New Microsoft Word Document (12)

(1)

1.

The wage costs which are The wage costs which are incurred in converting materials into finishedincurred in converting materials into finished goods would be known as:

goods would be known as: Your Answer:

Your Answer: Direct labourDirect labour

2.

Allocating indirect overheads to the direct cost of Allocating indirect overheads to the direct cost of production is knownproduction is known as:

as:

Your Answer:

Your Answer: Absorption costingAbsorption costing

3.

Which of the following is a reason why a firm would want to Which of the following is a reason why a firm would want to implementimplement ABC?

ABC?

Your Answer:

Your Answer: Costs of implementation are too highCosts of implementation are too high Correct Answer:

Correct Answer: It may help make decision making more accurateIt may help make decision making more accurate

4.

When costing takes into account only the variable cost When costing takes into account only the variable cost and not the fulland not the full production cost we will be using:

production cost we will be using: Your Answer:

Your Answer: Activity based costingActivity based costing Correct Answer:

Correct Answer: Marginal costingMarginal costing

5.

Marking up the cost of a product by an amount to represent profit isMarking up the cost of a product by an amount to represent profit is known as:

known as:

Your Answer:

Your Answer: Price discriminationPrice discrimination Correct Answer:

Correct Answer: Full cost pricingFull cost pricing

6.

An area of a business which collects costs is known as:An area of a business which collects costs is known as: Your Answer:

Your Answer: Cost centreCost centre

7.

Repairs to factory machinery would be classed as:Repairs to factory machinery would be classed as: Your Answer:

(2)

8.

Contribution can be defined as:Contribution can be defined as: Your Answer:

Your Answer: Selling price less variable costsSelling price less variable costs

9.

Any abnormal losses on production are recorded by Any abnormal losses on production are recorded by which one of thewhich one of the following?

following?

Debit

Credit

Debit

Credit

A Abnormal loss account Process account

B Abnormal

B Abnormal loss account Cashbook

loss account Cashbook

C

C Profit

Profit &

& Loss

Loss account

account Cashbook

Cashbook

D

D Process

Process account

account

abnormal

abnormal loss

loss account

account

Your Answer: Your Answer: AA

10.

A collection of individual costs within a single A collection of individual costs within a single heading is known as:heading is known as: Your Answer:

Your Answer: Cost poolCost pool

11.

The total of all direct costs of production is also known as:The total of all direct costs of production is also known as: Your Answer:

Your Answer: Prime costPrime cost

12.

If a firm If a firm experiences an underabsorption of overheads then the closingexperiences an underabsorption of overheads then the closing stock should be adjusted in which way?

stock should be adjusted in which way? Your Answer:

Your Answer: No adjustment should be madeNo adjustment should be made

13.

The best way of The best way of allocating fixed overheads between products is:allocating fixed overheads between products is: Your Answer:

Your Answer: As a proportion of direct cost incurred by eachAs a proportion of direct cost incurred by each product

product Correct Answer:

(3)

14.

Raw materials which are incorporated into goods sold Raw materials which are incorporated into goods sold but are notbut are not easily identifiable to the goods being made

easily identifiable to the goods being made would be known as:would be known as: Your Answer:

Your Answer: Work in progressWork in progress Correct Answer:

Correct Answer: Indirect overheadsIndirect overheads

15.

Wages for staff maintaining machines in factory would Wages for staff maintaining machines in factory would be classed as:be classed as: Your Answer:

Your Answer: Administration expensesAdministration expenses Correct Answer:

Correct Answer: Factory indirect expensesFactory indirect expenses

16.

Which of the following would not appear as a direct cost?Which of the following would not appear as a direct cost? Your Answer:

Your Answer: Royalties on each unit Royalties on each unit producedproduced Correct Answer:

Correct Answer: Power costs for factory buildingsPower costs for factory buildings

17.

Sales staff salaries would be classed as:Sales staff salaries would be classed as: Your Answer:

Your Answer: Indirect expensesIndirect expenses Correct Answer:

Correct Answer: Selling and distribution expensesSelling and distribution expenses

18.

A minor product produced at the same time as the main product mayA minor product produced at the same time as the main product may be known as a:

be known as a: Your Answer:

Your Answer: ScrapScrap Correct Answer:

Correct Answer: By productBy product

19.

When deciding to accept a special order at below the normal sellingWhen deciding to accept a special order at below the normal selling price a firm

price a firm would consider which cost?would consider which cost? Your Answer:

Your Answer: Absorption costAbsorption cost Correct Answer:

Correct Answer: Marginal costMarginal cost

20.

