Cost Accounting MCQs with Answers For All Kind of Exams
Cost Accounting MCQs with Answers for All Exams
The basic objective of cost accounting is__________.
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
ANSWER: C
The direct cost incurred can be identified with ________.
A. each department.
B. each unit of output.
C. each month.
D. each executive.
ANSWER: B
Overhead cost is the total of ____________.
A. all indirect costs.
B. all direct costs.
C. indirect and direct costs.
D. all specific costs.
ANSWER: A
Cost classification can be done in __________.
A. two ways.
B. three ways.
C. four ways.
D. several ways.
ANSWER: D
Costing refers to the techniques and processes of __________ .
A. ascertainment of costs.
B. allocation of costs.
C. apportion of costs.
D. distribution of costs.
ANSWER: A
Wages paid to a labor who was engaged in production activities can be termed as ___________.
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
Classification of cost is useful to ______________.
A. to find gross profit.
B. to find net profit.
C. to identify costs.
D. to identify efficiency.
ANSWER: C
Elements of costs are _________.
A. three types.
B. four types.
C. five types.
D. seven types.
ANSWER: A
Direct expenses are also called ________ .
A. major expenses.
B. chargeable expenses.
C. overhead expenses.
D. sundry expenses.
ANSWER: B
Indirect material used in production is classified as.
A. office overhead.
B. selling overhead.
C. distribution overhead.
D. production overhead.
ANSWER: D
Warehouse rent is a part of _________.
A. prime cost.
B. factory cost.
C. distribution cost.
D. production cost.
ANSWER: C
Cost Accounting MCQs for FPSC
Indirect material scrap is adjusted along with ________.
A. prime cost.
B. factory cost.
C. labour cost.
D. cost of goods sold.
ANSWER: B
Sale of defectives is reduced from _________.
A. prime cost.
B. works cost.
C. cost of production.
D. cost of sales.
ANSWER: C
Tender is an __________.
A. estimation of profit.
B. estimation of cost.
C. estimation of selling price.
D. estimation of units.
ANSWER: C
Cost of sales plus profit is __________.
A. selling price.
B. value of finished product.
C. value of goods produced.
D. value of stocks.
ANSWER: A
Prime cost includes.
A. direct materials, direct wages and indirect expenses .
B. indirect materials and indirect labour and indirect expenses.
C. direct materials, direct wages and direct expenses.
D. direct materials, indirect wages and indirect expenses.
ANSWER: C
Total of all direct costs is termed as _______.
A. prime cost.
B. works cost.
C. cost of sales.
D. cost of production.
ANSWER: A
Depreciation of plant and machinery is a part of ___________.
A. factory overhead.
B. selling overhead.
C. distribution overhead.
D. administration overhead.
ANSWER: A
Audit fees is a part of __________.
A. works on cost.
B. selling overhead.
C. distribution overhead.
D. administration overhead.
ANSWER: D
Counting house salary is part of _____. A. factory overhead.
B. selling overhead.
C. distribution overhead.
D. administration overhead.
ANSWER: D
Cost Accounting Solved MCQs
for PPSC, KPPSC, SPSC,BPSC
One of the most important tools in cost planning is _______.
A. direct cost.
B. budget.
C. cost sheet.
D. marginal costing.
ANSWER: C
An example of variable cost is __________.
A. property tax.
B. interest on capital.
C. direct material cost.
D. depreciation of machinery.
ANSWER: C
Cost accounting concepts include all the following except ________.
A. planning.
B. controlling.
C. profit sharing.
D. product costing.
ANSWER: C
Toy manufacturing industry should use ___________.
A. unit costing.
B. process costing.
C. batch costing.
D. multiple costing.
ANSWER: C
Job costing used in ____ .
A. paper mills.
B. chemical works.
C. printing works.
D. textile mill.
ANSWER: C
When premises are owned, a charge for rent is _________.
