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 not an International Accounting Standard (IAS)? IAS 1 - Presentation of Financial Statements IAS 2 - Inventories IAS 12 - Income Taxes IAS 30 - Earnings Per Share None 2. Which accounting concept requires that all income and expenses should be recorded in the period they occur? Matching Concept Accrual Concept Going Concern Concept Realization Concept None 3. The term "materiality" in accounting refers to: Recording of only significant transactions Matching costs with revenues Ensuring that the financial statement shows the true and fair view Recording all events in the accounting period None 4. The accounting principle that assets are recorded at their original cost is known as: Realization Principle Cost Principle Matching Principle Prudence Principle None 5. A statement showing the income and expenditure of a business for a specific period is known as: Balance Sheet Cash Flow Statement Profit and Loss Account Trial Balance None 6. Which of the following is included in the bank reconciliation statement? Adjustments for bank errors Adjustments for unpresented cheques Adjustments for deposits in transit All of the above None 7. When comparing the cash book and passbook, a credit balance in the passbook indicates: Unrecorded payments in the cash book A favorable balance for the business A liability to the bank An error in the bank statement None 8. The purpose of a bank reconciliation statement is to: Confirm that the cash book balance is accurate Match the cash book and bank statement balances Identify bad debts Record unadjusted entries None 9. In bank reconciliation, unpresented cheques are: Added to the cash book balance Deducted from the cash book balance Added to the passbook balance Not included None 10. When comparing the cash book and passbook, a credit balance in the passbook indicates: Unrecorded payments in the cash book A favorable balance for the business A liability to the bank An error in the bank statement None 11. The purpose of a bank reconciliation statement is to: Confirm that the cash book balance is accurate Match the cash book and bank statement balances Identify bad debts Record unadjusted entries None 12. In bank reconciliation, unpresented cheques are: Added to the cash book balance Deducted from the cash book balance Added to the passbook balance Not included None 13. Deposits in transit are: Recorded in the bank statement but not yet entered in the cash book Deposits made by the bank but not yet recorded by the business Cash receipts not yet recorded by the business Cash disbursements not yet recorded by the business None 14. Which of the following is true about depreciation? Depreciation is a non-cash expense Depreciation reduces the book value of an asset Depreciation is deducted from income before tax All of the above None 15. Which of the following is the most commonly used method of depreciation? Straight-Line Method Reducing Balance Method Sum of Years Digits Method Units of Production Method None 16. Under the straight-line method, the annual depreciation is calculated as: (Cost of Asset - Residual Value) ÷ Useful Life (Cost of Asset ÷ Residual Value) × Useful Life (Cost of Asset + Residual Value) ÷ Useful Life Cost of Asset ÷ Useful Life None 17. The term 'amortization' refers to: The depreciation of intangible assets The depreciation of tangible assets The allocation of fixed costs The allocation of variable costs None 18. Which of the following assets is subject to amortization? Building Patent Machinery Land None 19. Which of the following is not a part of the financial statements of a company? Income Statement Balance Sheet Cash Flow Statement Trial Balance None 20. In which financial statement would you find the gross profit of a business? Income Statement Balance Sheet Statement of Cash Flows None of the above None 21. Which of the following is an example of a direct cost? Factory rent Direct wages Depreciation on office equipment Advertising cost None 22. Which of the following costs is not included in the prime cost? Direct materials Direct labor Direct expenses Factory rent None 23. In cost accounting, the term "fixed cost" refers to costs that: Remain constant per unit as production volume changes Vary directly with production volume Do not change with production level Are incurred only in periods of high production None 24. Which of the following is an example of an indirect cost? Raw material Direct wages Factory supervisor’s salary Sales commission None 25. Which of the following is an example of a semi-variable cost? Rent Electricity bill Direct materials Depreciation None 26. Job costing is used primarily for: Continuous production Mass production of identical items Customized or made-to-order goods All types of production None 27. Which of the following is a feature of process costing? Used for customized orders Cost is accumulated for each job Units are produced continuously in large quantities Applied only to service industries None 28. The standard cost system helps in controlling costs by: Setting up benchmarks for comparison Comparing actual costs to standard costs Identifying variances in performance All of the above None 29. Which method of costing is used by industries like construction or shipbuilding? Process Costing Job Costing Contract Costing Batch Costing None 30. Which of the following is a feature of batch costing? Used for continuous production Each batch is treated as a separate job Suitable for large-scale production of identical units All of the above None 31. Which variance reflects the difference between the standard cost of materials used and the actual cost? Material Price Variance Labour Efficiency Variance Material Usage Variance Labour Rate Variance None 32. The purpose of variance analysis is to: Identify and analyze differences between actual and standard performance Evaluate cost behavior Provide information for management decision-making All of the above None 33. The labor efficiency variance is computed as: (Standard rate - Actual rate) × Actual hours (Actual hours - Standard hours) × Standard rate (Actual hours - Standard hours) × Actual rate (Standard rate × Actual hours) None 34. Which of the following is true for favorable variances? Actual costs are higher than standard costs Actual revenue is lower than standard revenue Actual costs are lower than standard costs Actual costs and revenue are equal to standard values None 35. Which variance measures the impact of selling at a price different from the standard price? Sales Price Variance Sales Volume Variance Material Price Variance Labor Rate Variance None 36. A master budget includes which of the following? Sales Budget Production Budget Cash Budget All of the above None 37. Which of the following is an advantage of flexible budgeting? It can adjust to changes in the volume of production It is simple to prepare It only applies to large organizations It uses historical data without adjustments None 38. A cash budget primarily helps in planning for: Revenue generation Working capital management Fixed cost planning Investment activities None 39. In incremental budgeting, the budget for the next period is based on: The budget for the current period A zero-based approach Historical trends The capital expenditure plan None 40. Which type of budget is used to assess the financial performance of an organization at the end of a period? Cash Budget Master Budget Flexible Budget Performance Budget 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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