Accounts Assistant Finance Test | Online Quiz 50 MCQs

JKSSB Accounts Assistant (Finance) - Cost Accounting & Developments in Accounting Practice Test

JKSSB Accounts Assistant (Finance) - Cost Accounting & Developments in Accounting Practice Test

Targeted 50 MCQ Practice Module focusing on: Cost Accounting (Fundamentals, Methods, Material/Labour/Overheads) and Developments in Accounting (Modern Concepts, Standards & Digital Trends).

Select your answers and click Submit Assessment Answers at the bottom to calculate your total score and review explanations.

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SECTION I: Cost Accounting - Fundamentals [Questions 1 to 10]
1. Cost Accounting is primarily concerned with the:
Explanation: Cost Accounting is the process of ascertaining, recording, classifying, and controlling costs incurred in producing goods or rendering services.
2. The professional and statutory body that regulates the Cost and Management Accountancy profession in India is:
Explanation: The Institute of Cost Accountants of India (ICMAI), established under an Act of Parliament in 1959, regulates the CMA profession in India.
3. Unlike Financial Accounting, Cost Accounting deals with cost information that is:
Explanation: Cost Accounting records historical costs as well as predetermined/standard costs, making it useful for planning and control, unlike financial accounting which is largely historical.
4. The primary objective of Cost Accounting is:
Explanation: The main objectives of cost accounting are ascertainment of cost per unit, cost control, cost reduction, and providing information for managerial decision-making.
5. A location, person, or item of equipment for which cost is separately ascertained is termed a:
Explanation: A Cost Centre is a sub-unit of an organisation, such as a department, machine, or person, in relation to which costs are accumulated.
6. A unit of product, service, or time in relation to which costs may be ascertained or expressed (e.g., per tonne, per km) is called a:
Explanation: A Cost Unit is the quantitative unit of a product or service to which costs are related, e.g., per tonne of steel or per passenger-km in transport.
7. A responsibility centre whose manager is accountable for both costs incurred and revenue earned is called a:
Explanation: A Profit Centre is a segment of a business whose manager is responsible for both revenues generated and costs incurred, thereby for the resulting profit.
8. The three basic elements of cost are:
Explanation: Every cost is composed of three basic elements: Material, Labour, and Expenses, each of which is further split into Direct and Indirect components.
9. Cost that can be economically and conveniently traced directly to a specific cost unit is called:
Explanation: Direct Costs (direct material, direct labour, direct expenses) can be identified with and allocated directly to a specific product or job.
10. Costs that cannot be traced to a single cost unit and are common to several cost centres (e.g., factory rent, supervisor's salary) are known as:
Explanation: Indirect Costs, collectively called Overheads, cannot be conveniently identified with a particular cost unit and are apportioned across cost centres.
SECTION II: Cost Accounting - Classification & Methods [Questions 11 to 20]
11. A cost that remains constant in total regardless of the level of production/activity, within a relevant range, is called:
Explanation: Fixed Costs (e.g., rent, insurance) remain unchanged in total amount irrespective of changes in the volume of output, within a given period and capacity.
12. A cost that varies directly and proportionately with the level of output/activity is called:
Explanation: Variable Costs (e.g., direct material, direct labour) change in direct proportion to the volume of production, though per-unit cost remains constant.
13. An electricity bill that has a fixed minimum charge plus a variable charge based on units consumed is an example of:
Explanation: Semi-Variable Costs contain both a fixed element and a variable element, such as an electricity bill with a minimum charge plus a per-unit rate.
14. The costing technique in which only variable costs are charged to products/jobs and fixed costs are written off against contribution is called:
Explanation: Marginal Costing treats only variable costs as product costs; fixed costs are treated as period costs and charged fully against the contribution earned.
15. A technique that uses predetermined costs for each element (material, labour, overhead) and compares them with actual costs to compute variances is called:
Explanation: Standard Costing pre-determines standard costs and analyses variances between standard and actual costs to enable cost control.
16. The method of costing suitable for industries executing specific, distinct customer orders (e.g., printing press, furniture making) is:
Explanation: Job Costing ascertains cost separately for each distinct job or work order, suited to industries like printing, furniture, and repairs.
17. The method of costing used where a product passes through successive, continuous stages of production (e.g., chemicals, textiles, sugar) is:
Explanation: Process Costing accumulates costs by process/stage for industries producing homogeneous output continuously, like chemicals and textiles.
