Contract Costing MCQ | Cost Accounting MCQs (Free Resource)

21. Work certified is between 50% and 90% 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

22. The entire contract is complete. 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) Entire profit

23. If a contract is 40% complete, credit taken to the profit and loss account is
(a) 40% of the notional profit
(b) 1/3 rd of Notional profits, reduced in the ratio of cash received to work certified
(c) NIL
(d) 2/3 rd of Notional profits, reduced in the ratio of cash received to work certified

24. Value of work certified – Rs 5,00,000
Cost of work to date – Rs 4,00,000
Cost of work not yet certified – Rs 1,00,000
Notional Profit is
(a) Rs 1,00,000
(b) Nil
(c) Loss Rs 1,00,000
(d) Rs 2,00,000

25. The total profit on a contract for Rs 3,00,000 is Rs 60,000 and the contract is 60% complete and has been certified accordingly. The retention money is 20% of the certified value, then the amount of profit that can be prudently credited to Profit and Loss Account
(a) Rs 60,000
(b) Rs 36,000
(c) Rs 28,800
(d) Rs 48,000

26. Contract cost – Rs 2,80,000
Contract value – Rs 5,00,000
Cash received – Rs 2,70,000
Uncertified work – Rs 30,000
Deduction from bills by way of retention money is 10%.
How much profit, if any, you would take to the profit and loss account?
(a) Rs 50,000
(b) Rs 33,333
(c) Rs 30,000
(d) Nil

27.Total cost of contract to date – Rs 3,83,000
Cost of contract not yet to certified – Rs 23,000
Value of work certified – Rs 4,20,000
Cash received to date – Rs 3,78,000
Value of work-in-progress is
(a) Rs 65,000
(b) Rs 41,000
(c) Rs 23,000
(d) Rs 14,000

28. Total cost of contract to date – Rs 3,83,000
Cost of contract not yet to certified – Rs 23,000
Value of work certified – Rs 4,20,000
Cash received to date – Rs 3,78,000
Reserve for contingencies is
(a) Rs 60,000
(b) Rs 24,000
(c) Rs 36,000
(d) Rs 1,000

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