McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Master of Commerce (M.com) .
| 51. |
Which of the following characteristics is relevant to process costing but not to job order costing? |
| A. | Averaging process |
| B. | Identifiable batches of production |
| C. | Equivalent units |
| D. | Use of standard cost |
| Answer» C. Equivalent units | |
| 52. |
Which of the following types of spoilage should not affect the recorded cost of inventories |
| A. | Normal spoilage |
| B. | Standard spoilage |
| C. | Abnormal spoilage |
| D. | Seasonal spoilage |
| Answer» C. Abnormal spoilage | |
| 53. |
A section of the cost of production report which shows the physical flow of units through various producing departments is usually labeled as |
| A. | Schedule of physical flow |
| B. | Quantity schedule |
| C. | Equivalent units of production |
| D. | Cost to be accounted for |
| Answer» B. Quantity schedule | |
| 54. |
What does FIFO mean? |
| A. | Finished stock In Finished stock out |
| B. | Fabrications Inward Fabrications Outward |
| C. | Final Input Final Output |
| D. | First In First Out |
| Answer» D. First In First Out | |
| 55. |
Regardless of how long it takes to produce and sell inventory, inventory is always considered to be a? |
| A. | Current asset |
| B. | Current liability |
| C. | Long-term asset |
| D. | Stockholder's equity |
| Answer» A. Current asset | |
| 56. |
The latest cost of inventories is changed to production but the old prices are changed to inventories on hand? |
| A. | Average |
| B. | LIFO |
| C. | FIFO |
| D. | Perpetual |
| Answer» B. LIFO | |
| 57. |
An increase in inventories indicates that? |
| A. | More merchandise was purchased then the amount sold to customer |
| B. | Less merchandise was purchased then sold to the customer |
| C. | Not all purchases were cash |
| D. | Cash payments were more than purchases on account |
| Answer» A. More merchandise was purchased then the amount sold to customer | |
| 58. |
Which type of inventory system is updated inventory system? |
| A. | Periodic inventory system |
| B. | Contingency inventory system |
| C. | LIFO |
| D. | Perpetual inventory system |
| Answer» D. Perpetual inventory system | |
| 59. |
What is the principal criterion used to distinguish between tangible assets and inventories? |
| A. | The physical substance of the asset |
| B. | The acquisition cost of the asset |
| C. | The nature of the company’s activity, which determines the purpose for which the asset is held |
| D. | The moment in the accounting period when the asset is acquired |
| Answer» A. The physical substance of the asset | |
| 60. |
Which of the following method is suitable for calculating the cost of inventory when actual costs of individual units of merchandise can be determined from the accounting records? |
| A. | FIFO Method |
| B. | LIFO Method |
| C. | Specific Identification Method |
| D. | Average Method |
| Answer» C. Specific Identification Method | |
| 61. |
The inventories are recorded at the latest price but the production cost is changed old cost price? |
| A. | FIFO |
| B. | Average |
| C. | Both A & B |
| D. | None |
| Answer» A. FIFO | |
| 62. |
Which one of the following methods for inventory valuation may be misleading when the units are identical? |
| A. | FIFO Method |
| B. | LIFO Method |
| C. | Specific Identification Method |
| D. | None |
| Answer» A. FIFO Method | |
| 63. |
During September, Khan had sales of 148,000, which made a gross profit of 40,000. Purchases amounted to 100,000 and opening inventory was 34,000. The value of closing inventory was? |
| A. | Rs. 24,000 |
| B. | Rs. 26,000 |
| C. | Rs. 42,000 |
| D. | Rs. 54,000 |
| Answer» B. Rs. 26,000 | |
| 64. |
Which type of inventory system requires updating the inventory balance at the end of the accounting period? |
| A. | Periodic inventory system |
| B. | LIFO |
| C. | Perpetual inventory system |
| D. | FIFO |
| Answer» A. Periodic inventory system | |
| 65. |
In LIFO method of inventory valuation? |
| A. | Issue of stocks to production is at latest price |
| B. | Closing stock is at latest price |
| C. | Both (a) & (b) |
| D. | Neither (a) nor (b) |
| Answer» A. Issue of stocks to production is at latest price | |
| 66. |
The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be? |
| A. | FIFO |
| B. | LIFO |
| C. | Weighted average |
| D. | None of these |
| Answer» D. None of these | |
| 67. |
Inventory does not include? |
| A. | Materials used in the production of goods to be sold |
| B. | Assets intended to be sold in the normal course of business |
| C. | Equipment used in the manufacturing are sold |
| D. | Assets currently in production for normal sales |
| Answer» C. Equipment used in the manufacturing are sold | |
| 68. |
Net Purchases equal the invoice amount and? |
| A. | Plus freight-in, plus discounts |
| B. | Less purchase returns, plus purchase allowances |
| C. | Plus freight-in, less purchase discounts |
| D. | Plus discounts, less purchase returns |
| Answer» C. Plus freight-in, less purchase discounts | |
| 69. |
In FIFO method of inventory valuation? |
| A. | Closing stock is at latest price |
| B. | Issue of stocks to production is at earliest price |
| C. | Both (a) & (b) |
| D. | Neither (a) nor (b) |
| Answer» A. Closing stock is at latest price | |
| 70. |
The average inventory costing method which results in a changed unit inventory cost after each successive purchase? |
| A. | Weighted average |
| B. | Moving average |
| C. | Specific cost |
| D. | Simple average |
| Answer» A. Weighted average | |
| 71. |
The specific cost identification inventory cost flow method has all of the following characteristics except? |
| A. | It identifies the cost of each physical item available for sale with either the ending inventory or cost of goods sold |
