Deck 4: Costing and Cash Flow Analysis

Question 1

Cash flow statement is a statement which describes inflows and outflows of……

A)cash
B)cash and cash equivalents
C)working capital
D)all of these

Answer 1

cash and cash equivalents

Question 2

Cash, according to cash flow statement comprises of ……………

A)liquid cash only
B)cash in hand
C)cash in hand and demand deposits with banks
D)none of these

Answer 2

cash in hand and demand deposits with banks

Question 3

………are short term , highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

A)cash equivalents
B)short term investments
C)marketable securities
D)all of these

Answer 3

cash equivalents

Question 4

Flow of cash is said to have taken place when any transactions makes changes in the amount of ………….before happening of the transactions.

A)cash
B)cash equivalents
C)both of these
D)none of these

Question 5

Which among the following are examples of cash flow from operating activities ?

A)cash receipts from sale of goods
B)cash receipts from royalties
C)cash payments to suppliers
D)all of these

Question 6

Which among the following is not an example of cash flow from operating activities ?

A)cash payments of insurance premiums
B)cash payments of income taxes
C)cash payments to employees
D)cash receipts from disposal of fixed assets

Question 7

The essence of marginal costing is that ……………… cost is considered on the whole as separate.

A)fixed
B)variable
C)both of these
D)none of these

Question 8

………….cost represents the amount of any given volume of output by which aggregate costs are changed if the volume of output is increased by one unit.

A)variable cost
B)marginal cost
C)fixed cost
D)none of these

Question 9

………. Is the increase or decrease in total cost which results from producing or selling additional or fewer units of a product or from a change in the method of production or distribution such as the use of improved machinery, addition or exclusion of a product or territory or selection of an additional sales channel.

A)variable cost
B)marginal cost
C)fixed cost
D)none of these

Question 10

…………cost is defined as the aggregate of variable costs or prime costs plus variable overheads.

A)variable cost
B)marginal cost
C)fixed cost
D)none of these

Question 11

Marginal costing is a …………… of costing

A)system
B)method
C)technique
D)all of these

Question 12

Under marginal costing, ……… Costs are regarded as costs of the products.

A)variable costs
B)fixed costs
C)both of these
D)none of these

Question 13

Under marginal costing, …………… costs are treated as period costs and charged to profit and loss account for the period for which they are incurred

A)variable costs
B)fixed costs
C)both of these
D)none of these

Question 14

Under marginal costing, stocks of finished goods and work-in-process are valued at …………….. costs only

A)variable costs
B)fixed costs
C)marginal cost
D)none of these

Question 15

………………..is the excess of sales over marginal cost of sales

A)profit
B)margin
C)loss
D)contribution

Question 16

………………..cost remains constant per unit of output irrespective of the level of output and thus fluctuates directly in proportion to changes in the volume of output

A)variable costs
B)fixed costs
C)marginal cost
D)none of these

Question 17

…………..costs are the increase or decrease in total cost that result from producing additional or fewer units or from the adoption of an alternative course of action.

A)variable costs
B)fixed costs
C)marginal cost
D)differential cost

Question 18

Marginal cost and differential cost are the same when ……..costs do not change with change in output

A)variable costs
B)fixed costs
C)semi variable cost
D)none of these

Question 19

………………is the practice of charging all costs, both variable and fixed, to operations, processes, or products

A)marginal costing
B)absorption costing
C)differential costing
D)none of these

Question 20

In absorption costing, managerial decision making is based upon …………..

A)profit
B)contribution
C)costs
D)none of these

Question 21

Given sales = 150000, Fixed costs = 30000, Profit = 40000.The variable cost is………….

A)110000
B)80000
C)120000
D)10000

Question 22

The Profit/Volume ratio or marginal ratio expresses the relation of ………… to sales.

A)profit
B)marginal cost
C)contribution
D)none of these

Question 23

Which of the following measures helps to increase the P/V Ratio ?

A)increasing the selling price per unit
B)reducing the variable or marginal cost
C)changing the sales mixture
D)all of these

Question 24

Given sales = 100000, Profit = 10000 , variable cost = 70%.The sales required to earn a profit of Rs.40000 is ………………………

A)1500000
B)100000
C)200000
D)none of these

Question 25

Marginal cost is the ……….cost of producing an additional unit of output

A)variable
B)fixed
C)semi variable
D)none of these