent and depreciation of a building are shared by several departments these are?

a) Indirect expenses
b) Direct expenses
c) Joint expenses
d) All of the above
e) None of these

10. If under applied FOH is closed to cost of goods sold, the journal entry is?
a) DR Cost of goods sold …….. CR FOH control
b) DR FOH control ……..……….. CR Cost of goods sold
c) DR FOH control ……..……….. CR Profit % loss account
d) None of these

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