Top 150+ Solved Cost and Works Accounting 2 MCQ Questions Answer
Q. The cost of units of abnormal loss is treated as an _________ for the period, and charged as an ___________for the period
a. Product cost, inventory cost
b. Expense, expense in the income statement
c. Extra cost, suspense cost
d. None
Q. Abnormal loss comes with:
a. No recovery/scrape value
b. Recovery/scrape value
c. Either A or B
d. None
Q. When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none
Q. When actual loss is less than the expected (normal) loss there is:
a. Extra ordinary loss
b. Abnormal loss
c. Abnormal gain
d. None
Q. Identify which of the following statement is correct.
a. Abnormal gain is a benefit rather than a cost. Whereas abnormal loss is written off as a cost at the end of the financial period.
b. Abnormal gain is an adjustment that increases the profit for the period.
c. Abnormal gain is recorded as a debit entry in the process account, because it is a benefit.
d. All of the above are correct
Q. When there is closing work in progress (WIP) the concept of _________ is used.
a. Equivalent units
b. Expected units
c. Fair allocated units
d. None
Q. An equivalent unit means ‘equal to one finished unit of output’.
a. False
b. True
c. none
d. none
Q. When there is opening work in progress there are two types of cost on the debit side of the account. These are the costs that were incurred last period and brought forward as work in progress and the costs that were incurred in the current period.
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none
Q. Are the costs of opening WIP, incurred in last period and brought forward as work in progress and the costs that were incurred in the current period, treated the same way?
a. Yes, treated together
b. Treated Separately
c. This question is addressed in the accounting policy adopted for opening work in progress.
d. None
Q. Joint products are two or more products generated simultaneously, by a singlemanufacturing process using common input, and being substantially equal in value.
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none
Q. In order to calculate a cost for each joint product, the common costs must be________ between the joint products.
a. Identified
b. Allocated
c. Apportioned
d. None
Q. Which of the methods of apportionment is normally used for apportioning commoncosts between joint products?
a. Units basis
b. Sales value at the split-off point basis
c. Net realizable value
d. Either of the above
Q. The units basis has the following limitations.
a. Where the products separate during the processes into different states, for example where one product is a gas and another is a liquid, this method is unsuitable.
b. This method does not take into account the relative income-earning potentials of the individual products, with the result that one product might appear very profitable and another appears to be incurring losses.
c. Both A&B
d. None