A. production cost.
B. imputed cost.
C. marginal cost.
D. cost of sales.
ANSWER: B
A document which provides for the detailed cost centre and cost unit is ______.
A. tender.
B. cost sheet.
C. . invoice.
D. profit statement.
ANSWER: B
Cost unit of a sugar industry can be _______.
A. per litre.
B. per tonne.
C. per acre.
D. per metre.
ANSWER: B
The ascertainment of costs after they have been incurred is known as _____.
A. marginal costing.
B. historical costing.
C. sunk cost.
D. notional cost.
ANSWER: B
Direct material is a _________.
A. fixed cost.
B. variable cost.
C. semi variable cost.
D. semi fixed cost.
ANSWER: A
Past Paper MCQs of Cost Accounting
for PTS, NTS, ATS
Direct material is a ______.
A. manufacturing cost.
B. administrative cost.
C. selling cost.
D. distribution cost.
ANSWER: A
The most important element of cost in manufacturing industries is __________.
A. material.
B. labour.
C. direct costs.
D. indirect costs.
ANSWER: C
Continuous stock taking is a part of __________.
A. annual stock taking.
B. perpetual inventory.
C. ABC analysis.
D. VED analysis.
ANSWER: B
The ratios which reflect managerial efficiency in handling the assets is ________.
A. turnover ratios.
B. profitability ratios.
C. short term solvency ratio.
D. long term solvency ratio.
ANSWER: A
The ratios which reveal the final result of the managerial policies and performance is _____________.
A. turnover ratios.
B. profitability ratios.
C. short term solvency ratio.
D. long term solvency ratio.
ANSWER: B
Return on investment is a _____________.
A. turnover ratios.
B. short term solvency ratio.
C. profitability ratios.
D. long term solvency ratio.
ANSWER: C
Net profit ratio is a ___________.
A. turnover ratio.
B. long term solvency ratio.
C. short term solvency ratio.
D. profitability ratio. ANSWER: D
Stock turnover ratio is a __________.
A. turnover ratio.
B. profitability ratio.
C. short term solvency ratio.
D. long term solvency ratio.
ANSWER: A
Current ratio is a _________.
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.
ANSWER: A
Proprietary ratio is a ___________.
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.
ANSWER: B
MCQs of Cost Accounting for ETEA
Fixed assets ratio is a __________.
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.
ANSWER: B
Fixed assets turnover ratio is a ______.
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.
ANSWER: D
The ratio which measures the profit in relation to capital employed is known as_______.
A. return on investment.
B. gross profit ratio.
C. operating ratio.
D. operating profit ratio.
ANSWER: A
The ratio which determines the profitability from the shareholders point of view is____.
A. return on investment.
B. gross profit ratio.
C. return on shareholders funds.
D. operating profit ratio.
ANSWER: C
Return on equity is also called ___________.
A. return on investment.
B. gross profit ratio.
C. return on shareholders funds.
D. return on net worth.
ANSWER: D
Preliminary expenses is an example of ___________.
A. fixed assets.
B. current assets.
C. fictitious assets.
D. current liabilities.
ANSWER: C
Prepaid expenses is an example of _______.
A. fixed assets.
B. current assets.
C. fictitious assets.
D. current liabilities.
ANSWER: B
The ratio which is calculated to measure the productivity of total assets is_________.
A. return on equity.
B. return on share holders funds.
C. return on total assets.
D. return on equity share holders funds.
ANSWER: C
The ratio which shows the proportion of profits retained in the business out of the current years profits is _________.
A. retained earnings ratio.
B. pay out ratio.
C. earnings per share.
D. price earnings ratio.
ANSWER: A
The dividend is related to the market value of shares in _________.
A. interest cover ratio.
B. fixed dividend cover ratio.
C. debt service coverage ratio.
D. dividend yield ratio.
ANSWER: D
Cost Accounting Past tests MCQs with Answers
Turnover ratio is also known as ______________.
