Costing mcqs

✅ The correct answer is A.
Cash sales, accounts receivables and rental receipts all are known as cash receipts. A cash receipt is a printed statement of the amount of cash received in a cash sale transaction.

✅ The correct answer is B.
Bin card is maintained by stores department. Store ledger is prepared by cost accounting department. Bin card is a record of quantity only. Store ledger is a record of quantities and values.

✅ The correct answer is A.
A profit centre is a centre where the manager has the responsibility of generating and maximising profits. In a profit centre, the manager has the responsibility and the authority to make decisions that affect both costs and revenues (and thus profits) for the department or division. The main purpose of a profit centre is to earn profit. Profit centre managers aim at both the production and marketing of a product.

✅ The correct answer is C.
An additional cost, incurred for some specific activity to bring processed product on to next production stage is incremental cost. Incremental cost also referred to as marginal cost, is the total change a company experiences within its balance sheet or income statement due to the production and sale of an additional unit of product.

✅ The correct answer is B.
An assumption, which states that there must be linear relationship between independent variable and dependent variable is relevant range of linearity.

✅ The correct answer is D.
Cause and effect relationship between activity and costs is result of contractual agreement, knowledge of operations and measureable unit relationship.

✅ The correct answer is B.
Method which divides support department cost into two dimensions such as fixed and variable cost pool is classified as dual-rate cost-allocation method. Allocations are performed in order to create financial statements that are in compliance with the applicable accounting framework.

✅ The correct answer is C.
Balance sheet, in which all costs of product that must be considered as its assets, is said to be Inventoriable costs. Inventoriable costs, also known as product costs, refer to the direct costs associated with the manufacturing of products for revenue generation.

✅ The correct answer is C.
In costing of project, wages paid to workers for unproductive work at time of material shortage is termed as idle time wages. The labour cost of normal idle time may be treated as an item of factory expenses and recovered as an indirect charge in case of indirect workers.

✅ The correct answer is B.
An ability of an accounting system, to point out use of resources in every step of production process is called audit trails. An audit trail is a step-by-step record by which accounting or trade data can be traced to its source.