Question

1- Financial Accounting is done for the benefit of……………………………………

Creditors

Government

All of the above

Investors

2-

Wages paid to factory workers is an example of …………………………………

Group of answer choices

Indirect Cost

Period Cost

Direct Cost

None of the above

3-

Manufacturing Overheads are an example of…………………………………………….

Group of answer choices

None of the above

Period Cost

Product Cost

Direct Cost

4- Budgeting is an integral part of………………………………………………………………….

Group of answer choices

Managerial Accounting

Forensic Accounting

Financial Accounting

Responsibility Accounting

5- The inventory valuation technique in which the inventory purchased later will be used first is called………………………………………….

Group of answer choices

Average Cost

Specific Cost

LIFO

FIFO

6-Administrative expenses belong to the category……………………………………………………………………

Group of answer choices

Product Cost

Period Cost

None of the above

Direct Cost

7- The information of the company must not be shared by the management accountant with the external parties is covered under the ethical code……………………………………………………….

Group of answer choices

Credibility

Integrity

Confidentiality

Competence

10 - The Inventory valuation technique suitable for articles which have unique identification code is called......................

Group of answer choices

LIFO

Specific Cost

Average Cost

EOQ

Answer 1

1. Answer is all of the above

Financial accounting is done for external parties. External parties are the parties outside the organisation. They include shareholders, Creditors, government and regulatory agencies like tax authorities, stock exchanges, etc

2. Answer is direct cost

Wages paid to workers in factory is a direct cost. It is part of prime cost of the product. They are variable cost in nature. Indirect cost is manufacturing overheads which facilitate the production. Period cost is the cost charged to the period in which they are incurred like administrative expenses and selling expenses.

3. Answer is product cost

Manufacturing overheads are part of the product cost. They are included in product costing. They are not charged to the period in which they are incurred and hence not period cost. They are not direct cost and indirect cost incurred to facilitate production of the firm.

4. Answer is Managerial accounting

Budgeting is a plan of action to achieve strategic goals and objectives of the firm. It is part of management accounting. It is implemented by firm to strengthen its competitive advantage in the marketplace. Budgets are part of planning function of the management function.

5. Answer is LIFO

In LIFO method the inventory purchased later is used first in issuing to the cost of goods sold. Average cost issue is based on average cost, specific cost issues inventory based on specific lot. FIFO issues stock based on earlier purchase

6. Answer is period cost

Administrative cost is the expense which is charged to the period in which they are incurred. They are period cost. It is not product cost because it not part of factory overheads. Direct cost is the cost directly associated with product like direct material and direct labor.

7. Answer is confidentiality

As per confidentiality code the information gathered by management account should not shared externally to outside parties. Any such sharing is considered violation of the code.

10. Answer is Specific cost

The specific cost method issues inventory based on identification of each stock. It is suitable for inventories which are high value in nature and slow moving. In LIFO method the inventory purchased later is used first in issuing to the cost of goods sold. Average cost issue is based on average cost. FIFO issues stock based on earlier purchase