MGT101 Quiz No.2 Shared by Sania, Spring 2014

1. The total of all costs incurred to convert raw material into finished goods is known as:

Prime cost
Conversion cost
Sunk cost
Opportunity cost

2. Which of the following account balance is shown on credit side of Trial Balance? (It is assumed that all account balances are shown on normal balance)

Cash account
Furniture account
Vehicle account
Capital account

3. Which one of the following cannot be classified as Revenue Income?

Goods sold for cash
Goods sold on credit
Income from the sale of services
Income from the sale of fixed assets

4. From the given particulars, calculate the rate of depreciation under the diminishing balance method of depreciation: Cost of Asset = Rs. 2,000 Residual Value = Rs. 400 Useful Life = 4 years

42 %
30 %
27 %
33 %

5. Which of the following is the main objective of charging depreciation?

To show the true financial position in the balance sheet
To provide funds for replacement of fixed assets
To allocate true profit
To reduce tax burden

6. A manufacturing concern has Raw material of worth Rs. 100,000, Direct Labor Rs. 75,000 and Factory Overhead Rs. 50,000. The amount of Conversion cost will be:

Rs. 150,000
Rs. 175,000
Rs. 125,000
Rs. 225,000

7. Which of the following particular is NOT included in journal voucher?

Name of organization
Bank receipt number
Debit amount
Credit amount

8. Which of the following is a FIRST product of accounting cycle?

Voucher
General Journal
Financial Statements

9. What is the next step to Journalizing in Accounting cycle?

Recording
Posting
Balancing
Analyzing

10. The entry of raw material issued to production units is:

Debit: Raw material A/c Credit: Work in process A/c
Debit: Work in process A/c Credit: Finished goods A/c
Debit: Work in process A/c Credit: Factory overhead A/c
Debit: Work in process A/c Credit: Material Stock A/c

11. Which one of the following is INCORRECT about closing Stock?

It is added into current assets
It is deducted from Material available for use
It becomes opening stock of next year
It reduces the resources of business

12. In the cost of goods sold statement, the sum of labor cost and the factory over head is known as:

Conversion cost
Prime cost
Total factory cost
Cost of goods manufactured

13. Which of the following assets are shown at written down value in balance sheet?

Current assets
Liquid assets
Floating assets
Fixed assets

14. Which of the following is the example of Current Assert?

Land
building
stock
Capital

15. After the expiry of useful life of fixed asset the process of selling that asset is called as ____________

Salvage Value of Fixed Asset
Disposal of Fixed Asset
Useful life of Fixed Asset
Accumulated Depreciation of Fixed Asset

16. Commercial Accounting is done through a system that is known as: Select correct option:

Single entry system of Accounting
Accrual system of Accounting
Double Entry system of Accounting
Cash system of Accounting

17. An accounting system in which risk of fraud or its non discovery is less is known as: Select correct option:

Double Entry Accounting system
Single Entry Accounting system
cash System of Accounting
Accrual Accounting system

18. A business event which can be measured in terms of money and must be recorded in books of accounts is called: Select correct option:

Condition
Transaction
Record