McqMate
Chapters
| 1. |
The receipt of…………….is the first step in purchase procedure. |
| A. | Invoice |
| B. | Material requisition |
| C. | Purchase requisition |
| D. | none |
| Answer» C. Purchase requisition | |
| 2. |
The Purchase…………….is a contractual document which authorizes the supplier to supply the material. |
| A. | Note |
| B. | Requisition |
| C. | Order |
| D. | none |
| Answer» C. Order | |
| 3. |
……………….formsthe basis of entries to the stores ledger. |
| A. | Purchase Order |
| B. | Goods Received Note |
| C. | Purchase Requisition |
| D. | none |
| Answer» B. Goods Received Note | |
| 4. |
The stock level at which the storekeeper initiates purchase requisitions is known as…………. |
| A. | Re-order level |
| B. | Danger level |
| C. | Maximum stock level |
| D. | none |
| Answer» A. Re-order level | |
| 5. |
…………………….is a buffer stock level or safety stock level under which the stock should not be allowed to fall. |
| A. | Average stock level |
| B. | Maximum stock level |
| C. | Minimum stock level |
| D. | none |
| Answer» C. Minimum stock level | |
| 6. |
The average stock level is………….. units if the maximum stock level is 2475 units and the minimum stock level is 855 units. |
| A. | 1565 |
| B. | 1665 |
| C. | 1465 |
| D. | none |
| Answer» B. 1665 | |
| 7. |
The optimum level of inventory is popularly referred to as the ……….. |
| A. | Minimum stock level |
| B. | Re-order stock level |
| C. | Economic Order Quantity |
| D. | none |
| Answer» C. Economic Order Quantity | |
| 8. |
In the formula of Economic Order Quantity, the alphabet ‘O’ stands for…………. |
| A. | Ordering level |
| B. | Ordering Cost |
| C. | Ordering & Carrying Cost |
| D. | none |
| Answer» B. Ordering Cost | |
| 9. |
Economic Order Quantity is he tool for controlling………………. |
| A. | Inventory |
| B. | Labour |
| C. | Expenses |
| D. | none |
| Answer» A. Inventory | |
| 10. |
Which of the following is not an inventory? |
| A. | Machines |
| B. | Raw material |
| C. | Finished products |
| D. | Consumable tools |
| Answer» A. Machines | |
| 11. |
The following classes of costs are usually involved in inventory decisions except |
| A. | Cost of ordering |
| B. | Carrying cost |
| C. | Cost of shortages |
| D. | Machining cost |
| Answer» D. Machining cost | |
| 12. |
The cost of insurance and taxes are included in |
| A. | Cost of ordering |
| B. | Set up cost |
| C. | Inventory carrying cost |
| D. | Cost of shortages |
| Answer» C. Inventory carrying cost | |
| 13. |
‘Buffer stock’ is the level of stock |
| A. | Half of the actual stock |
| B. | At which the ordering process should start |
| C. | Minimum stock level below which actual stock should not fall |
| D. | Maximum stock in inventory |
| Answer» C. Minimum stock level below which actual stock should not fall | |
| 14. |
The minimum stock level is calculated as |
| A. | Reorder level – (Normal consumption x Normal delivery time) |
| B. | Reorder level + (Normal consumption x Normal delivery time) |
| C. | (Reorder level + Normal consumption) x Normal delivery time |
| D. | (Reorder level + Normal consumption) / Normal delivery time |
| Answer» A. Reorder level – (Normal consumption x Normal delivery time) | |
| 15. |
Which of the following is true for Inventory control? |
| A. | Economic order quantity has minimum total cost per order |
| B. | Inventory carrying costs increases with quantity per order |
| C. | Ordering cost decreases with lo size |
| D. | All of the above |
| Answer» D. All of the above | |
| 16. |
The time period between placing an order its receipt in stock is known as |
| A. | Lead time |
| B. | Carrying time |
| C. | Shortage time |
| D. | Over time |
| Answer» A. Lead time | |