Which of the following would not appear Which of the following would not appear as a factory as a factory overhead?overhead? Your Answer:

(4)

Correct Answer:

Correct Answer: Delivery costs for raw materialsDelivery costs for raw materials

21.

Which of the following would not normally be Which of the following would not normally be included in the primeincluded in the prime cost of

cost of production?production? Your Answer:

Your Answer: Carriage on raw materials.Carriage on raw materials. Correct Answer:

Correct Answer: Salaries.Salaries.

22.

Which of the following costs has Which of the following costs has no relationship with the level ofno relationship with the level of output?

output?

Your Answer:

Your Answer: Stepped fixed costs.Stepped fixed costs. Correct Answer:

Correct Answer: Fixed costs.Fixed costs.

23.

Depreciation of machinery would be classed as:Depreciation of machinery would be classed as: Your Answer:

Your Answer: direct expenses.direct expenses. Correct Answer:

Correct Answer: factory indirect expenses.factory indirect expenses.

24.

Adding indirect production expenditure to the direct Adding indirect production expenditure to the direct cost of productioncost of production can be known as:

can be known as: Your Answer:

Your Answer: full costing.full costing.

25.

The correct treatment of an amount paid per item produced to theThe correct treatment of an amount paid per item produced to the owner of a patent would be to include it in which of

owner of a patent would be to include it in which of the following?the following? Your Answer:

Your Answer: Administration expenses.Administration expenses. Correct Answer:

Correct Answer: Direct expenses.Direct expenses.

26.

When using Activity Based Costing, a cost centre When using Activity Based Costing, a cost centre would be normally bewould be normally be known as a:

known as a:

Your Answer:

Your Answer: cost driver.cost driver. Correct Answer:

(5)

27.

Which of the following would not normally be Which of the following would not normally be classed as anclassed as an administration expense?

administration expense? Your Answer:

Your Answer: Secretarial wages.Secretarial wages. Correct Answer:

Correct Answer: Salary of factory manager.Salary of factory manager.

28.

A cost which is A cost which is connected with production but does not vary directlyconnected with production but does not vary directly with the level of output may be known as:

with the level of output may be known as: Your Answer:

Your Answer: factory indirect expense.factory indirect expense.

The wage costs which are incurred in

converting materials into finished goods would

be known as:

Salaries Salaries Direct labour Direct labour Wages & salaries Wages & salaries Indirect labour Indirect labour

Allocating indirect overheads to the direct

cost of production is known as:

Absorption costing Absorption costing Contribution costing Contribution costing Marginal costing Marginal costing Activity based costing Activity based costing

Which of the following is

a reason why a firm

would want to implement ABC?

Costs of implementation are too high Costs of implementation are too high

(6)

The precision of ABC may be to small to justify The precision of ABC may be to small to justify its

its implementatioimplementationn

It may help make decision making more It may help make decision making more accurate

accurate

The firm only produces a

The firm only produces a single productsingle product

When costing takes into account only the

variable cost and not the full production cost

we will be using:

Absorption costing Absorption costing Activity based costing Activity based costing Full costing

Full costing Marginal costing Marginal costing

Marking up the cost of a

product by an

amount to represent profit is known as:

Full cost pricing Full cost pricing Price discrimination Price discrimination Price skimming Price skimming Predatory pricing Predatory pricing

An area of a business which

collects costs is

known as:

Branch Branch Profit centre Profit centre Cost unit Cost unit Cost centre Cost centre

(7)

Repairs to factory machinery would be

classed as:

Direct expenses Direct expenses

Factory indirect expenses Factory indirect expenses Administration expenses Administration expenses Direct materials

Direct materials

Contribution can be defined as:

Sales revenue less fixed costs Sales revenue less fixed costs Selling price less total costs Selling price less total costs Fixed costs less variable costs Fixed costs less variable costs Selling price less variable costs Selling price less variable costs

Any abnormal losses on production are

recorded by which one of the following?

Debit

Credit

Debit

Credit

A

Abnormal loss

account

Process account

B

Abnormal loss

account

Cashbook

C

Profit & Loss

account

Cashbook

D Process account

abnormal loss

account

A A B B C C

(8)

D D

A collection of individual costs within a single

heading is known as:

Cost total Cost total Cost pool Cost pool Cost centre Cost centre Overhead centre Overhead centre

The total of all direct costs of

production is

also known as:

Prime cost Prime cost Production costs Production costs Variable cost Variable cost Total cost Total cost

If a firm experiences an underabsorption of

overheads then the closing stock should be

adjusted in which way?

