Financial Accounting Assignment

1) Purchase of machinery against issue of shares will be shown in which part of the cash flow
statement.
o Operating Cash Flow
o Financing Cash Flow
o Inventing Cash Flow
o None of the above
2) Which of the following can be define as marginal cost.
o Cost of Producing one additional unit
o Fixed cost per unit
o Variable Cost Per Unit
o Total Cost Per unit
3) Cost which is affected by a particular decision being taken is known as _______?
o Sunk Cost
o Relevant Cost
o Opportunity Cost
o Period Cost
4) If a company sells its finished goods at Rs. 10 per unit and variable cost per unit is Rs. 7 calculate
the Break-Even point, if the total cost is Rs. 12000?
o 1200 Units
o 1714 units
o 706 units
o 4000 Units
5) Which of the following branch of accounting doesn’t gives the cost classification by product,
process etc.
o Financial Accounting
o Management Accounting
o Cost Accounting
o Marginal Costing
6) The Nature of wages paid to a labourer can be categorized as _________?
o Variable Cost
o Fixed cost
o Semi-Variable Cost
o Indirect Cost
7) Which of the following is a financing item?
o Interest paid
o Salary paid
o Dividend received
o Share capital issued
8) Set up cost for a production run is an example of _________?
o Unit level cost
o Batch level cost
o Product level cost
o Facility level Cost
9) What is Break Even point
o Point of Maximum Profit
o Point of minimum profit
o No Profit-No Loss
o Minimum Loss Point
10) A Ltd is appraising a project requiring initial investment of Rs. 500000, Project is expected to
returns Rs. 120000 in each of the next 5 years. Calculate the NPV of the project. PAVF at 10% for
5 years is 3.7908.
o 100000
o 454896
o 45104
o -45104
11) Which of the following is an example of business liability?
o Land
o Building
o Cash
o Creditors
12) Which of the following measure will be used for calculation of inventory turnover ratio?
o Net Sales
o Credit Sales
o Cost of Goods Sold
o Cost of Sales
13) When absorption costing and variable costing results in similar net income ?
o Production = Sales
o Production > Sales
o Production < Sales
o All of above
14) Big Ltd is planning to invest in a furniture showroom, a sum of Rs. 200000. In next 10 years it is
expected to receive the cash flow of Rs. 50000 annually, Calculate the payback period of
investment
o 10 Years
o 5 Years
o 4 Years
o 7 Years
15) A Business has paid the rent for the period Jan-Mar 2016 in June 2016, in which year financial
statements this rent expenses will be recorded?
o 2015
o 2016
o 2017
16) Which of the following is a measure of Risk?
o Average
o Arithmetic mean
o Standard deviation
o CAGR
17) In which of the following books, separate account is maintained for each item?
o Ledger
o Accounting equation
 o Trial Balance
o Journal

18) Proceeds on the sales of fixed assets will be shown in which part of the cash flow statement, if
indirect method is followed?
o Operation cash flow
o Financing cash flow
o Investing cash flow
o None of the above
19) In order to reflect the efficiency is debtor’s management, debtor turnover ratio should be_____?
o Increased
o Decreased
o Keep constant
o None of the above
20) Loss on the sales of fixed assets will be shown in which part of the cash flow statement, if direct
indirect method is followed?
o Operating cash flow
o Financing cash flow
o Investing cash flow
o None of the above
21) The balance of cash account indicates_________
o Net income for the period
o Net loss for the period
o Net cash on hand
o Net worth of the business
22) Rent paid is an example of______?
o Unite Level cost
o Batch level cost
o Product level cost
o Facility level cost
23) Higher debt-equity ratio indicates
o High operating risk
o low operating risk
o High Financial risk
o Low Financial Risk
24) Which of the following type of cost concept if pertaining to income measurement?
o Sunk Cost
o Controllable cost
o Direct material & labour cost
o Opportunity cost
25) Operating expenses of Moon Ltd are Rs. 18000, interest expenses Rs. 5000, tax paid rs. 4000. If
Sales is Rs. 35000 then calculate the Net Profit Margin?
o 0.2285
o 0.7714
o .051
o .0657
26) Which kind of data is used in management accounting
 o Past
o Present
o Future
o All of the above

27) Which of the following is an example of systematic risk?

o Scarcity of raw material
o Labour strike
o Increase in excise duty for LCD panels
o Subprime-crisis of 2008

28) Calculate the expected return for stock A based on the following information on probability (p)
of Returns ( r). P= .3, R=10%,P=.4 r=15%, p=.3 r=8%.
o 0.11
o 0.114
o 0.33
o 0.038

29) In the tradition costing system, overheads are allocated based on which of the following
parameters?
o Volume based parameters
o Cost drivers
o Both of the above
o None of the above

30) Alisha has invested a sum of money of Rs. 5 Lacs in a fixed deposit of 5 years with annual
compounding at a rate of 10%. If FV factor for 5 years at 10% is 1.6105, calculate the value of
investment after 5 years?
o Rs. 750000
o Rs. 310463
o Rs. 805250
o None of the above
31) Standard cost for material, labour, overheads is calculated at _______________level?
o Unit level
o Deptt. Level
o Product level
o Factory level
32) ABC Ltd. Procured 600 units of raw material at a price of Rs.5 per unit. The standards quantity
was supposed to be 650 units at a price of Rs. 4 per unit. Calculate material usage variance?
o Rs. 200 Favourable
o Rs. 200 Unfavourable
o Rs. 250 Favourable
o Rs. 250 Unfavourable
33) Every accounting transaction must at least affect __________accounts?
o One
o Two
 o Three
o Four
34) Which of the following is an example of direct material for a furniture manufacturing unit?
o Adhesives & tools
o Timber
o Packing material
o All of the above
35) When a liability is increased, it is recorded on the
o Credit side
o Debit side
o Left hand side
o Any of the above
36) Development of a model of a new product is a example of _________?
o Unit level cost
o Batch level cost
o Product level cost
o Facility level cost
37) Which of the following is liquidity ratio?
o Debt to equity ratio
o Return of investment
o Total asset turnover ratio
o Current ratio
38) If a company sells its finished goods at Rs. 12 per unit and variable cost per unit is Rs. 7. Calculate
the sales level for earning the desired profit of Rs. 3000, if the total fixed cost is Rs. 12000?
o 3000 Units
o 1000 Units
o 2143 Units
o 1250 Units
39) Both assets and owner’s equity would be increased by ___________
o Capital brought in
o Purchase of an asset on credit
o Payment of creditors
o Proprietors drawings
40) Equal stream of cash flows at regular interval starting at the end of the period is known as
o Annuity ending
o Annuity regular
o Annuity due
o Annuity cumulative
41) Give 3-3 example of fixed cost and variable cost?

Fixed costs do not vary directly with the level of output

Examples include 1) the rental costs of buildings;

2) the costs of leasing or purchasing capital equipment such as plant and machinery;
3) the costs of meeting interest payments on loans

Variable costs are costs that vary directly with output – when output is zero, variable costs will
be zero but as production increases, variable cost will rise.
Examples of variable costs
1) include the costs of raw materials and components,
2) the wages of part-time staff or employees paid by the hour,
3) the costs of electricity and gas