Accounting for Managers Questions and Answers Part-9

1. The practice of appending notes regarding contingent liabilities in accounting statements is in pursuance to:
a) Convention of consistency
b) Money measurement concept
c) Convention of conservatism
d) Convention of disclosure

Answer: d

2. Sales are equal to:
a) Cost of goods sold + gross profit
b) Cost of goods sold - gross profit
c) Gross profit- Cost of goods sold
d) None of the above

Answer: b

3. Identify which is wrong rule
a) Nominal account- debit all expenses & losses
b) Real account- credit what comes in
c) Nominal account- credit all incomes & gains
d) Personal account- debit the receiver

Answer: b

4. The work of factory employees that can be physically associated with converting raw material into finished goods is classified as
a) Manufacturing overhead
b) Indirect materials
c) Indirect labour
d) Direct labour

Answer: d

5. ______________ cost will still be incurred although a plant is shut down temporarily.
a) Cost of raw material
b) Advertising
c) Depreciation
d) Carriage

Answer: d

6. According to which concept business is treated as a unit apart from owner
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept

Answer: c

7. Variable cost per unit
a) Remains fixed
b) Fluctuates with volume of production
c) Varies in consideration with the volume of sales
d) None of the above

Answer: b

8. Making the provision for doubtful debts and discount on debtors in anticipation of actual bad debts and discount is an example for which concept
a) Conservatism concept
b) Continuity concept
c) Realization concept
d) All of these

Answer: a

9. liabilities in balance sheet include the following items
a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these

Answer: d

10. Net profit is calculated in
a) Trading a/c
b) Balancesheet
c) Profit & loss a/c
d) Trial balance.

Answer: c