18. The costing method applicable to large-scale, long-duration projects like buildings, dams, and roads is called:
Explanation: Contract Costing, a variant of job costing, is used for big, long-term projects such as construction of buildings, roads, and dams.
19. The costing method used by service industries such as transport, hospitals, and hotels to ascertain cost per unit of service is:
Explanation: Operating/Service Costing is applied by organisations rendering services (transport, hospitals, hotels) to determine cost per unit of service such as per passenger-km or per bed-day.
20. The costing method where a group of identical, small items produced together is treated as one cost unit (e.g., pharmaceuticals, bakery products) is called:
Explanation: Batch Costing, an extension of job costing, treats a batch of identical units as one cost unit, common in pharmaceutical and bakery industries.
SECTION III: Cost Accounting - Material, Labour & Overheads [Questions 21 to 30]
21. Economic Order Quantity (EOQ) is the order size that:
Explanation: EOQ is the order quantity at which the sum of ordering costs and carrying (holding) costs of inventory is minimized.
22. Under the FIFO (First-In-First-Out) method of pricing material issues, the closing stock is valued at:
Explanation: Under FIFO, materials received first are issued first, so the remaining closing stock reflects the cost of the latest purchases.
23. Under the LIFO (Last-In-First-Out) method of pricing material issues, materials are issued at the price of:
Explanation: Under LIFO, the material received last is issued first, so issues are priced at the cost of the most recent purchase.
24. ABC Analysis, used for selective inventory control, classifies materials on the basis of:
Explanation: ABC Analysis categorizes inventory into 'A' (high value, low quantity), 'B' (moderate), and 'C' (low value, high quantity) items for selective control.
25. The rate of change in the composition of the labour force of an organisation during a specified period is called:
Explanation: Labour Turnover measures the rate at which employees leave and are replaced in an organisation, usually expressed as a percentage.
26. Idle time arising due to normal causes such as tea breaks, machine setup, and movement of workers between jobs is called:
Explanation: Normal Idle Time is unavoidable and inherent to work conditions (rest pauses, setup time) and is treated as a part of the cost of production.
27. The rate used to charge/absorb factory overheads to individual cost units or jobs is known as:
Explanation: The Overhead Absorption Rate is a predetermined rate used to charge overhead costs to cost units, e.g., based on direct labour hours or machine hours.
28. The process of charging a cost item, which relates to a single cost centre entirely, is called Allocation, whereas distributing a common cost item over several cost centres on an equitable basis is called:
Explanation: Apportionment is the distribution of a joint/common overhead expense across multiple cost centres in proportion to the benefit received by each.
29. Machine Hour Rate is computed by dividing the total factory overheads of a machine by its:
Explanation: Machine Hour Rate = Total overheads attributable to a machine ÷ Total effective (running) machine hours, used to absorb overheads in machine-intensive operations.
30. A statement showing the various components of total cost (Prime Cost, Works Cost, Cost of Production, Total Cost) for a given period is called a:
Explanation: A Cost Sheet is a periodical statement that presents cost data in a systematic manner, showing Prime Cost, Works/Factory Cost, Cost of Production, and Total Cost/Cost of Sales.
SECTION IV: Developments in Accounting - Modern Concepts [Questions 31 to 40]
31. The branch of accounting concerned with identifying, measuring, and reporting the value of an organisation's employees as an asset is called:
Explanation: Human Resource Accounting attempts to measure and report the cost and value of human resources as an intangible asset of the organisation.
32. The branch of accounting that measures and discloses the social costs and social benefits of a business's activities on society (e.g., pollution, employment generation) is called:
Explanation: Social Accounting reports on the impact of an entity's activities on society and the environment, going beyond purely financial performance.
33. The technique that adjusts financial statements to reflect changes in the general price level (rising prices) so that reported profits are not overstated is called:
Explanation: Inflation Accounting (Price Level Accounting) restates historical financial statements to account for the effects of changing price levels, giving a more realistic view of profit and capital.
34. The system of accounting under which performance of managers of various responsibility centres is evaluated based on controllable costs/revenues assigned to them is called:
Explanation: Responsibility Accounting divides an organisation into responsibility centres (cost, profit, investment centres) and evaluates managers only on factors within their control.
35. The system of accounting that identifies, records, and discloses the environmental costs incurred and environmental impact caused by an organisation is called:
Explanation: Environmental/Green Accounting incorporates the cost of environmental degradation and resource depletion into the financial reporting of an entity.