| 17. |
Re-ordering level is calculated as |
| A. | Maximum consumption rate x Maximum re-order period |
| B. | Minimum consumption rate x Minimum re-order period |
| C. | Maximum consumption rate x Minimum re-order period |
| D. | Minimum consumption rate x Maximum re-order period |
| Answer» A. Maximum consumption rate x Maximum re-order period | |
| 18. |
Average stock level can be calculated as |
| A. | Minimum stock level + ½ of Re-order level |
| B. | Maximum stock level + ½ of Re-order level |
| C. | Minimum stock level + 1/3 of Re-order level |
| D. | Maximum stock level + 1/3 of Re-order level |
| Answer» A. Minimum stock level + ½ of Re-order level | |
| 19. |
The Economic Order Quantity (EOQ) is calculated as |
| A. | (2D*d/h)^1/3 |
| B. | Root of 2AO / C |
| C. | COST + Profit = Sales |
| D. | none of the above |
| Answer» B. Root of 2AO / C | |
| 20. |
The order cost per order of an inventory is Rs. 400 with an annual carrying cost of Rs. 10 per unit. The Economic Order Quantity (EOQ) for an annual demand of 2000 units is |
| A. | 400 |
| B. | 440 |
| C. | 480 |
| D. | 500 |
| Answer» A. 400 | |
| 21. |
Proper classification and codification of various items in stores is essential for efficient…………….. . |
| A. | Record keeping |
| B. | Storage |
| C. | Selling |
| D. | none |
| Answer» B. Storage | |
| 22. |
…………… is he grouping of material according to its nature. |
| A. | Classification |
| B. | Codification |
| C. | Centralization |
| D. | none |
| Answer» A. Classification | |
| 23. |
………………..is the procedure for assigning symbols to the material. |
| A. | Classification |
| B. | Codification |
| C. | Centralisation |
| D. | none |
| Answer» B. Codification | |
| 24. |
The ……………..method of codification is generally based on the mnemonic system. |
| A. | Alphabetical |
| B. | Numerical |
| C. | Alpha-Numerical |
| D. | none |
| Answer» C. Alpha-Numerical | |
| 25. |
…………………..is the organisational head of the stores department. |
| A. | Storekeeper |
| B. | Purchase Manager |
| C. | Stores clerk |
| D. | none |
| Answer» A. Storekeeper | |
| 26. |
Maintaining prompt and accurate records of all goods received, issued and returned is the duty of …………….. |
| A. | Inspection clerk |
| B. | Goods receiving clerk |
| C. | Storekeeper |
| D. | none |
| Answer» C. Storekeeper | |
| 27. |
The………………..is maintained by the storekeeper. |
| A. | Bin Card |
| B. | Sales report |
| C. | Production report |
| D. | none |
| Answer» A. Bin Card | |
| 28. |
The stores ledger is maintained by the …………… department. |
| A. | Stores |
| B. | Cost |
| C. | Purchase |
| D. | none |
| Answer» B. Cost | |
| 29. |
…………………is a record of both quantities and values. |
| A. | Bin Card |
| B. | Stores Ledger |
| C. | Inspection report |
| D. | none |
| Answer» B. Stores Ledger | |
| 30. |
…………………… method of pricing issues follows the principle that material received first are issued first. |
| A. | Weighted Average |
| B. | LIFO |
| C. | FIFO |
| D. | none |
| Answer» C. FIFO | |
| 31. |
Under the…………. method of pricing issues, stock is valued at historical price. |
| A. | FIFO |
| B. | LIFO |
| C. | Simple Average |
| D. | none |
| Answer» B. LIFO | |
| 32. |
Simple average method is based on the principle that materials issues should be valued at ………… average price. |
| A. | Weighted |
| B. | Simple |
| C. | Periodic |
| D. | none |
| Answer» B. Simple | |
| 33. |
Under……………… method of pricing issues, issues are valued at a price calculated by dividing the total cost of material in the stock by the total quantity of material in stock. |
| A. | Simple average |
| B. | Weighted average |
| C. | Last in First out |
| D. | none |
| Answer» B. Weighted average | |
