Top 80+ Solved Strategic Cost Accounting MCQ Questions Answer
Q. The inventories are recorded at the latest price but the production cost is changedold cost price?
a. FIFO
b. Average
c. Both A & B
d. None
Q. Which one of the following methods for inventory valuation may be misleading when the units are identical?
a. FIFO Method
b. LIFO Method
c. Specific Identification Method
d. None
Q. During September, Khan had sales of 148,000, which made a gross profit of 40,000. Purchases amounted to 100,000 and opening inventory was 34,000. The value of closing inventory was?
a. Rs. 24,000
b. Rs. 26,000
c. Rs. 42,000
d. Rs. 54,000
Q. Which type of inventory system requires updating the inventory balance at the endof the accounting period?
a. Periodic inventory system
b. LIFO
c. Perpetual inventory system
d. FIFO
Q. In LIFO method of inventory valuation?
a. Issue of stocks to production is at latest price
b. Closing stock is at latest price
c. Both (a) & (b)
d. Neither (a) nor (b)
Q. The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be?
a. FIFO
b. LIFO
c. Weighted average
d. None of these
Q. Inventory does not include?
a. Materials used in the production of goods to be sold
b. Assets intended to be sold in the normal course of business
c. Equipment used in the manufacturing are sold
d. Assets currently in production for normal sales
Q. Net Purchases equal the invoice amount and?
a. Plus freight-in, plus discounts
b. Less purchase returns, plus purchase allowances
c. Plus freight-in, less purchase discounts
d. Plus discounts, less purchase returns
Q. In FIFO method of inventory valuation?
a. Closing stock is at latest price
b. Issue of stocks to production is at earliest price
c. Both (a) & (b)
d. Neither (a) nor (b)
Q. The average inventory costing method which results in a changed unit inventorycost after each successive purchase?
a. Weighted average
b. Moving average
c. Specific cost
d. Simple average
Q. The specific cost identification inventory cost flow method has all of the following characteristics except?
a. It identifies the cost of each physical item available for sale with either the ending inventory or cost of goods sold
b. It relates cost flow to the specific flow of physical goods
c. It is especially applicable when small and inexpensive items are handled in large quantities
d. It requires individual identification of items some device like tags or serial numbers
Q. Sales revenues are usually considered earned when?
a. Cash is received from credit sales
b. An order is received
c. Goods have been transferred from the seller to the buyer
d. Adjusting entries are made
Q. A retail firm would normally use an inventory account titled?
a. Finished Goods Inventory
b. Merchandise Inventory
c. Goods in Process Inventory
d. Raw Materials Inventory
Q. Which one of the following does not describe a type of transfer pricing?
a. Target based
b. Cost based
c. Negotiated
d. Administered
Q. Systematic evaluation of the trade-offs between product functionality and product cost whilestill satisfying customer needs is the definition of
a. Activity based management
b. Theory of constraints
c. Total quality management
d. Value engineering