Shortfall should be added to closing stock value Shortfall should be added to closing stock value A provision equivalent to amount should be A provision equivalent to amount should be deducted from value

deducted from value

No adjustment should be made No adjustment should be made

Shortfall should be subtracted from closing Shortfall should be subtracted from closing stock value

(9)

The best way of allocating fixed overheads

between products is:

Equally between different products Equally between different products There is no ‘best’ way

There is no ‘best’ way of allocating overheadsof allocating overheads As a proportion of direct cost incurred by each As a proportion of direct cost incurred by each product

product

Based on number people

Based on number people involved in productioninvolved in production of each product

of each product

Raw materials which are incorporated into

goods sold but are not

easily identifiable to

the goods being made would be known as:

Indirect overheads Indirect overheads Direct materials Direct materials Direct overheads Direct overheads Work in progress Work in progress

Wages for staff maintaining machines in

factory would be classed as:

Factory indirect expenses Factory indirect expenses Direct materials Direct materials Direct labour Direct labour Administration expenses Administration expenses

Which of the following would not appear as

a

direct cost?

Carriage inwards of raw materials Carriage inwards of raw materials

(10)

Power costs for factory buildings Power costs for factory buildings Wages for production staff Wages for production staff Royalties on each unit

Royalties on each unit producedproduced

Sales staff salaries would be classed as:

Direct labour Direct labour

Administration expenses Administration expenses

Selling and distribution expenses Selling and distribution expenses Indirect expenses

Indirect expenses

A minor product produced at the same time

as the main product may be known as a:

By product By product Supplementary product Supplementary product Joint product Joint product Scrap Scrap

When deciding to accept a special order at

below the normal selling price a firm would

consider which cost?

Absorption cost Absorption cost Full cost Full cost Overhead cost Overhead cost Marginal cost Marginal cost

(11)

Which of the following would not appear as

a

factory overhead?

Power for machines Power for machines

Depreciation of factory equipment Depreciation of factory equipment Delivery costs for raw materials Delivery costs for raw materials Wages of factory

Wages of factory supervisorssupervisors

Which of the following would not normally be

included in the prime cost of production?

Cost of raw materials. Cost of raw materials. Salaries.

Salaries.

Direct expenses. Direct expenses.

Carriage on raw materials. Carriage on raw materials.

Which of the following costs has no

relationship with the level of output?

Fixed costs. Fixed costs. Variable costs. Variable costs. Semi-variable costs. Semi-variable costs. Stepped fixed costs. Stepped fixed costs.

Depreciation of machinery would be classed

as:

administration expenses. administration expenses.

(12)

factory indirect expenses. factory indirect expenses. direct materials.

direct materials. direct expenses. direct expenses.

Adding indirect production expenditure to the

direct cost of production can be known

as:

marginal costing.

marginal costing. full costing. full costing.

activity based costing. activity based costing. contribution costing. contribution costing.

The correct treatment of an amount paid per

item produced to the owner of a patent

would be to include it in

which of the

following?

Administration expenses. Administration expenses. Indirect expenses. Indirect expenses. Distribution expenses. Distribution expenses. Direct expenses. Direct expenses.

When using Activity Based Costing, a cost

centre would be normally be known as a:

cost driver. cost driver. profit centre. profit centre. cost unit. cost unit. cost pool. cost pool.

(13)

Which of the following would not normally be

classed as an administration expense?

Depreciation of office photocopier. Depreciation of office photocopier. Salary of factory manager.

Salary of factory manager. Secretarial wages.

Secretarial wages. Office heating. Office heating.

A cost which is connected with production

but does not vary directly with the level of

output may be known as:

variable cost.

factory indirect expense. factory indirect expense. direct cost.

direct cost.

selling and distribution expense. selling and distribution expense.

1.

The role of The role of management accounmanagement accounting does not normally include theting does not normally include the function of

function of

Your Answer:

Your Answer: decision-makingdecision-making Correct Answer:

Correct Answer: cash managementcash management

2.

The role of The role of financial management does not usually includefinancial management does not usually include responsibility for

responsibility for Your Answer:

Your Answer: treasury managementtreasury management Correct Answer:

(14)

3.

