Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Fundamentals of Financial and Cost AccountingTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. Which of the following is an example of a liability? Accounts Payable Prepaid Rent Inventory Building None 2. Which accounting concept assumes that a business will continue to operate indefinitely? Business Entity Concept Going Concern Concept Cost Concept Dual Aspect Concept None 3. Revenue is recognized when it is earned, regardless of when cash is received. This principle is called: Matching Principle Realization Principle Consistency Principle Full Disclosure Principle None 4. The fundamental accounting equation is: Assets = Liabilities + Capital Revenue = Expenses + Profit Assets = Liabilities - Capital Capital = Assets - Liabilities None 5. Which principle requires the use of the same accounting methods over time? Consistency Principle Conservatism Principle Matching Principle Cost Principle None 6. Which of the following accounts appears in the Profit and Loss Account? Cash Rent Paid Machinery Capital None 7. Prepaid expenses are shown in the Balance Sheet as: Current Asset Current Liability Non-Current Asset Non-Current Liability None 8. Outstanding expenses are classified as: Current Asset Current Liability Fixed Asset Reserve None 9. Net profit is transferred to: Trading Account Profit and Loss Account Balance Sheet Capital Account None 10. Depreciation appears on the: Credit side of the Profit and Loss Account Debit side of the Profit and Loss Account Credit side of the Trading Account Debit side of the Balance Sheet None 11. Which of the following is a compensating error? Overstatement of one account and understatement of another Reversal of entries Double entry of a transaction Omission of an entry None 12. Errors that affect the trial balance are called: Two-sided Errors One-sided Errors Compensating Errors Principal Errors None 13. Which type of error occurs when a transaction is not recorded at all? Error of Commission Error of Omission Error of Principle Clerical Error None 14. An error in the valuation of closing stock affects: Trading Account only Profit and Loss Account only Both Trading and Profit and Loss Accounts Balance Sheet only None 15. A suspense account is created to: Rectify all types of errors Temporarily balance the trial balance Record omitted transactions Adjust opening stock None 16. The main objective of cost accounting is to: Maximize profit Minimize costs Provide information for decision-making Record financial transactions None 17. Which of the following is a direct expense? Rent of factory Wages of factory workers Office salaries Depreciation on office furniture None 18. Which of the following is a fixed cost? Direct Material Cost Factory Rent Direct Labour Cost Electricity Charges None 19. Prime cost is the sum of Direct materials and indirect expenses Direct materials and direct labour Direct materials, direct labour, and direct expenses All production costs None 20. Which costing method is used in industries like oil refining and chemical production? Batch Costing Process Costing Job Costing Contract Costing None 21. Job costing is suitable for: Continuous production Customized production Standardized production Mass production None 22. Standard costing is primarily used for: Recording actual costs Budget preparation Performance evaluation Cash management None 23. In process costing, the cost of abnormal loss is treated as: Transfer to the next process Charged to the Profit and Loss Account Carried forward to the next period Added to finished goods None 24. Batch costing is generally used in: Textile industries Sugar industries Automobile industries Shipbuilding industries None 25. Uniform costing refers to: Using the same costing system across different firms Uniform distribution of costs Standardizing wages Costing for similar departments only None 26. Material price variance is calculated as: (Standard Price - Actual Price) × Actual Quantity (Actual Price - Standard Price) × Standard Quantity (Standard Price × Actual Quantity) (Actual Quantity × Actual Price) None 27. Labour rate variance is caused by differences in: Actual and budgeted labour hours Standard and actual wages paid Quantity of material used Standard and actual overheads None 28. Overhead variance is the difference between: Budgeted and actual overheads Budgeted and actual sales Standard and actual costs Fixed and variable costs None 29. A favorable variance indicates: Costs are higher than budgeted Costs are lower than budgeted Costs are equal to budgeted No significant difference in costs None 30. Which variance is not related to material cost? Material Price Variance Material Usage Variance Material Yield Variance Labour Efficiency Variance None 31. A flexible budget adjusts for: Inflation Changes in production levels Fixed costs Variable costs only None 32. Which budget is the starting point of the budgeting process? Production Budget Sales Budget Cash Budget Master Budget None 33. Which budget combines all functional budgets? Operating Budget Master Budget Financial Budget Production Budget None 34. A budget variance is the difference between: Budgeted and actual costs Standard and actual costs Fixed and variable costs None of the above None 35. Which budget focuses on short-term financial planning? Cash Budget Capital Budget Production Budget Operating Budget None 36. Which of the following budgets is most likely to be prepared first? Sales Budget Cash Budget Overhead Budget Master Budget None 37. In a decision-making scenario, sunk costs are: Relevant Irrelevant Included in future projections Used to calculate variable costs None 38. Which type of cost remains constant per unit but varies in total with the level of activity? Fixed Cost Variable Cost Semi-Variable Cost Opportunity Cost None 39. The main purpose of a cash budget is to: Forecast profits Plan for capital expenditure Ensure liquidity and manage cash flows Control overheads None 40. Break-even analysis is based on the assumption that: Fixed costs vary with the level of production Variable costs are constant per unit Selling price changes with production levels Costs are unaffected by changes in sales volume None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test.Look out for results and future opportunities.Stay Connected !! Your quiz time is about to finish. 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