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 about the conservatism principle in accounting? Profits should be recognized as soon as they are earned Losses should be recognized only when they are realized Profits should be recognized when they are earned and losses should be anticipated Losses should be ignored unless they are incurred None 2. The historical cost principle requires that: Assets be recorded at their current market value Assets be recorded at the price at which they were acquired Assets be recorded at their fair value Depreciation is applied to assets based on their fair market value None 3. Which of the following is an example of a liability? Cash Accounts receivable Accounts payable Capital None 4. Which of the following is NOT considered an accounting principle? Materiality Consistency Time-period assumption Inflation accounting None 5. The matching principle is best illustrated by: Recognizing revenue when it is earned Recognizing expenses in the period when they help to generate revenue Recording transactions only when cash changes hands Matching assets to liabilities None 6. In the straight-line method of depreciation, the depreciation expense is calculated as: (Cost - Residual value) ÷ Useful life Cost ÷ Useful life (Cost - Residual value) × Useful life Residual value ÷ Useful life None 7. The declining balance method of depreciation is an example of: A method that applies a fixed percentage to the asset’s original cost A method that applies a fixed amount of depreciation each year A method that applies a fixed percentage to the book value of the asset A method that adjusts depreciation for inflation None 8. In which of the following scenarios would the units of production method of depreciation be most appropriate? A building A machine with predictable usage A vehicle with unpredictable use An office desk None 9. Which of the following would NOT be a factor in determining the depreciation of an asset? Useful life Residual value Market value Depreciation method None 10. A company acquired a machine for ₹1,00,000 with an expected residual value of ₹10,000 and a useful life of 10 years. What will be the annual depreciation using the straight-line method? ₹9,000 ₹10,000 ₹11,000 ₹12,000 None 11. Which of the following is NOT a component of the equity section of the balance sheet? Retained earnings Share capital Accumulated depreciation Reserves and surplus None 12. The primary purpose of the income statement is to: Show the financial position of the company Report cash inflows and outflows Measure the profitability of the company Report assets, liabilities, and equity None 13. In the balance sheet, assets are classified into which two categories? Fixed and current Current and non-current Tangible and intangible Capital and revenue None 14. Which of the following statements is correct? The income statement summarizes a company's revenue and expenses over a period The balance sheet shows the financial performance over a specific period Cash flow statements are not part of the financial statements The income statement does not include the cost of goods sold None 15. Which of the following is NOT an example of an operating activity in the cash flow statement? Payment to suppliers Cash received from customers Purchase of machinery Payment of wages None 16. In a bank reconciliation, if the bank statement shows a deposit not recorded in the cash book, the adjustment in the cash book should be: A deduction An addition No adjustment A correction of the opening balance None 17. Which of the following would cause the cash book balance to be higher than the bank statement balance? Bank service charges Unpresented cheques Deposit in transit Overdraft from the bank None 18. An overdraft shown in the bank statement will be: Added to the cash book balance Deducted from the cash book balance Ignored during reconciliation Subtracted from the bank statement None 19. Which of the following would result in a bank balance that is lower than the cash book balance? Bank interest earned Uncredited deposits Bank service charges Cheques in hand None 20. A cheque received from a customer and deposited but not yet cleared by the bank would be: Recorded as a liability in the cash book Recorded as a deposit in the bank reconciliation statement Added to the bank balance Recorded as a receivable in the income statement None 21. A fixed cost is one that: Changes with the level of production Remains constant regardless of production levels Varies depending on sales volume Is incurred only when production is started None 22. Which of the following is a characteristic of variable costs? They remain constant per unit produced They do not vary with the production level They are incurred regardless of the production level They remain constant in total for all production levels None 23. Which of the following is included in the cost of goods manufactured (COGM)? Direct materials used Selling and distribution expenses Interest on loans Non-production costs None 24. Which of the following is an example of a semi-variable cost? Electricity bill Rent of office space Salaries of workers Office supplies None 25. Which of the following is an indirect cost? Direct wages Direct materials Factory manager’s salary Production equipment None 26. In job costing, costs are accumulated for: A specific process or production run A specific product or job A batch of similar products A single unit of production None 27. Which costing method is typically used in industries such as oil refining and chemical production? Job costing Process costing Activity-based costing Standard costing None 28. In which of the following methods are costs accumulated by departments rather than by jobs or products? Job costing Process costing Activity-based costing Batch costing None 29. Which of the following is the key feature of job order costing? Costs are accumulated by product type Each product or batch is treated as a separate job All products are produced in a continuous flow Costs are accumulated by production process None 30. Activity-based costing is most useful in businesses that: Produce a high volume of similar products Have limited overhead costs Have diverse products and overhead activities Focus on labor cost control None 31. The material cost variance is calculated as: (Actual price - Standard price) × Actual quantity (Standard price - Actual price) × Standard quantity (Actual quantity - Standard quantity) × Standard price (Actual quantity × Actual price) - (Standard quantity × Standard price) None 32. Which of the following variances measures the effect of using more or fewer materials than expected? Material Price Variance Material Usage Variance Labor Rate Variance Sales Volume Variance None 33. The labor efficiency variance is the difference between: Actual hours worked and standard hours, multiplied by the actual rate Actual hours worked and standard hours, multiplied by the standard rate Actual rate and standard rate, multiplied by actual hours Standard hours allowed and actual hours worked, multiplied by actual rate None 34. Which of the following measures the effect of selling more or fewer units than expected? Sales Price Variance Material Usage Variance Sales Volume Variance Labor Efficiency Variance None 35. A favorable variance occurs when: Actual costs exceed standard costs Actual revenue exceeds standard revenue Actual costs are lower than standard costs Standard revenue exceeds actual revenue None 36. Which of the following is a feature of a flexible budget? It is prepared based on fixed assumptions It adjusts for changes in production or It is prepared for a single level of activity It remains unchanged regardless of actual performance None 37. The primary advantage of zero-based budgeting is that: It uses historical data to create the budget It assumes all activities are justified every year It simplifies budgeting for large organizations It eliminates the need for forecasting None 38. Which of the following is a disadvantage of incremental budgeting? It ignores historical performance It provides less flexibility for changes in costs It can result in budgeting inefficiencies due to its reliance on previous budgets It requires more complex forecasting techniques None 39. A rolling budget is updated: Once a year Monthly or quarterly After the end of the fiscal year Whenever necessary None 40. Which of the following budgets focuses on the estimation of future cash receipts and payments? Sales Budget Cash Budget Capital Budget Production 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. Few seconds left. 1 2 3 4 Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! 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