The management accounting concepts, additional to the The management accounting concepts, additional to the fundamenfundamentaltal accounting concepts do not include the

accounting concepts do not include the Your Answer:

Your Answer: going concern conceptgoing concern concept

4.

Total costs are comprised of Total costs are comprised of Your Answer:

Your Answer: variable costs plus fixed costsvariable costs plus fixed costs Correct Answer:

Correct Answer: variable costs plus fixed costs plus semi-variablevariable costs plus fixed costs plus semi-variable costs

costs

5.

Prime costs are comprised of Prime costs are comprised of Your Answer:

Your Answer: materials costs plus direct labour costsmaterials costs plus direct labour costs Correct Answer:

Correct Answer: production overheads plus materials costs plusproduction overheads plus materials costs plus direct labour costs

direct labour costs

6.

Cost allocation is the charging of aCost allocation is the charging of a Your Answer:

Your Answer: cost centre with the direct labour and materialscost centre with the direct labour and materials costs relating to the cost

costs relating to the cost centrecentre Correct Answer:

Correct Answer: cost centre with the overhead costs resulting solelycost centre with the overhead costs resulting solely from the existence of the cost

from the existence of the cost centrecentre

7.

Which of the following examples of bases Which of the following examples of bases of cost apportionment mayof cost apportionment may relate to rent,

relate to rent, heating and lighting?heating and lighting? Your Answer:

Your Answer: number of employeesnumber of employees Correct Answer:

Correct Answer: areaarea

8.

Which costs are charged to Which costs are charged to a product using the method of a product using the method of absorptionabsorption costing

costing

Your Answer:

Your Answer: materials costs plus direct labour costsmaterials costs plus direct labour costs Correct Answer:

(15)

9.

Using the marginal costing method, contribution is equal to total salesUsing the marginal costing method, contribution is equal to total sales revenue less

revenue less Your Answer:

Your Answer: variable costsvariable costs

10.

Marginal costing may be preferred to Marginal costing may be preferred to absorption costing becausabsorption costing because ite it Your Answer:

Your Answer: complies with International Accounting Standardcomplies with International Accounting Standard (IAS) 2

(IAS) 2 Correct Answer:

Correct Answer: enables use of the opportunity cost approachenables use of the opportunity cost approach

The role of management accounting does not normally include

the function of

decision-making decision-making planning and control planning and control cash management cash management product costing product costing

The role of financial management does not usually include

responsibility for

corporate finance corporate finance risk management risk management treasury management treasury management

compliance with accounting standards compliance with accounting standards

The management accounting concepts, additional to the

fundamental accounting concepts do not include the

reliability concept reliability concept going concern concept going concern concept controllability concept controllability concept

(16)

interdependenc

interdependency y conceptconcept

Total costs are comprised of

variable costs plus fixed costs plus semi-variable variable costs plus fixed costs plus semi-variable costscosts variable costs plus fixed costs

variable costs plus fixed costs

variable costs plus semi-variable costs variable costs plus semi-variable costs fixed costs plus semi-variable costs fixed costs plus semi-variable costs

Prime costs are comprised of

direct labour costs

direct labour costs plus production overheadsplus production overheads materials costs plus direct labour costs

materials costs plus direct labour costs materials costs plus

materials costs plus production overheadsproduction overheads

production overheads plus materials costs plus direct labour costs production overheads plus materials costs plus direct labour costs

Cost allocation is the charging of a

cost centre with the direct labour and materials costs relating to the cost cost centre with the direct labour and materials costs relating to the cost centre

centre

cost centre with the overhead costs

cost centre with the overhead costs resulting solely from the existence ofresulting solely from the existence of the cost centre

the cost centre

product with the direct labour costs

product with the direct labour costs relating to the productrelating to the product product with the direct labour and materials

product with the direct labour and materials costs relating to the productcosts relating to the product

Which of the following examples of bases of cost

apportionment

may relate to rent, heating and lighting?

