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 statements is true regarding the 'going concern' concept? The business is expected to cease operations in the near future. The business will continue its operations indefinitely. The business will only operate until the next financial year. The business will continue only if it generates a profit. None 2. Under the accrual concept, revenue is recognized when: Cash is received Goods or services are provided The sale is made The customer pays for the goods or services None 3. Which of the following is an example of a non-cash transaction? Sale of goods for cash Depreciation of an asset Payment of expenses Cash receipt from customers None 4. According to the matching principle, expenses should be matched with: Cash receipts Revenues in the period in which they help generate revenue Capital expenditures Previous periods’ expenses None 5. Which of the following is an example of a contingent liability? A legal claim for damages that may result in a loss Amount payable for goods purchased Interest payable on loan Accrued wages None 6. Which of the following methods of depreciation allocates a fixed amount each year? Straight-line Method Declining Balance Method Sum of Years Digits Method Units of Production Method None 7. In the declining balance method of depreciation, the depreciation expense is: Constant over the asset's useful life Based on a fixed percentage of the asset’s original cost A fixed amount Highest in the first year and decreases thereafter None 8. Which of the following assets is not depreciable? Building Machinery Land Vehicle None 9. The residual value of an asset is: The amount at which the asset is sold at the end of its useful life The depreciation expense allocated each year The original cost of the asset The value of the asset at the time of purchase None 10. Which of the following is an example of a capital expenditure? Office rent Purchase of new machinery Salaries paid to employees Utility expenses None 11. Which of the following is not part of the income statement? Operating Profit Gross Profit Earnings Before Interest and Taxes (EBIT) Net Assets None 12. The balance sheet shows the financial position of a business as of: The beginning of the accounting period The end of the accounting period A specific point in time The middle of the accounting period None 13. The cash flow statement shows the: Profitability of a business Financial position of a business Inflow and outflow of cash Changes in equity None 14. Which of the following is classified as an operating activity in the cash flow statement? Proceeds from the issuance of shares Payment to suppliers for goods and services Purchase of equipment Payment of dividends None 15. The profit or loss from the sale of an asset is shown in which part of the income statement? Operating income Non-operating income Extraordinary income Other comprehensive income None 16. Which of the following transactions will cause a discrepancy between the bank balance and cash book balance? Bank fees Deposits in transit Unpresented cheques All of the above None 17. What is the correct adjustment for a cheque issued but not yet presented for payment in the bank reconciliation? Add to the cash book balance Deduct from the bank balance Deduct from the cash book balance Add to the bank balance None 18. The term ‘unpresented cheques’ refers to: Cheques issued but not yet recorded in the cash book Cheques deposited but not yet recorded in the passbook Cheques issued but not yet cashed or cleared by the bank Cheques received but not yet deposited into the bank None 19. If the bank shows a debit entry of bank charges not recorded in the cash book, the adjustment in the cash book will be: An addition A subtraction No change An error correction None 20. The cost of materials used in production is an example of a: Prime cost Fixed cost Indirect cost Administrative cost None 21. 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 22. Which of the following is considered an indirect cost? Direct wages Factory rent Raw materials Direct expenses None 23. Which of the following is an example of a variable cost? Rent Salaries Raw materials Depreciation None 24. Under absorption costing, fixed manufacturing overhead is: Expensed in the period incurred Allocated to each unit produced Ignored for cost purposes purposes d) Directly None 25. The cost of labor directly involved in the production of goods is classified as: Direct labor Indirect labor Fixed cost Administrative expenses None 26. Which method of costing is most suitable for continuous production processes, such as oil refining? Job costing Batch costing Process costing Contract costing None 27. In job costing, the cost is traced and assigned to: A batch of goods A specific order or job The overall production process A group of similar products None 28. Which of the following is not a feature of process costing? Mass production of identical units Cost is accumulated by process Each unit has a different cost Costs are averaged over all units produced None 29. In which costing method are costs assigned to different departments or processes based on average cost? Job costing Batch costing Process costing Contract costing None 30. Under activity-based costing (ABC), costs are allocated based on: Volume of production Specific activities that drive costs Fixed rates Direct labor hours None 31. The difference between actual costs and standard costs is known as: Profit margin Variance Break-even point Contribution margin None 32. In variance analysis, a favorable variance occurs when: Actual costs exceed standard costs Actual costs are less than standard costs Actual sales are less than standard sales Actual production is lower than expected None 33. The labor rate variance is the difference between: Actual wage rate and standard wage rate, multiplied by actual hours worked Actual hours worked and standard hours, multiplied by standard wage rate Standard wage rate and standard hours, multiplied by actual wage rate Actual labor cost and standard labor cost None 34. The sales volume variance can be calculated as: (Actual units sold - Budgeted units sold) × Standard price (Actual price - Standard price) × Actual units sold (Actual costs - Standard costs) (Actual units sold × Standard price) - (Budgeted units sold × Standard price) None 35. Which of the following variances is calculated by comparing the actual cost of materials with the standard cost of materials? Material Usage Variance Material Price Variance Labor Efficiency Variance Variable Overhead Variance None 36. Which of the following is a benefit of budgeting? It provides a clear financial direction for the company It eliminates the need for financial analysis It ensures that all expenses are fixed It guarantees that profits will increase None 37. The flexible budget adjusts for: Changes in the cost of capital Changes in sales volume and production levels Depreciation and amortization Changes in labor laws None 38. Zero-based budgeting starts with: Previous year's budget Zero Incremental growth assumptions None of the above None 39. In a zero-based budget, every expense is justified based on: Historical expenditure levels Expected future revenue Its necessity for achieving business goals Government regulations None 40. A rolling budget is updated: Once a year Monthly or quarterly After the end of the fiscal year Whenever necessary 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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