330+ Cost and Management Accounting (CMA) Solved MCQs

1.

……….provides information for income determination.

A. financial accounting
B. cost accounting
C. management accounting
D. none of these
Answer» A. financial accounting
2.

helps in ascertaining costs beforehand.

A. financial accounting
B. cost accounting
C. management accounting
D. none of these
Answer» B. cost accounting
3.

The scope of cost accounting include…………..,…………… and……………

A. cost ascertainment, cost presentation, cost control
B. tax planning, tax accounting, financial accounting
C. presentation of accounting information, creation of policy, day-to day operation
D. none of the above
Answer» A. cost ascertainment, cost presentation, cost control
4.

Cost accounting disclose …………….

A. the financial position
B. profit/loss of a product, job or service
C. effect and impact of cost on business
D. none of these
Answer» B. profit/loss of a product, job or service
5.

….is a post mortem of past costs.

A. financial accounting
B. cost accounting
C. both a & b
D. none of these
Answer» A. financial accounting
6.

…..aids in price fixation.

A. financial accounting
B. cost accounting
C. management accounting
D. none of these
Answer» B. cost accounting
7.

………is the oldest branch of accounting.

A. financial accounting
B. cost accounting
C. management accounting
D. none of these
Answer» A. financial accounting
8.

……….includes financial and cost accounting, tax planning and tax accounting.

A. financial accounting
B. cost accounting
C. management accounting
D. none of these
Answer» C. management accounting
9.

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

A. process
B. batch
C. multiple
D. job
Answer» C. multiple
10.

Service costing is used in industries producing………………

A. products
B. service
C. both a & b
D. none of these
Answer» B. service
11.

……….costing is applicable to printers.

A. process
B. batch
C. multiple
D. job
Answer» D. job
12.

Process costing is also known as…......................costing.

A. continuous
B. batch
C. multiple
D. job
Answer» A. continuous
13.

Operating costing is also known as........................costing.

A. service
B. batch
C. multiple
D. job
Answer» A. service
14.

costing is a type or technique of costing.

A. marginal
B. batch
C. multiple
D. job
Answer» A. marginal
15.

……….costing is a type or technique of costing.

A. absorption
B. batch
C. multiple
D. job
Answer» A. absorption
16.

…………is not the scope ofCost Accountancy.

A. ascertaining cost
B. cost accounting
C. cost control
D. tax planning
Answer» D. tax planning
17.

Cost Accounting has been developed becauseof….........................of Financial Accounting.

A. limitations
B. advantages
C. both a & b
D. none of these
Answer» A. limitations
18.

Cost Accountancy is the science, art and ……………….of a costaccountant.

A. practice
B. exercise
C. hard work
D. effort
Answer» A. practice
19.

The ordinary trading account is a locked storehouse of most valuable information to which cost system is the……………….

A. key
B. lock
C. house
D. none of these
Answer» A. key
20.

Cost accounts deal partly with facts and figures and partly with………

A. estimates
B. costs
C. income
D. revenue
Answer» A. estimates
21.

Cost accounting provides data for managerial…………….

A. decision making
B. recruitment
C. retrenchment
D. none of the above.
Answer» A. decision making
22.

Cost accounting is based on…......................figures.

A. estimated
B. historical
C. actual
D. none of these.
Answer» A. estimated
23.

Cost accounting provides detailed information about .................................of various products, processes, services and operations.

A. costs
B. income
C. either a or b
D. none of these.
Answer» A. costs
24.

Cost accounting records both monetary and.......................units.

A. physical
B. cost
C. both a & b
D. none of these.
Answer» A. physical
25.

The method of costing used in a refinery is… .................. costing.

A. process
B. batch
C. multiple
D. job
Answer» A. process
26.

………costing is used in transport undertakings.

A. process
B. service
C. multiple
D. job
Answer» B. service
27.

The total variable cost.......................................in total proportion to output.

A. increases
B. does not increase
C. decreases
D. none of these.
Answer» A. increases
28.

Variable cost per unit ……….…………...