36. A statement that shows how the wealth generated by an enterprise has been distributed among various stakeholders (employees, government, shareholders, and business itself) is called:
Explanation: A Value Added Statement discloses the wealth (value added) created by the enterprise and its subsequent distribution among employees, government, lenders, shareholders, and retention.
37. The branch of accounting that applies accounting, auditing, and investigative skills to detect financial fraud and is often used in legal proceedings is called:
Explanation: Forensic Accounting combines accounting, auditing, and investigative techniques to examine financial records for evidence of fraud, embezzlement, or financial crime, often for use in litigation.
38. Which of the following best distinguishes Management Accounting from Financial Accounting?
Explanation: Management Accounting provides information primarily for internal managerial planning, control, and decision-making, while Financial Accounting is oriented towards external stakeholders and statutory compliance.
39. A modern costing technique that assigns overhead costs to products based on the specific activities that drive those costs (cost drivers) rather than a single blanket rate is called:
Explanation: Activity Based Costing (ABC) is a modern costing technique that identifies activities as cost drivers and allocates overheads more accurately based on actual resource consumption by each product.
40. The accounting approach that measures periodic income and financial position based on current/replacement values rather than historical cost is called:
Explanation: Current Value/Replacement Cost Accounting is a development addressing the limitations of historical cost accounting under changing price levels, valuing assets and income at current replacement values.
SECTION V: Developments in Accounting - Standards & Digital Trends [Questions 41 to 50]
41. Indian Accounting Standards (Ind AS), notified by the Ministry of Corporate Affairs, are converged with which set of global standards?
Explanation: Ind AS are the Indian accounting standards converged with IFRS, issued by the International Accounting Standards Board (IASB), to bring global comparability to Indian financial statements.
42. IFRS (International Financial Reporting Standards) are issued by which body?
Explanation: IFRS are a set of global accounting standards issued by the International Accounting Standards Board (IASB) to bring uniformity to financial reporting across countries.
43. The introduction of GST (Goods and Services Tax) in India primarily impacted accounting by requiring businesses to maintain:
Explanation: GST required businesses to maintain detailed records of Input Tax Credit, output tax liability, and GST-compliant invoices, significantly changing day-to-day bookkeeping practices.
44. A widely used Computerized Accounting Software in India for maintaining books of accounts, GST filing, and inventory is:
Explanation: Tally is one of the most widely used computerized accounting software packages in India for bookkeeping, inventory management, and statutory compliance including GST.
45. Accounting software hosted on remote servers and accessed via the internet, allowing real-time, location-independent access to books of accounts, is known as:
Explanation: Cloud Accounting refers to accounting systems hosted on remote servers, enabling real-time access to financial data from any location via the internet.
46. XBRL, a standardized digital language increasingly used for filing financial statements with regulators like MCA/SEBI, stands for:
Explanation: XBRL (eXtensible Business Reporting Language) is a standardized, machine-readable digital format for electronic communication and filing of financial and business data with regulators.
47. The document generated for movement of goods worth more than the prescribed threshold under GST, tracked through an online digital compliance system, is called:
Explanation: The E-way Bill is an electronic document generated on the GST portal for tracking movement of goods above a specified value, reflecting digitalization of tax compliance.
48. The reporting concept that requires an organisation to measure and disclose its performance across three dimensions — Economic (Profit), Social (People), and Environmental (Planet) — is called:
Explanation: Triple Bottom Line reporting evaluates an organisation's performance on three "P"s — Profit, People, and Planet — extending accounting beyond pure financial results.
49. The reporting framework that combines financial and non-financial information (including governance, social, and environmental capital) into a single, concise report is called:
Explanation: Integrated Reporting (<IR>), promoted by the International Integrated Reporting Council (IIRC), combines financial and non-financial capitals into a single holistic report on value creation.
50. An emerging technology being explored in accounting for creating tamper-proof, distributed, and transparent transaction ledgers is:
Explanation: Blockchain technology creates a decentralized, tamper-resistant distributed ledger, offering potential for real-time, verifiable, and fraud-resistant transaction recording in accounting.

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