50+ Cost Control Accounts MCQ’s | Cost Accounting (Free Resource)
Cost Control Accounts MCQ’s
1. Materials Requisition Note
(a) authorises and records the issue of materials for use
(b) records the return of unused materials
(c) records the transfer of materials from one store to another
(d) a classified record of materials, issues, returns and transfers
2. Materials Transfer Note
(a) authorises and records the issue of materials for use
(b) records the return of unused materials
(c) records the shifting of materials from one store to another
(d) a classified record of materials, issues, returns and transfers
3. A document which is a classified record of material issues, returns and transfers
(a) Materials Requisition Note
(b) Materials Return Note
(c) Materials Transfer Note
(d) Materials Issue Analysis Sheet
4. This is essential to make the cost ledger ‘self-balancing’.
(a) General Ledger Adjustment Account
(b) Stores Ledger Control Account
(c) Work-in-Progress Ledger
(d) Finished Goods Control Account
5. This is debited with all purchases of materials for the stores and credited with all issues of materials
(a) General Ledger Adjustment Account
(b) Stores Ledger Control Account
(c) Work-in-Progress Ledger
(d) Finished Goods Control Account
6. In this, cost of materials, wages and overheads of each job undertaken is posted.
(a) General Ledger Adjustment Account
(b) Stores Ledger Control Account
(c) Work-in-Progress Ledger
(d) Finished Goods Control Account
7. This represents the total value of finished goods in stock.
(a) General Ledger Adjustment Account
(b) Stores Ledger Control Account
(c) Work-in-Progress Ledger
(d) Finished Goods Control Account
8. Material amounting to Rs 58,300 is purchased on credit.
The entry in Cost Ledger under non-integrated System is
(a) Purchases A/c Dr. 58,300
To Sundry Creditors 58,300
(b) Stores Ledger Control A/c Dr. 58,300
To General Ledger Adjustment A/c 58,300
(c) Purchases A/c Dr. 58,300
To Cost Ledger Control A/c 58,300
(d) Work-in-Progress Control A/c Dr. 58,300
To General Ledger Adjustment A/c 58,300
9. Salaries and wages amounting to Rs 62,100 gross and earned by the employees, and deductions of Rs 5,400 as provident fund. Rs 2,400 as ESIC and Rs 4,300 as Income Tax are made from the gross amount.
The entry in Cost Ledger under non-integrated System is
(a) Salaries and Wages Control A/c Dr. 62,100
To General Ledger Adjustment A/c 62,100
(b) Salaries and Wages Control A/c Dr. 50,000
To General Ledger Adjustment A/c 50,000
(c) Salaries and Wages Control A/c Dr. 62,100
To Cost Ledger Adjustment A/c 62,100
d) Salaries and Wages Control A/c Dr. 62,100
To Provident Fund A/c 5,400
To E.S.I.C. A/c 2,400
To Income-tax A/c 4,300
To General Ledger Adjustment A/c 50,000
10. A concern has a non-integrated costing system. Salaries and wages analysis book indicates the following breakup :
Direct wages Rs 38,600
Indirect factory wages Rs 9,500
Administrative salaries Rs 9,700
Selling and distribution salaries Rs 4,300
Which of the following statements is false-
(i) No additional entry is passed in financial books for break-up.
(ii) Work-in-progress Ledger Control A/c will be debited with Rs 38,600.
(iii) Salaries and Wages Control A/c will be debited with Rs 62,100.
(a) only (i)
(b) All
(c) only (iii)
(d) None
| Answers: 1)authorises and records the issue of materials for use 2)records the shifting of materials from one store to another. 3)Materials Issue Analysis Sheet 4)General Ledger Adjustment Account 5)Stores Ledger Control Account 6)Work-in-Progress Ledger. 7)Finished Goods Control Account 8)b 9)a 10)c |
11. In a non-integrated system of accounting, the emphasis is on,
(a) Personal accounts
(b) Real accounts
(c) Nominal accounts
(d) All of these
12. Cost and financial accounts are required to be reconciled under
(a) Integral system
(b) Cost control accounts system
(c) Under both (a) and (b)
(d) None of these
13. Which of the following accounts makes the cost ledger self-balancing ?
(a) Overhead adjustment account
(b) Costing P & L account
(c) Cost ledger control account
(d) None of the above
14. Purchases for special jobs is debited under non-integrated system to
(a) Work-in-progress ledger control account
(b) Cost ledger control account
(c) Stores ledger control account
(d) Purchases account
15. The following documents are used in accounting for raw materials:
(i) Goods received note
(ii) Materials returned note
(iii) Materials requisition note
(iv) Delivery note
Which of the documents may be used to record raw materials sent back to stores from production?
(a) (i) and (ii)
(b) (i) and (iv)
(c) (ii) only
(d) (ii) and (iii)
16. The raw materials issued to a job were overestimated and the excess is being sent back to the materials store. What document is required?
