Quiz: Accounting Principle Trivia Questions

20 Questions

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Quiz: Accounting Principle Trivia Questions

Welcome to the Accounting principle trivia questions. Every person who is studying and want to become a practicing accountant. Then it is expected to know the basic accounting principles by heart as they serve as a guideline on how they should perform their job. Do give it a try and see just how well you understand them in practice. All the best!   ; &nbs p; &nb sp; &n bsp;


Questions and Answers
  • 1. 
    The main purpose of cost accounting is to
    • A. 

      A. maximise profits

    • B. 

      B. help in inventory valuation

    • C. 

      C. provide information to management for decision-making

    • D. 

      D. aid in the fixation of selling prices.

  • 2. 
    One of the most important tools in cost planning is
    • A. 

      A. direct cost

    • B. 

      B. budget

    • C. 

      C. cost sheet

    • D. 

      D. marginal costing.

  • 3. 
    The purpose of financial accounting is to provide information for —
    • A. 

      A. fixing prices

    • B. 

      B. cost control

    • C. 

      C. locating factory leading to wastages and losses

    • D. 

      D. assessing the profitability and financial position of the firm.

  • 4. 
    Fixed cost per unit increases when —
    • A. 

      A. variable cost per unit increases

    • B. 

      B. variable cost per unit decreases

    • C. 

      C. production volume increases

    • D. 

      D. production volume decreases.

  • 5. 
    Variable cost per unit
    • A. 

      A. varies when output varies

    • B. 

      B. remains constant

    • C. 

      C. increases when output increases

    • D. 

      D. decreases when output decreases.

  • 6. 
    Increase in total variable cost is due to
    • A. 

      A. increase in fixed cost

    • B. 

      B. increase in sales

    • C. 

      C. increase in production.

  • 7. 
    An example of variable cost is
    • A. 

      A. property taxes

    • B. 

      B. interest on capital

    • C. 

      C. direct material cost

    • D. 

      D. depreciation of machinery.

  • 8. 
    An example of fixed cost is
    • A. 

      A. direct material cost

    • B. 

      B. works manager’s salary

    • C. 

      C. depreciation of machinery

    • D. 

      D. chargeable expenses.

  • 9. 
    Cost accounting concepts include all of the following except.
    • A. 

      A. planning

    • B. 

      B. controlling

    • C. 

      C. profit sharing

    • D. 

      D. product costing.

  • 10. 
    The three major elements of product costs are all but
    • A. 

      A. direct materials

    • B. 

      B. factory overhead

    • C. 

      C. direct labour

    • D. 

      D. indirect labour.

  • 11. 
    Cost of goods produced includes
    • A. 

      A. production cost and finished goods inventory

    • B. 

      B. production cost and work-in-progress

    • C. 

      C. production cost, work-in-progress and finished goods inventory.

  • 12. 
    Cost of goods sold includes
    • A. 

      A. cost of production and work-in-progress

    • B. 

      B. cost of production and finished goods inventory

    • C. 

      C. cost of production, work-in-progress and finished goods inventory.

  • 13. 
    An overstatement of work-in-progress at the end of a period will
    • A. 

      A. overstate cost of goods produced

    • B. 

      B. understate current assets

    • C. 

      C. understate gross profit

    • D. 

      D. overstate net profit

  • 14. 
    Conversion cost is equal to the total of
    • A. 

      A. material cost and direct wages

    • B. 

      B. material cost and indirect wagesc.

    • C. 

      C. direct wages and factory overhead

    • D. 

      D. material cost and factory overhead

  • 15. 
    Multiple costing method is used in
    • A. 

      A. oil refinery

    • B. 

      B. car manufacturing company

    • C. 

      C. sugar mill

    • D. 

      D. multi-product company.

  • 16. 
    Toy manufacturing company should use
    • A. 

      A. unit costing

    • B. 

      B. job costing

    • C. 

      C. batch costing

    • D. 

      D. multiple costing

  • 17. 
    Electricity generating company should employ
    • A. 

      A. unit costing

    • B. 

      B. process costing

    • C. 

      C. operation costing

    • D. 

      D. operating costing.

  • 18. 
    Job costing is used in
    • A. 

      A. paper mills

    • B. 

      B. chemical worksc.

    • C. 

      C. printing press

    • D. 

      D. textile mill.

  • 19. 
    Output costing is employed in
    • A. 

      A. mining quarries

    • B. 

      B. steel production

    • C. 

      C. brick kilns

    • D. 

      D. all of these

  • 20. 
    Contract costing is used in
    • A. 

      A. ship-building

    • B. 

      B. aeroplane industries

    • C. 

      C. automobile industries.

    • D. 

      D. None of these.