(17)

weight weight area area number of products number of products number of employees number of employees

Which costs are charged to a product using

the method of

absorption costing

production overheads plus direct labour costs production overheads plus direct labour costs total production costs

total production costs

materials costs plus direct labour costs materials costs plus direct labour costs direct labour costs

direct labour costs

Using the marginal costing method, contribution is equal to total

sales revenue less

fixed costs fixed costs variable costs variable costs total costs total costs

direct labour costs direct labour costs

Marginal costing may be preferred to absorption costing because it

ensures the recovery of total costs

ensures the recovery of total costs in sales pricingin sales pricing complies with the accruals or matching concept complies with the accruals or matching concept enables use of the opportunity cost approach enables use of the opportunity cost approach

complies with International Accounting Standard (IAS) 2 complies with International Accounting Standard (IAS) 2

(18)

1-Cost estimation include(s) the

following expenditure(s)

(A) pattern making

(B) tool making

(C) selling expenses

(D) all of the above

2-To calculate the probable cost of the product, knowledge of following factors i

nvolves

(A) Production time required

(B) Use of previous estimates of comparable parts

(C) Effect of change in facilities on

costing rates

(D) All of the above

3-Cost accounting is a specialized branch of accounting which deals with

(A) classification, recording, allocation and control of costs

(B) classification, processing, allocation and directing

(C) classification, recording, planning and control of costs

(D) classification, recording, allocation and directing

4-Expenditure incurred on material, labour, machinery, production and inspection are

summed up to find the

(A) Total cost of product

(B) Selling price of product

(C) Factory cost of product

(D) None of the above

5-Which of the following calculate the actual cost of

product

(A) Cost estimation

(B) Costing

(C) Both (A) and (B)

(D) None of the above

(19)

6-The cost data provide invaluable information for

taking the following managerial

decision(s)

(A) To make or buy

(B) To own or hire

fixed asset

(C) Determining the expansion or contraction policy

(D) All of the above

7-Match the following

Type of costing

Type of industry

a.

Job

costing

1.

1. Utility

Utility

services

b. Process costing

2. Automobile industry

c.

Departmental

costing

3.

3. ship

ship

building

d.

Operating

costing

4.

4. paper

paper

making

The correct answer is

(A). a-2, b-3, c-1, d-4

(B). a-3, b-4, c-2, d-1

(C). a-4, b-2, c-1, d-3

(D). a-3, b-2, c-1, d-4

8-The method of unit costing is adopted by

(A) Transport services

(B) Steel industry

(C) Mines

(D) Bicycle industry

9- ____ costing is a

type of job costing.

(A) Multiple

(B) Operating

(C) Unit

(D) Batch

10-The following is cost of

direct materials

(A) Freight charges

(20)

(B) grease

(C) coolant

(D) cotton waste

11-The following is cost of i

ndirect materials

(A) Lubricating oil

(B) Octroi

(C) Import duties

(D) Insurance

12-The payment made to the following is cost

of direct labour.

(A) Machinist

(B) Supervisor

(C) Inspector

(D) Sweeper

13-The payment made to the following is cost

of indirect labour.

(A) Time keeper

(B) Welder

(C) Moulder

(D) Turner

14-Cost of preparing drawings for the manufacture of a particular product is

(A) Cost of direct labour

(B) Cost of indirect labour

(C) Direct expenses

(D) Indirect expense

15-The following is also known as overhead costs or

on costs.

(A) Cost of direct labour

(B) Cost of indirect labour

(C) Direct expenses

(D) Indirect expenses

Answers:

1-(D), 2-(D), 3-(A), 4-(C), 5-(B), 6-(D),

7-(B), 8-(C), 9-(D), 10-(A), 11-(A), 12-(A), 13-(A), 14-

7-(B), 8-(C), 9-(D), 10-(A), 11-(A), 12-(A), 13-(A),

14-(C), 15-(D)

(21)

16-The following is(are) the overhead cost(s)

(A) Factory expenses

(B) Selling expenses

(C) Distribution expenses

(D) All of the above

17-All such expenses which are incurred for creating and enhancing the demands for the

products are

(A) Selling expenses

(B) Administrative expenses

(C) Distribution expenses

(D) All of the above

18-Prime cost=

(A) cost of direct

labour + cost of direct material +

direct expenses

(B) cost of indirect labour + cost

of indirect material + direct expenses

(C) cost of direct labour

+ cost of direct material +

indirect expenses

(D) cost of indirect la

bour + cost of direct material + i

ndirect expenses

19-Factory Cost =

(A) Prime cost + factory expenses

(B) Prime cost + administrative expenses

(C) Prime cost + selling

expenses

(D) Prime cost + distribution expenses

20-Manufacturing cost=

(A) Factory cost + selling cost

(22)

(B) Factory cost + distribution cost

(C) Factory cost + administrative expenses

(D) None of the above

21-The following is(are) the method(s) to increase profit

(A) Increase the sales price

(B) Increase the market

(C) Reduce total cost

(D) All of the above

22-Which of the following is variable cost?