A. activity ratios.
B. solvency ratios.
C. liquidity ratios.
D. profitability ratios.
ANSWER: A
Inventory or stock turnover ratio is also called __________.
A. stock velocity ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.
ANSWER: A
Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital investment __________.
A. stock velocity ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.
ANSWER: A
Sales-Gross Profit = _________.
A. net profit.
B. cost of production.
C. administrative expenses.
D. cost of goods sold.
ANSWER: D
Opening stock + purchases + direct expenses-closing stock = __________.
A. net profit.
B. cost of production.
C. administrative expenses.
D. cost of goods sold.
ANSWER: D
Which ratio measures the number of times the receivables are rotated in a year in terms of sales _________.
A. stock turnover ratio.
B. debtors turnover ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.
ANSWER: B
Debtors turnover ratio is also called _______.
A. stock turnover ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio
ANSWER: B
Creditors turnover ratio is also called ________________.
A. stock turnover ratio.
B. debtors velocity ratio.
C. accounts payables ratio.
D. working capital turnover ratio.
ANSWER: C
The ratio of current assets to current liabilities is called __________.
A. liquid ratio.
B. acid test ratio.
C. current ratio.
D. cash position ratio.
ANSWER: C
Internationally accepted current ratio is ___________.
A. 1:1.
B. 2:1.
C. 3:1.
D. 4:1.
ANSWER: B
Cost Accounting MCQs with Answers
Liquid ratio is also called __________.
A. super quick ratio.
B. acid test ratio.
C. current ratio.
D. cash position ratio.
ANSWER: B
Current assets- (stock + prepaid expenses = _____________.
A. current assets.
B. fixed assets.
C. liquid assets.
D. fictitious assets.
ANSWER: C
An ideal liquid ratio is _____________.
A. 0.25 : 1.
B. 0.50 : 1.
C. 0.75 : 1.
D. 1 : 1.
ANSWER: D
An ideal cash position ratio is ___________ .
A. 0.25 : 1.
B. 0.50 : 1.
C. 0.75 : 1.
D. 1 : 1.
ANSWER: C
Cost Accounting MCQs with Answers
An ideal debt equity ratio is ____________.
A. 1.
B. 2.
C. 3.
D. 4.
ANSWER: A
The ratio establishes the relationship between fixed assets and long-terms funds is ______.
A. current ratio.
B. fixed assets ratio.
C. fixed assets turnover ratio.
D. debt equity ratio.
ANSWER: B
The ratio compares the shareholders funds and total tangible assets is ___________.
A. capital gearing ratio.
B. fixed assets turnover ratio.
C. proprietary ratio.
D. debt equity ratio.
ANSWER: C
The ratio expresses the relationship between the proprietors funds and the total tangible assets is ___________.
A. capital gearing ratio.
B. fixed assets turnover ratio.
C. proprietary ratio.
D. debt equity ratio.
ANSWER: C
The ratio establishes relationship between fixed interest and dividend bearing funds and equity shareholders funds is __________.
A. capital gearing ratio.
B. fixed assets turnover ratio.
C. proprietary ratio.
D. debt equity ratio.
ANSWER: A
Capital gearing ratio is also known as ____.
A. leverage ratio.
B. fixed assets turnover ratio.
C. proprietary ratio.
D. debt equity ratio.
ANSWER: A
Cost Accounting MCQs with Answers
Shareholders funds + Long-term loans = __________ .
A. current assets.
B. current liabilities.
C. fixed assets.
D. capital employed.
ANSWER: D
Low turnover of stock ratio indicates _________.
A. solvency position.
B. monopoly situation.
C. overinvestment in inventory.
D. liquidity position.
ANSWER: C
Net capital employed is equal to _______.
A. total assets minus total liabilities.
B. fixed assets plus net-working capital.
C. total assets minus long-term liabilities.
D. total assets.
ANSWER: B
Return on investments is a ________.