A. remains constant
B. varies
C. decreases
D. increases
Answer» A. remains constant
29.

Sunk costs are.............................for decision-making

A. irrelevant
B. relevant
C. useful
D. none of these.
Answer» A. irrelevant
30.

Costing and cost accounting are …………...

A. not the same
B. one and the same
C. not related at all
D. none of these.
Answer» A. not the same
31.

Fixed cost ...................................in the same proportion in which output changes.

A. does not change
B. changes
C. increases
D. none of these.
Answer» A. does not change
32.

Administration expenses are mostly……………….

A. semi-variable
B. variable
C. fixed
D. none of these.
Answer» C. fixed
33.

Abnormal cost is …………………..

A. uncontrollable
B. controllable
C. fixed
D. none of these
Answer» A. uncontrollable
34.

Cost of production is equal to ……………………

A. works cost plus administration overheads
B. prime cost plus works cost
C. prime cost plus works overhead
D. works overhead plus administration overheads
Answer» A. works cost plus administration overheads
35.

Variable cost increases with.................. in output.

A. increase
B. decrease
C. increase or decrease
D. none of these.
Answer» A. increase
36.

Accounting provides information for cost control.

A. financial
B. cost
C. human resource
D. none of these.
Answer» B. cost
37.

………is one which can be conveniently identified with and charged to a particular unit of cost.

A. direct cost
B. indirect cost
C. overhead
D. none of these
Answer» A. direct cost
38.

Cost centre and cost unit are……………………

A. not the same
B. the same
C. not related
D. none of these
Answer» A. not the same
39.

Fixed cost per unit …………………… with rise in output and …………… with fall in output.

A. decreases, increases
B. increases, decreases
C. is constant, remains same
D. none of the above
Answer» A. decreases, increases
40.

Period costs charged to……………….

A. cost of production
B. products
C. period
D. none of these
Answer» C. period
41.

Standard costs is…………………..

A. predetermined cost
B. budgeted cost
C. actual cost
D. none of these
Answer» A. predetermined cost
42.

……………………are costs which have been applied against revenue of particular accounting period.

A. expenses
B. income
C. loss
D. none of these
Answer» A. expenses
43.

.....................…………is the smallest segment of activity or area or responsibility for which costs are accumulated.

A. cost object
B. cost centre
C. cost driver
D. none of the above
Answer» B. cost centre
44.

The primary emphasis of.......................... cost is on the planning function of management.

A. budgeted
B. standard
C. period
D. none of these
Answer» A. budgeted
45.

……….cost is irrecoverable cost.

A. marginal
B. out of pocket
C. sunk
D. none of these
Answer» C. sunk
46.

……is the value of a benefit where no actual cost is incurred.

A. imputed
B. sunk
C. out of pocket
D. none of these
Answer» A. imputed
47.

………..is the cost which involves payment to outsiders.

A. out of pocket cost
B. imputed cost
C. notional cost
D. none of these
Answer» A. out of pocket cost
48.

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

A. opportunity
B. incremental revenue
C. alternative revenue
D. none of these
Answer» A. opportunity
49.

An item of cost that is direct for one business may be ......................for another business.

A. important
B. direct
C. indirect
D. none of the above.
Answer» C. indirect
50.

The total of all direct expenses is known as ................... cost.

A. prime
B. works
C. production
D. both a & b
Answer» A. prime
51.

................ costs are partly fixed and partly variable in relation to output.

A. variable
B. fixed
C. semi-variable
D. both a & b
Answer» C. semi-variable
52.

An opportunity cost is …………………..

A. the advantage foregone
B. the cost
C. the income
D. none of the above.
Answer» A. the advantage foregone
53.

Works cost is a total of………………

A. indirect material, indirect labour
B. direct material, direct labour, direct or chargeable expenses and works expenses
C. direct material, direct labour
D. indirect material, indirect labour, indirect expenses
Answer» B. direct material, direct labour, direct or chargeable expenses and works expenses
54.

