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 considered a real account? Cash Account Capital Account Discount Allowed Outstanding Rent None 2. What is the primary objective of financial accounting? Determine costs of production Provide information to stakeholders Control over business expenses Ascertain break-even points None 3. Which concept states that revenue should be recognized when it is earned, regardless of when it is received? Matching Concept Accrual Concept Conservatism Going Concern None 4. What is the journal entry for depreciation? Debit Depreciation Account, Credit Asset Account Debit Asset Account, Credit Depreciation Account Debit Cash Account, Credit Depreciation Account Debit Asset Account, Credit Cash Account None 5. Which of the following accounts has a credit balance? Purchases Account Cash Account Sales Account Prepaid Expenses Account None 6. Which document is prepared first in the accounting cycle? Trial Balance Ledger Journal Balance Sheet None 7. The principle of conservatism leads to which of the following? Understatement of profits Overstatement of profits Equal profits each year None of the above None 8. Which financial statement shows the financial position of a business as of a specific. Income Statement Balance Sheet Cash Flow Statement Statement of Retained Earnings None 9. Which of the following is not a cash flow from operating activities? Payment to suppliers Sale of goods Purchase of machinery Interest received None 10. Which type of error will not affect the trial balance? Error of omission Error of commission Compensating error All of the above None 11. Which of the following is an example of fixed costs? Direct Materials Depreciation Factory Wages Sales Commission None 12. Prime cost is equal to: Direct Materials + Direct Wages + Direct Expenses Total Cost - Factory Overheads Cost of Goods Sold - Operating Expenses Direct Wages + Factory Overheads None 13. In cost accounting, EOQ stands for: Effective Order Quantity Economic Order Quantity Estimated Order Quantity Essential Order Quantity None 14. Which of the following is a method of costing used in construction contracts? Job Costing Process Costing Batch Costing Contract Costing None 15. The difference between standard cost and actual cost is called: Loss Profit Variance Contribution None 16. Break-even analysis shows the relationship between: Costs, volume, and profit Costs and sales Revenue and investment Profit and loss None 17. Which costing method is used in industries where homogeneous products are produ Job Costing Process Costing Activity-Based Costing Marginal Costing None 18. What is the main objective of cost accounting? Maintain ledger accounts Ensure statutory compliance Determine and control costs Prepare financial statement None 19. Which of the following is considered an indirect expense? Direct Material Cost Factory Rent Direct Labor Cost Raw Material Purchases None 20. The cost sheet provides information about: Profit earned during the year Cost structure of a product Cash inflows and outflows Fixed assets of a company None 21. Which document is used for recording credit purchases? Purchase Order Invoice Purchase Return Book Purchase Journal None 22. Opportunity cost refers to: Cost incurred in the past Cost of the next best alternative foregone Cost of future operations None of the above None 23. Which costing technique is used to fix selling prices? Marginal Costing Absorption Costing Activity-Based Costing D Contract Costing None 24. Which accounting standard deals with the presentation of financial statements? AS 1 AS 3 AS 9 AS 10 None 25. Which method of stock valuation considers the most recent costs first? FIFO LIFO Weighted Average Specific Identification None 26. Depreciation is an example of: Variable Cost Fixed Cost Semi-variable Cost Sunk Cost None 27. Which of the following is part of administrative overheads? Factory Maintenance Office Salaries Selling Expenses Distribution Costs None 28. Which account is debited for goods returned by customers? Purchase Return Account Sales Return Account Sales Account Sundry Debtors Account None 29. What is used to measure efficiency in a process? Contribution Margin Productivity Ratio Material Variance Break-even Point None 30. The term “absorption costing” is also known as: Full Costing Variable Costing Marginal Costing Direct Costing None 31. Which of the following is not a contingent liability? Claims against the company not acknowledged as debt Unpaid dividend Pending lawsuits Guarantee given on behalf of others None 32. Which of the following is recorded in the books as a contra entry? Cash deposited into the bank Credit purchase of goods Payment of rent Issue of shares None 33. Goods withdrawn by the proprietor for personal use should be credited to which account Drawings Account Capital Account Purchases Account Cash Account None 34. Provision for doubtful debts is shown in the balance sheet under: Current Liabilities Current Assets Reserves and Surplus None of the above None 35. Which of the following errors will affect the agreement of the trial balance? . Error of omission Error of principle Partial omission of a transaction Compensating error None 36. What is the treatment for preliminary expenses in financial statements? Shown as an asset on the balance sheet Shown as a liability on the balance sheet Written off in the profit and loss account Ignored completely None 37. Which of the following is a revenue expenditure? Purchase of land Repairs of machinery Installation cost of machinery Construction of a new factory building None 38. Which costing system is most appropriate for a company producing unique products for each customer? Process Costing Job Costing Batch Costing Marginal Costing None 39. The term “idle time” in cost accounting refers to: Time during which no production is carried out . Time spent on machine maintenance Extra hours worked by employees Time taken for transportation of goods None 40. Which of the following best describes a cost center? A location, person, or item of equipment for which costs are ascertained A unit responsible for generating revenue A unit responsible for profit generation A cost allocation method None 1 out of 4 Great job on taking the INCOC Test! 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