A. profit and loss account ratio.
B. balance sheet ratio.
C. combined ratio.
D. turnover ratio.
ANSWER: C
Ratio of net profit before interest and tax to sales is __________.
A. solvency ratio.
B. capital gearing.
C. turnover ratio.
D. operating profit ratio.
ANSWER: D
All those assets which are converted into cash in the normal course of business within one year are known as __________.
A. fixed assets.
B. current assets.
C. fictitious assets.
D. wasting assets.
ANSWER: B
All those liabilities which are payable in cash in the normal course of business within a period of one year are called ___________.
A. long term liabilities.
B. overdraft.
C. short term loans.
D. current liabilities.
ANSWER: D
Any transaction between a current account and another current account does not Affect _________.
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
Provision for Income tax is ________ .
A. non operating income.
B. operating expense.
C. operating income.
D. appropriation of profits.
ANSWER: D
The branch of accounting which primarily deals with processing and presenting accounting data for internal use in a concern is ____________.
A. inflation accounting.
B. cost accounting.
C. financial accounting.
D. management accounting.
ANSWER: D
Cost Accounting Past Paper MCQs
The term management accountancy was first used in __________.
A. 1950.
B. 1939.
C. 1910.
D. 1947.
ANSWER: B
Management accounting is also known as ________.
A. price level accounting.
B. historical cost accounting.
C. financial accounting.
D. decision accounting.
ANSWER: D
The prime function of management accounting is to _______.
A. assist tax authorities.
B. assist the management in performing its functions effectively.
C. interpret the financial data.
D. record business transactions.
ANSWER: B
Management accounting provides valuable services to management in performing ____.
A. coordinating functions.
B. controlling functions.
C. planning functions.
D. all managerial functions.
ANSWER: D
Management accounting analyses accounting data with the help of ______.
A. auditors.
B. statutory forms.
C. tools and techniques.
D. formula.
ANSWER: C
Management accounting is suitable for _______.
A. large industries and trading concerns.
B. co-operative societies.
C. small businesses.
D. non-profit organizations.
ANSWER: A
Management accounting and cost accounting functions are _________.
A. neutral in effect.
B. complementary in nature.
C. contradictory in nature.
D. does not relate to each other.
ANSWER: B
Management accounting use _____________.
A. quantitative data only.
B. qualitative data only.
C. descriptive data only.
D. both qualitative and qualitative data.
ANSWER: D
The tracing or reassigning of costs to one or more cost objectives is referred to as ______.
A. cost allocation
B. historical costing
C. step up costing
D. cost apportionment
ANSWER: A
Production cost under marginal costing includes _____________.
A. prime cost only .
B. prime cost and fixed overhead .
C. prime cost and variable overhead.
D. prime cost, variable overhead and fixed overhead.
ANSWER: C
Solved Cost Accounting MCQs with Answers
Contribution margin is also known as __________.
A. marginal income .
B. gross profit.
C. net profit.
D. net loss. ANSWER: A
Period costs are _______.
A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.
ANSWER: D
Contribution margin is equal to __________.
A. fixed cost – loss.
B. profit + variable cost.
C. fixed cost- profit.
D. sales- profit.
ANSWER: A
Profit volume Ratio is an indicator of __________.
A. the rate at which goods are sold .
B. the volume of sales .
C. the volume of profit.
D. the rate of profit.
ANSWER: D
Margin of Safety is the difference between _______.
A. planned sales and planned profit .
B. actual sales and break-even sales.
C. planned sales and actual sales .
D. planned sales and planned expenses.
ANSWER: B
An increase in variable costs ___________.
A. increases p/v ratio .
B. increases the profit.
C. reduces contribution .
D. increase margin of safety.
ANSWER: C
An increase in selling price _________.
A. increases the break-even point.
B. decreases the break-even point.
C. does not affect the break-even point.
D. optimize the break even point.
ANSWER: B
A large Margin of Safety indicates ________.