An opportunity cost does not involve…………

A. cash outlays
B. direct cost
C. indirect cost
D. none of the above
Answer» A. cash outlays
55.

Variable costs change..................................with change in output.

A. proportionately
B. inversely
C. disproportionately
D. sometimes
Answer» A. proportionately
56.

Fixed cost per unit................................... with increase in output.

A. decreases
B. increases
C. changes
D. sometimes
Answer» A. decreases
57.

Depreciation is… ........................expenditure.

A. fixed
B. variable
C. adjustable
D. semi-variable
Answer» D. semi-variable
58.

Out of pocket costs involve payment to …………………

A. outsiders
B. self
C. employees
D. none of the above
Answer» A. outsiders
59.

Added value is the change in…………………

A. market value
B. cost
C. income
D. none of the above.
Answer» A. market value
60.

.........................Accounting is not only a positive science but also a normative science because it includes techniques of budgetary controland standard costing.

A. financial
B. cost
C. both a & b
D. none of these
Answer» B. cost
61.

Material control does not cover the following stage.

A. purchase of materials
B. storing of materials
C. issue of materials
D. production
Answer» D. production
62.

Material control aims at achieving effective…………

A. material management
B. quality control
C. accounting of material
D. material supply
Answer» A. material management
63.

Stores Ledger is maintained in the…………………

A. store
B. finance department
C. cost accounting department
D. both a & b
Answer» C. cost accounting department
64.

Stock verification sheets are maintained to record the results of ……….

A. physical verification
B. financial control
C. financial verification
D. quality verification
Answer» A. physical verification
65.

Stock Adjustment Account is debited with ……….and credited with ………..

A. surplus, shortage of stock
B. shortage of stock, surplus
C. excess, loss
D. none of these
Answer» B. shortage of stock, surplus
66.

Bin card is a record of.................. only.

A. cost
B. value
C. quantity
D. expense
Answer» C. quantity
67.

Bin card is maintained by the…………….

A. cost accountant
B. clerk
C. storekeeper
D. branch accountant
Answer» C. storekeeper
68.

Material abstract is also known as ………………

A. material issue analysis sheet
B. bill of materials
C. stores ledger
D. none of the above
Answer» A. material issue analysis sheet
69.

Material should be issued by the store keeper against……………….

A. material requisition
B. bill of materials
C. both a & b
D. none of these
Answer» C. both a & b
70.

First in first out method of valuing material issues is suitable in times of…………

A. rising prices
B. falling prices
C. fluctuating prices
D. none of these
Answer» B. falling prices
71.

Last in first out method is suitable in times of………………

A. rising prices
B. falling prices
C. fluctuating prices
D. none of these
Answer» A. rising prices
72.

Average cost method of valuing material issues is suitable when………….

A. prices rise
B. prices fall
C. prices fluctuate considerably
D. none of these
Answer» C. prices fluctuate considerably
73.

Inflated price method of valuing material issues is suitable when…………

A. materials are subject to natural wastage
B. prices rise
C. prices fall
D. none of these
Answer» A. materials are subject to natural wastage
74.

Specific price method of valuing material issue is used when………….

A. materials are purchased for specific job or work order
B. materials are subject to natural wastage
C. prices fluctuate
D. none of these
Answer» A. materials are purchased for specific job or work order
75.

Market price method is considered to be the best method when…………..

A. quotations have to be sent
B. prices fluctuate
C. materials are subject to natural wastage
D. none of these
Answer» A. quotations have to be sent
76.

A bill of material serves the purpose of…………………

A. material requisition
B. stores ledger
C. material issue analysis sheet
D. none of these
Answer» A. material requisition
77.

A bill of material is prepared in case of a................................. job

A. standard job
B. non-standardized job
C. both a & b
D. none of these
Answer» B. non-standardized job
78.

Stock verification sheets are maintained to record the results of………

A. physical verification
B. financial control
C. financial verification
D. quality verification
Answer» A. physical verification
79.

