art mcqs

Costing system, in which individual activities are identified as cost object is considered as

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manufactured costing
activity based costing
allocation costing
base costing
✅ The correct answer is B.
Costing system, in which individual activities are identified as cost object is considered as activity based costing. The ABC system of cost accounting is based on activities, which is any event, unit of work, or task with a specific goal, such as setting up machines for production, designing products, distributing finished goods, or operating machines.

A stock which is issued to meet specific needs of company is considered as

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classified stock
specific stock
needed stock
meeting stock
✅ The correct answer is A.
A stock which is issued to meet specific needs of company is considered as classified stock. Classified stock is a type of common stock that has special privileges, such as enhanced voting rights or dividend rights.

Capital budgeting decisions are analyzed with help of weighted average and for this purpose

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component cost is used
common stock value is used
cost of capital is used
asset valuation is used
✅ The correct answer is C.
Capital budgeting decisions are analyzed with help of weighted average and for this purpose cost of capital is used. Capital budgeting is a company’s formal process used for evaluating potential expenditures or investments that are significant in amount.

Second step for estimation of cost function by using quantitative analysis is to

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choose independent variable
choose cost estimation method
choose price estimation method
choose dependent variable
✅ The correct answer is A.
Second step for estimation of cost function by using quantitative analysis is to choose independent variable. An independent variable is the variable that is changed or controlled in a scientific experiment to test the effects on the dependent variable.

Under risk classification, _________ consist of those whose anticipated mortality corresponds to the standard lives represented by the mortality table.

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Standard lives
Preferred risks
Sub-standard lives
Declined lives
✅ The correct answer is A.
Under risk classification, Standard lives consist of those whose anticipated mortality corresponds to the standard lives represented by the mortality table. Mortality tables are the most important basis for charging the premium.

A policy can be surrendered only if it has acquired

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Legal value
Money value
Policy value
Paid-up value
✅ The correct answer is D.
A policy can be surrendered only if it has acquired paid-up value. In case of life insurance, if you surrender a policy before the completion of its full term, you could get back a portion of the money you paid as premium, after deducting charges. This money is surrender value.