| 34. |
…………………stores organization is adopted to store all the goods at centrally located at on place. |
| A. | Centralized |
| B. | Central stores with sub-stores. |
| C. | Independent |
| D. | none |
| Answer» A. Centralized | |
| 35. |
Under…………… method of pricing material issue the value of closing stock represents the current market price. |
| A. | Weighted Average |
| B. | LIFO |
| C. | FIFO |
| D. | none |
| Answer» C. FIFO | |
| 36. |
The unused materials are returned to stores with a material …………..note. |
| A. | Acceptance |
| B. | Transfer |
| C. | Return |
| D. | none |
| Answer» C. Return | |
| 37. |
……………………method of pricing material issues provides a better matching of current costs with current revenues. |
| A. | FIFO |
| B. | LIFO |
| C. | Simple Average |
| D. | none |
| Answer» B. LIFO | |
| 38. |
……………….is a master requisition which lists all the materials required for the completion of a job. |
| A. | Bill of Material |
| B. | Purchase Requisition |
| C. | Material Requisition |
| D. | none |
| Answer» A. Bill of Material | |
| 39. |
Advantage of both centralized buying and storage of having stock conveniently available at several issuing points are possible in……………. system of stores organization. |
| A. | Independent stores |
| B. | Central stores with Sub-stores |
| C. | Centralised Stores |
| D. | none |
| Answer» B. Central stores with Sub-stores | |
| 40. |
Bin Card is also known as……………. |
| A. | Stock Card |
| B. | Cost Card |
| C. | Purchase Card |
| D. | none |
| Answer» A. Stock Card | |
| 41. |
The weighted average method divides the cost of goods available for sale by the number of units: |
| A. | Available for sale |
| B. | Sold |
| C. | Purchased during the period |
| D. | none |
| Answer» A. Available for sale | |
| 42. |
Cost of goods available for sale can be calculated by: |
| A. | Opening stock + purchases |
| B. | Closing stock + purchases |
| C. | Opening stock + purchases – closing stock |
| D. | none |
| Answer» A. Opening stock + purchases | |
| 43. |
Weighted average cost method produces different allocation of inventory costs in periodic and perpetual inventory system? |
| A. | Yes |
| B. | No |
| C. | all |
| D. | none |
| Answer» A. Yes | |
| 44. |
In a perpetual inventory system, the weighted average cost method is called: |
| A. | Moving average cost method |
| B. | Residual method |
| C. | Arithmetic cost method |
| D. | none |
| Answer» A. Moving average cost method | |
| 45. |
The weighted average method is most commonly employed when inventory items are: |
| A. | Different from each other |
| B. | Connected closely with each other |
| C. | Cost Accountancy |
| D. | Practice |
| Answer» B. Connected closely with each other | |
| 46. |
Weighted average method is a generally accepted accounting principle? |
| A. | True |
| B. | False |
| C. | none |
| D. | none |
| Answer» A. True | |
| 47. |
If WIP opening stock is 10,000 units, work done in the period is 13,000 and WIP closing stock is 5,000 units. The equivalent completed unit during the period is: |
| A. | 19,000n |
| B. | 18,000 |
| C. | 17,000 |
| D. | none |
| Answer» B. 18,000 | |
| 48. |
US GAAP allows FIFO, LIFO and Weighted average method to value stock? |
| A. | True |
| B. | False |
| C. | all |
| D. | none |
| Answer» A. True | |
| 49. |
Weighted average method for inventory is permissible in: |
| A. | IFRS only |
| B. | US GAAP only |
| C. | IFRS & US GAAP Both |
| D. | none |
| Answer» B. US GAAP only | |
| 50. |
Weighted average method is same as: |
| A. | Specific identification method |
| B. | LIFO |
| C. | FIFO |
| D. | None of the above |
| Answer» D. None of the above | |
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