(A) Salaries of higher officers

(B) Prime cost

(C) Insurance cost

(D) Repair cost

23-Which of the following is not

a method of calculating (allocating) overhead cost?

(A) Percentage on prime cost

(B) Percentage on direct labour cost

(C) Percentage on indirect labour cost

(D) Percentage on direct material cost

24-The following method is an improvement over the percentage on direct labour cost

method.

(A) Machine hour rate

(B) Percentage on prime cost

(C) Percentage on direct material cost

(D) Man hour rate

25-This method is useful

where the products are manufactured by

manual operations.

(A) Percentage on prime cost

(23)

(B) Percentage on direct material cost

(C) Percentage on direct labour cost

(D) Machine hour rate

26-The overhead cost for a particular job =

(A) man hour rate x

man hours spent on that job

(B) man hour rate /

man hours spent on that job

(C) man hour rate + man

hours spent on that job

(D) man hour rate

_–

man hours spent on that jab

27- Labour cost per product is Rs. 2/hr and ti

me taken by each product is 2 hr. The

factory

overhead is 20% of the labour costs. The f

actory cost for 100 products if material cost per

product is Rs. 3, is.

(A) Rs. 700

(B) Rs. 740

(C) Rs. 780

(D) Rs. 820

28-The following is (are) true for

variable costs

(A) Variable costs are the

functions of output

(B) Variable costs vary directly with the

quantity produced

(C) These become zero when the production is suspended

(D) All of the above

29-The following cost helps in taking

‘make

or

buy’

decision.

(A) Standard cost

(B) Marginal cost

(C) Differential cost

(D) Sunk cost

30-To control costs it is

essential to keep control on

(A) Prime cost

(B) Overheads

(C) Indirect materials and tools cost

(24)

(D) All of the above

Answers:

16-(D), 17-(A), 18-(A), 19-(A), 20-(C), 21-(D), 22-(B), 23-(C), 24-(D), 25-(C), 26-(A), 27-(C),

28-(D), 29-(C), 30-(D)

MCQs 1 To 10

1. A financial statement that summarizes company revenue and expenses is?

(a) Balance sheet

(b) Statement of owner equity

(c) Income statement

(d) Cash flow statement

2. Which one of

the following tangible fixe

d assets would not normally be depreciated?

(a) Buildings

(b) Machinery

(c) Land

(d) Equipment

3. Which financial statement presents a summary of the Assets, Liabilities, and Owners'

Equity of a firm?

(a) General ledger

(b) Work sheet

(c) Balance sheet

(d) Cash flow statement

4. Subtracting all expenses from revenues yields?

(a) Net profit/Loss

(b) Carrying value

(c) Long-term assets

(d) Net liabilities

5. A financial statement to show what a business owns and owes at a particular point in

time?

(a) A cash flow statement

(b) The bank statement for the business

(c) A balance sheet

(d) A statement of retained earnings

6. If the Gross profit is Rs. 5,000 and the net profit is 25% of the

Gross profit. The

expenses must be?

(a) Rs. 3,750

(b) Rs. 1,250

(c) Rs. 4,150

(d) Rs. 6,250

(25)

7. A financial document that indicates the success or failure of a business trading over

a period of time is called?

(a) A cash flow statement

(b) A retained earnings statement

(c) An income statement

(d) A bank statement

8. The report of company that shows overall profit on the sale of their goods or the

provision of their services?

(a) Trading and Profit & loss account

(b) Cash flow statement

(c) Income Statement

(d) Both a and c

9. A company has, by the end of its financial period, paid out more Tax than it

has to

pay. How would this be shown in the balance sheet?

(a) As an accrual Revenue

(b) As a Prepaid within current assets

(c) As a 'creditor due within one year'

(d) As a creditor due after more than one year'

Correct !

10. Which of the

following financia

l statements is also

known as financial condition?

(a) Balance Sheet

(b) Income Statement

(c) Statement of Cash flows

(d) Bank Statement

Wrong !

>> Read

>> Read Financial Statement

Financial Statement

..

MCQs 11 To 20

11. Prepaid interest given in the adjuste

d trial balance will be treated as a (an)?

(a) Asset

(b) Liability

(c) Revenue

(d) Deferred expense

12. Which of the

following is the largest single expense of most merchandising firms

?

(a) Cost of goods sold

(b) Rent Expense

(c) Amortization Expense

(d) Salaries Expense

13. The primary source of revenue for a

wholesale

r is?

(a) Investment income

(b) Service fees

(26)