A. over production.
B. over capitalization .
C. the soundness of the business.
D. under capitalization.
ANSWER: C
Angle of incidence is _________.
A. the angle between the sales line and the total cost line.
B. the angle between the sales line and the y-axis.
C. the angle between the sales line and the x-axis.
D. the angle between the sales line and the total profit line.
ANSWER: A
Absorption costing is also known as ____________ .
A. historical costing.
B. real costing.
C. marginal costing.
D. real costing .
ANSWER: A
Cost Accounting MCQs with Answers
Under marginal costing stock are valued at __________.
A. fixed cost.
B. semi-variable cost.
C. variable cost.
D. market price.
ANSWER: C
Absorption costing lays emphasis on __________.
A. production.
B. sales.
C. marketing .
D. advertising .
ANSWER: A
Marginal costing lays emphasis on _________.
A. production.
B. sales.
C. marketing .
D. advertising .
ANSWER: B
Selling price – marginal cost = ________.
A. fixed cost.
B. semi-variable cost.
C. contribution.
D. break-even point.
ANSWER: C
Total sales – total variable cost _______.
A. fixed cost.
B. semi-variable cost.
C. contribution.
D. break-even point.
ANSWER: C
Fixed cost + profit = ________.
A. fixed cost.
B. semi-variable cost.
C. margin of safety.
D. contribution.
ANSWER: D
A high P/V ratio indicates __________.
A. high profitability.
B. low profitability.
C. high loss.
D. break even.
ANSWER: A
A low P/V ratio indicates _____________.
A. high profitability.
B. low profitability.
C. high loss.
D. break even.
ANSWER: B
Fixed cost / P/V ratio = __________.
A. break even point.
B. margin of safety.
C. contribution.
D. variable cost.
ANSWER: A
Profit / P/V ratio = __________.
A. break even point.
B. margin of safety
C. contribution.
D. variable cost.
ANSWER: B
Important Cost Accounting MCQs with Answers
Sales x P/V ratio- fixed cost = _______ .
A. break even point.
B. margin of safety.
C. profit/ loss.
D. variable cost.
ANSWER: C
Office rent is an example of _______.
A. fixed cost.
B. variable cost.
C. semi-variable cost.
D. direct cost.
ANSWER: A
Raw material is an example of __________.
A. fixed cost.
B. variable cost.
C. semi-variable cost.
D. direct cost.
ANSWER: B
Depreciation is an example of _______________.
A. fixed cost.
B. variable cost.
C. semi-variable cost.
D. direct cost.
ANSWER: A
Marginal costing is a technique of _______________.
A. cost reduction.
B. cost control.
C. budgeting.
D. standard costing.
ANSWER: B
The costs which increase or decrease in proportion to the output and sales are known As ______.
A. fixed cost.
B. variable cost.
C. semi-variable cost.
D. total cost.
ANSWER: B
Break even point is also called _____________.
A. no profit, no loss point.
B. profit zone.
C. loss zone.
D. profit and loss zone.
ANSWER: A
Break even chart is a graphical representation of _______. A. absorption costing.
B. marginal costing.
C. full costing.
D. contract costing.
ANSWER: B
Contribution – fixed cost = ___________.
A. sales .
B. variable cost.
C. profit.
D. fixed cost.
ANSWER: C
Break even sales x P/V ratio = ___________.
A. variable cost.
B. fixed cost.
C. semi-variable cost.
D. contribution.
ANSWER: B
Cost Accounting Multiple Choice Questions with Answers
The budget is a ______________.
A. a post-mortem analysis .
B. a substitute of management .
C. an aid to management .
D. calculation .
ANSWER: C
One of the most important tools of cost planning is _________.
A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.
ANSWER: A
Sales budget is a _________.
A. Functional budget.
B. Expenditure budget.
C. Master budget .
D. Flexible budget.
ANSWER: A
The budget which usually takes the form of budgeted profit and loss account and balance sheet is known as ___________.