The quantity of material to be ordered at one time is known as…………

A. ordering quantity
B. commercial order quantity
C. economic order quantity
D. none of these
Answer» A. ordering quantity
80.

……….represents that quantity of material which is normally ordered when a particular material reaches reordering level.

A. maximum level
B. re-order level
C. minimum level
D. re-order quantity
Answer» D. re-order quantity
81.

The principle types of inventories are raw materials and ,…............and finished goods

A. processed materials
B. goods-in-progress
C. stored goods
D. goods for dispatch
Answer» B. goods-in-progress
82.

Re-ordering level = Maximum consumption x …………………………

A. average re-order period
B. maximum usage
C. maximum re-order period
D. normal usage
Answer» C. maximum re-order period
83.

Inventory turnover ratio = Cost of inventory consumed during theperiod ÷ Cost of ....................................................held during the period

A. average inventory
B. minimum inventory
C. maximum inventory
D. none of these
Answer» A. average inventory
84.

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
Answer» A. inventory turnover ratio
85.

………is a technique of material cost control which leads to low carrying cost as a result of low investment in inventory

A. abc analysis
B. jit inventory system
C. ved analysis
D. perpetual inventory system
Answer» B. jit inventory system
86.

………………is a technique of stock control which leads to saving of time of the management because attention is required to be paid only to some of the items rather than on all the items.

A. abc analysis
B. jit inventory system
C. ved analysis
D. perpetual inventory system
Answer» A. abc analysis
87.

……………….is used primarily for control of spare parts.

A. abc analysis
B. jit inventory system
C. ved analysis
D. perpetual inventory system
Answer» C. ved analysis
88.

Inventory turnover ratio = Cost of …………………..during the period ÷ Cost of average inventory held during the period.

A. inventory consumed
B. minimum inventory
C. maximum inventory
D. none of these
Answer» A. inventory consumed
89.

Re-ordering level = ........................................X Maximum re-order period

A. average re-order period
B. maximum usage
C. maximum consumption
D. normal usage
Answer» C. maximum consumption
90.

……………….obviates the necessity for the physical checking of all items of stores at the end of the year and thereby avoids dislocation ofproduction.

A. abc analysis
B. jit inventory system
C. ved analysis
D. perpetual inventory system
Answer» D. perpetual inventory system
91.

………………forms part of cost of production.

A. abnormal waste
B. normal waste
C. both a & b
D. none of these
Answer» B. normal waste
92.

…………does not form part of production.

A. abnormal waste
B. normal waste
C. both a & b
D. none of these
Answer» A. abnormal waste
93.

Material losses due to abnormal reasons should be transferred to…………………

A. profit and loss account
B. costing profit and loss account
C. trading account
D. none of these
Answer» B. costing profit and loss account
94.

Defectives are that portion of production which can be.............................at some extra cost of re-operation.

A. sold
B. rectified
C. purchased
D. none of these
Answer» B. rectified
95.

Which among the following is not a management accounting technique.

A. stard costing
B. project appraisal
C. marginal costing
D. none
Answer» D. none
96.

Marginal costing is a …………… of costing

A. system
B. method
C. technique
D. all of these
Answer» C. technique
97.

.......................Under marginal costing, …………… costs are treated as period costs and charged to profit and loss account for the period for which they are incured.

A. variable cost
B. fixed cost
C. both of these
D. none of these
Answer» B. fixed cost
98.

Under marginal costing, stocks of finished goods and work-in-process are valued at …………….. costs only

A. variable cost
B. fixed cost
C. marginal cost
D. none of these
Answer» C. marginal cost
99.

……….is the excess of sales over marginal cost of sales

A. profit
B. margin
C. loss
D. contribution
Answer» D. contribution
100.

………..is the practice of charging all costs, both variable and fixed , to operations, processes, or products.

A. marginal costing
B. absorption costing
C. differential costing
D. none of the above
Answer» B. absorption costing
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