Contract Costing MCQ | Cost Accounting MCQs (Free Resource)

11. Retention Money is equal to
(a) Work certified Less Work uncertified
(b) Contract price Less Work certified
(c) Work certified Less Payment received by contractor
(d) None of the above

12. Material supplied by the Contractee
(a) is debited to the Contract Account
(b) is ignored in the Contract Account
(c) is credited to the Contract Account
(d) is debited to the Contractee’s Account

13. Cost of material lost or destroyed
(a) is credited to the Contract Account
(b) is debited to the Contract Account
(c) is debited to the Costing Profit and Loss Account
(d) is credited to the Costing Profit and Loss Account

14. Work Certified is valued at
(a) Cost price
(b) Market price
(c) Cost or market price whichever is less
(d) Estimated price

15. Value of Work Certified Less Profit =
(a) Work-in-progress
(b) Cost of Work Certified
(c) Retention Money
(d) Cost of uncertified work

16. The Total Value of Work Completed during an accounting year is equal to
(a) Work Certified + Progress Payment Received
(b) Work Certified + Work Uncertified
(c) Work Certified + Retention Money
(d) None of the above

17. Notional Profit is equal to
(a) Work certified Less Cost of work certified
(b) Work certified Less Cost of work completed
(c) Payment received Less Work certified
(d) None of the above

18. Work-in-progress at year end is equal to
(a) only closing stock of materials
(b) only work certified
(c) only work uncertified
(d) the total of all the above

19. Work certified is less than 25% of the contract price. The transfer to P & L A/c will be
(a) 1/3 rd of Notional profits
(b) NIL
(c) 2/3 rd of Notional profits
(d) 100% of Notional profits

20. Work certified is between 25% and 50% of the contract price. The transfer to P & L A/c will be
(a) 1/3 rd of Notional profits, reduced in the ratio of cash received to work certified
(b) NIL
(c) 2/3 rd of Notional profits, reduced in the ratio of cash received to work certified
(d) 100% of Notional profits

Answers: 11)Work certified Less Payment received by contractor 12)is ignored in the Contract Account 13)is credited to the Contract Account 14)Cost price 15)Cost of Work Certified 16)Work Certified + Work Uncertified 17)Work certified Less Cost of work certified 18)the total of all the above 19)NIL 20)1/3 rd of Notional profits, reduced in the ratio of cash received to work certified

• MCQs on other topics of Cost Accounting