A. Flexible budget .
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B
Which of the following is usually a long-term budget _______.
A. Fixed budget.
B. Cash budget.
C. Sales budget.
D. Capital expenditure budget.
ANSWER: D
The fixed-variable cost classification has `a special significance in the preparation of ________.
A. Capital budget.
B. Cash budget.
C. Master budget .
D. Flexible budget .
ANSWER: D
Operation budgets normally cover a period of _____.
A. one to ten years.
B. one to two years.
C. one to five years.
D. one year or less.
ANSWER: D
The entire process of preparing the budgets is known as _______.
A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C
Budgetary control starts with ________________.
A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.
ANSWER: C
Budget designed to remain constant irrespective of the level of activity attained is called _________. A. Fixed budget.
B. Flexible budget.
C. Sales budget.
D. Production budget.
ANSWER: A
Cost Accounting Solved MCQs
Long-term budgets are prepared for _______________.
A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.
ANSWER: D
The budget which shows the budgeted quantity of output to be produced during a specific period is __________.
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
D. Production budget
ANSWER: D
Material consumption budget is prepared on the basis of ______________.
A. Production budget.
B. Sales budget.
C. Fixed budget.
D. Flexible budget.
ANSWER: A
Material budget consists of two parts, one is the consumption budget and another Is ________.
A. Material purchase budget.
B. Material sales budget.
C. Material production budget.
D. Material budget.
ANSWER: A
Materials purchase budget is prepared on the basis of_________ .
A. Material sales budget.
B. Material consumption budget.
C. Material production budget.
D. Material budget.
ANSWER: B
A fixed budget is prepared for only _________.
A. One level of activity.
B. Range of activity.
C. Two level of activity.
D. Three level of activity.
ANSWER: A
The budget starts without any base is _______________.
A. Master budget.
B. Flexible budget.
C. Zero base budgeting.
D. Fixed budget.
ANSWER: C
In production budget closing stock is added with ___________.
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
In production budget opening stock is deducted with_____________.
A. expense.
B. sales.
C. purchase.
D. material.
ANSWER: B
Material requisition is meant for _________.
A. purchase of material.
B. supply of material from stores.
C. sale of material.
D. storage of material.
ANSWER: B
Cost Accounting MCQs with Answers For Competitive Exams
Stock control through stock levels and EOQ is called ________.
A. demand and supply method.
B. perpetual inventory system.
C. control by important and exception
D. automatic order method.
ANSWER: B
JIT inventory system is _____________.
A. Just In Time.
B. Just Inventory Time.
C. Job In Time.
D. Job Inventory Time.
ANSWER: A
Perpetual inventory system involves _________.
A. bincard and stores ledger.
B. bill of material and material requisition.
C. purchase requisition and purchase order.
D. inward and outward invoices.
ANSWER: A
FIFO is____________.
A. Fast Investment in Future Order.
B. First In First Out.
C. Fast In Fast Out
D. Fast Issue Of Fast Order.
ANSWER: D
LIFO method of pricing of materials is more suitable when ______.
A. material prices are rising.
B. material prices are falling.
C. material prices are constant.
D. material prices are fluctuating.
ANSWER: A
The average method of pricing the material issues is useful when_______.
A. material prices are rising.
B. material prices are falling.
C. material prices are constant.
D. material prices are fluctuating.
ANSWER: D
Scrap is _________.
A. residue of material.
B. wastage of material.
C. surplus material.
D. abnormal loss of material.
ANSWER: A
Material is issued by store keeper against.
A. material requisition.
B. material order.
C. goods received note.
D. purchase requisition.
ANSWER: A
EOQ stands for______________.
A. Economic Order Quantity.
B. Essential Order Quantity.
C. Economic Output Quantity.
D. Essential Output Quantity.
ANSWER: A
The document which is prepared after receiving and inspecting material_____.
A. material record note.
B. goods received note.
C. bill of material.
D. inventory record.
ANSWER: B
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