Which of the following should be considered as ready for sales in manufacturing concern?

• A) Raw material
• B) Finished goods
• C) Work in process
• D) Stock in trade

Which of the following should be debited on purchase of raw material on cash basis in manufacturing concern?

• A) Material account
• B) Cash account
• C) Purchases account
• D) Finished goods account

Bank charges of RS. 1,000 have been deducted by the bank without our knowledge. What will be its effect on net profit?

• A) Understated by Rs. 1,000
• B) Understated by Rs. 2,000
• C) Overstated by Rs. 1,000
• D) No effect

Carriage inward should be the part of:

• A) Selling expense
• B) Direct cost
• C) Indirect cost
• D) Admin expense

Under perpetual system of recording inventory, purchase of inventory is recognized as _______________.

• A) Income
• B) Admin Expense
• C) Asset
• D) Selling Expense

When correct accounting effect (Dr/Cr) is given in the wrong accounting head but the main head remains correct, is known as:

• A) Error of omission
• B) Error of original entry
• C) Error of commission
• D) Error of principle

Unconsumed direct supplies are considered as:

• A) Inventory
• B) Marketing expenses
• C) Admin Expenses
• D) Selling expenses

Which of the following should be credited for issue of raw material to production department in manufacturing concern?

• A) Cash account
• B) Work in process account
• C) Finished goods account
• D) Material account

Salaries expense of Rs. 5,000 is recorded as Rs. 500. What will be its effect on net profit?

• A) Overstated by Rs. 5,000
• B) Overstated by Rs. 4,500
• C) No effect
• D) Understated by Rs. 4,500

Sales Rs. 500, Returns outwards Rs. 50, Gross Profit Rs. 100, Net Sales =?

• A) Rs. 550
• B) Rs. 650
• C) Rs. 500
• D) Rs. 450

Which of the following is an example of direct materials cost?

• A) Polish and finishing material for chair
• B) A piece of wood for the production of chair
• C) Production worker’s wages
• D) Depreciation expenses

Which of the following should be credited on purchase of raw material on cash basis in manufacturing concern?

• A) Purchases account
• B) Finished goods account
• C) Material account
• D) Cash account

Unconsumed office supplies are considered as:

• A) Admin expense
• B) Inventory
• C) Selling expense
• D) Financial expense

Opening indirect material inventory is adjusted with ____________ of indirect material, to calculate the cost of sales.

• A) Sales
• B) Liabilities
• C) Purchases
• D) Income

Which of the following is a Revenue expenditure?

• A) Purchase of a building
• B) Long term loan from bank
• C) Payment of salaries
• D) Sales revenue

Which of the following is a Capital expenditure?

• A) Payment of salaries
• B) Long term loan from bank
• C) Purchase of a building
• D) Sales revenue

Cotton thread to make fabric in manufacturing concern is:

• A) Stock in trade
• B) Finished goods
• C) Raw material
• D) Work in process

Discount allowed to a debtor is credited under main head:

• A) Expenses
• B) Liabilities
• C) Assets
• D) Income

Total factory cost = Prime cost + ________.

• A) Factory overhead cost
• B) Direct Labor cost
• C) Other Direct cost
• D) Direct Material cost

Cost of inventory =

• A) Selling Price – Further Costs to Sell
• B) Selling Price + Further Costs to Sell
• C) Cost of purchase + conversion cost
• D) Cost of purchase - conversion cost