| B. | It relates cost flow to the specific flow of physical goods |
| C. | It is especially applicable when small and inexpensive items are handled in large quantities |
| D. | It requires individual identification of items some device like tags or serial numbers |
| Answer» B. It relates cost flow to the specific flow of physical goods | |
| 72. |
Sales revenues are usually considered earned when? |
| A. | Cash is received from credit sales |
| B. | An order is received |
| C. | Goods have been transferred from the seller to the buyer |
| D. | Adjusting entries are made |
| Answer» C. Goods have been transferred from the seller to the buyer | |
| 73. |
A retail firm would normally use an inventory account titled? |
| A. | Finished Goods Inventory |
| B. | Merchandise Inventory |
| C. | Goods in Process Inventory |
| D. | Raw Materials Inventory |
| Answer» B. Merchandise Inventory | |
| 74. |
Which one of the following does not describe a type of transfer pricing? |
| A. | Target based |
| B. | Cost based |
| C. | Negotiated |
| D. | Administered |
| Answer» A. Target based | |
| 75. |
Systematic evaluation of the trade-offs between product functionality and product cost while still satisfying customer needs is the definition of |
| A. | Activity based management |
| B. | Theory of constraints |
| C. | Total quality management |
| D. | Value engineering |
| Answer» D. Value engineering | |
| 76. |
Productivity is the ratio between input and __________. |
| A. | Product |
| B. | Output |
| C. | Value |
| D. | Cost |
| Answer» B. Output | |
| 77. |
Labour productivity measures the growth in value added _____ per unit of labour used. |
| A. | Input |
| B. | Output |
| C. | Cost |
| D. | Energy |
| Answer» B. Output | |
| 78. |
Pareto Principle is ______ rule. |
| A. | 80/20 |
| B. | 50/50 |
| C. | 60/40 |
| D. | 10/90 |
| Answer» A. 80/20 | |
| 79. |
The Theory of Constraints is an organizational change method that is focused on ___________ improvement. |
| A. | Profit |
| B. | Cost |
| C. | Product |
| D. | Economics |
| Answer» A. Profit | |
| 80. |
The essential concept of TOC is that every organization must have at least one ____________. |
| A. | Process |
| B. | Function |
| C. | Constraint |
| D. | Cost |
| Answer» C. Constraint | |
| 81. |
A _______ is any factor that limits the organization from getting more of whatever it strives for. |
| A. | Constraint |
| B. | Cost |
| C. | Profit |
| D. | Revenue |
| Answer» A. Constraint | |
| 82. |
Lean management has been developed with the intention of reducing ________________ and maximizing the value of the product or the service to the customer. |
| A. | Cost |
| B. | Value Cost |
| C. | Process Waste |
| D. | Profit |
| Answer» C. Process Waste | |
| 83. |
________________ is an important part of lean thinking. |
| A. | Lean Management |
| B. | Cost Management |
| C. | Strategic Cost |
| D. | Cost Reduction |
| Answer» A. Lean Management | |
| 84. |
A ______________ is the sequence of phases that a project goes through from its initiation to its closure. |
| A. | Product Management |
| B. | Project Management |
| C. | Project Sequencing |
| D. | ProjectLife Cycle |
| Answer» D. ProjectLife Cycle | |
| 85. |
____________ describes the activities within and around an organization, and relates them to an analysis of the competitive strength of the organization. |
| A. | Value Chain Analysis |
| B. | Value Management |
| C. | Value Engineering |
| D. | Strategic Cost |
| Answer» A. Value Chain Analysis | |
| 86. |
Porter argues that the ability to perform particularactivities and to manage the linkages between these activities is a source of _______________ advantage. |
| A. | Cost |
| B. | Competitive |
| C. | Functional |
| D. | Profitability |
| Answer» B. Competitive | |
| 87. |
_________ is referred to as continuous improvement costing. |
| A. | Kaizen |
| B. | JIT |
| C. | Kanban |
| D. | Cost sensitivity |
| Answer» A. Kaizen | |
| 88. |
Kaizen is a method aimed at ______ reduction below standard level, but without negative effects on quality, staff, safety, etc. |
| A. | Cost |
| B. | Waste |
| C. | Non – value activities |
| D. | Constraints |
| Answer» A. Cost | |
| 89. |
______________ is introduced as a technique that aims to manage product costs throughout the design stage. |
| A. | Process Costing |
| B. | Product Costing |
| C. | Target Costing |
| D. | Strategic Costing |
| Answer» C. Target Costing | |
| 90. |
Target costing is a ___________ costing methodology, in which the selling price and the required profit margin are used to determine the allowable cost for manufacturing a new/existing product. |
| A. | Modern |
| B. | Reverse |
| C. | Product |
| D. | Process |
| Answer» B. Reverse | |
| 91. |
_________ Costing Also known as delayed costing, |
| A. | Backflush |
| B. | Conventional |
| C. | Modern |
| D. | Competitive |
| Answer» A. Backflush | |
| 92. |
Backflush costing is an accounting method that records costs after a good is sold or a service is ___________. |
| A. | Initiated |
| B. | Progressed |
| C. | Completed |
| D. | Planned |
| Answer» C. Completed | |
| 93. |
____________ means change for the better. |
| A. | Kaizen |
| B. | Theory of Constraints |
| C. | Kanban |
| D. | C. JIT |
| Answer» A. Kaizen | |
| 94. |
TOC stands for _____________________. |
| A. | Theory of Competition |
| B. | Theory of Cost |
| C. | Theory of Constraints |
| D. | Theory of Complexity |
| Answer» C. Theory of Constraints | |
| 95. |
TQM stands for _____________________. |
| A. | Total Quality Misrepresentation |
| B. | Team Quality Manager |
| C. | Total Quality Management |
| D. | Theoretical Quality Management |
| Answer» C. Total Quality Management | |
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