(a) Stores credit note
(b) Stores debit note
(c) Materials returned note
(d) Materials transfer note
17. What is an interlocking bookkeeping system?
(a) A single, combined system containing both cost accounting and financial accounting records
(b) A system combining cost accounting and management accounting
(c) A system with high secured access
(d) A system where separate accounts are kept for cost accounting and for financial accounting
18. What is a cost ledger control account?
(a) An account in the cost ledger to record financial accounting items
(b) An account in the financial ledger to record cost accounting items
(c) An account that summarises outstanding payables balances
(d) An account that summarises outstanding receivables balances
19. The advantages of maintaining cost control accounts include the following:
(a) facilitate prompt preparation of costing profit and loss account
(b) help management in policy formulation
(c) facilitate internal check
(d) all of the above
20. The Work-in-Progress Control Account is not debited with :
(a) direct materials and direct labour
(b) direct expenses
(c) production overheads (recovered)
(d) selling and distribution overheads
| Answers: 11)Nominal accounts 12)Cost control accounts system 13)Cost ledger control account 14)Work-in-progress ledger control account 15)(ii) only 16)Materials returned note 17)A system where separate accounts are kept for cost accounting and for financial accounting 18)An account in the cost ledger to record financial accounting items 19)all of the above 20)selling and distribution overheads |
21. The application of factory overheads usually would be recorded as an increase in
(a) Cost of goods sold
(b) Work-in-progress control
(c) Factory overheads control
(d) Finished goods control
22. The debit balance of the overheads adjustment account may be transferred to
(a) Cost of sales account
(b) Profit and loss account
(c) Finished goods account
(d) Work-in-progress account
23. Materials lost in stores due to fire is
(a) a part of normal loss and hence part of cost
(b) capitalized
(c) a part of abnormal loss and hence excluded from cost
(d) transferred to the next period
24. A credit to Work in Process Inventory represents
(a) work still in process
(b) raw material put into production
(c) the application of overhead to production
(d) the transfer of completed items to Finished Goods Inventory
25. A journal entry includes a debit to Work in Process Inventory and a credit to Raw Material Inventory. The explanation for this would be that
(a) indirect material was placed into production
(b) raw material was purchased on account
(c) direct material was placed into production
(d) direct labour was used for production
26. The journal entry to apply overhead to production includes a credit to Manufacturing Overhead control and a debit to
(a) Finished Goods Inventory
(b) Work in Process Inventory
(c) Cost of Goods Sold
(d) Raw Material Inventory
27. The use of indirect material would usually be reflected as an increase in
(a) Stores control
(b) Work in process control
(c) Manufacturing overhead applied
(d) Manufacturing overhead control
28. A credit to the Manufacturing overhead control account represents the
(a) actual cost of overhead incurred
(b) actual cost of overhead paid this period
(c) amount of overhead applied to production
(d) amount of indirect material and labour used during the period
29. When employees assemble products
(a) Cost of goods manufactured decreases
(b) Work in process inventory increases
(c) Work in process inventory decreases
(d) Manufacturing overhead decreases
30. W Corporation’s production department used Rs 64,000 of materials to manufacture products during May. Which one of the following is one effect of recording this transaction?
(a) Raw materials increases by Rs 64,000
(b) Manufacturing overhead increases by Rs 64,000
(c) Cost of goods sold increases by Rs 64,000
(d) Work in process increases by Rs 64,000
| Answer: 21)Work-in-progress control 22)Profit and loss account 23)a part of abnormal loss and hence excluded from cost 24)the transfer of completed items to Finished Goods Inventory 25)direct material was placed into production 26)Work in Process Inventory 27)Manufacturing overhead control 28)amount of overhead applied to production 29)Work in process inventory increases 30)Work in process increases by Rs 64,000 |
31. The Finished Goods account contains the cost of all units
(a) Unfinished at a given point in time
(b) Completed at a given point in time
(c) Produced during a particular period
(d) Produced and sold during a particular period
32. The work in process account is credited when
(a) Production of product is completed
(b) Products are sold to customers
(c) Completed goods are shipped to buyers
(d) Costs of production are incurred
33. Which account balances will decrease as a result of completing products during the month?
(a) Only work-in-process inventory
(b) Only finished goods inventory
(c) Both work-in-process and finished goods ending balances will decrease
(d) Neither account ending balance would increase; both would increase
34. T Company completed two jobs whose costs total to Rs 1,20,000. Which one of the following is one effect of this transaction?
(a) Manufacturing Overhead increases by Rs 1,20,000
(b) Cost of Goods Sold increases by Rs 1,20,000
(c) Work in Process decreases by Rs 1,20,000
(d) Finished Goods decreases by Rs 1,20,000
35. N Corporation incurred Rs 8,000 indirect labour and Rs 42,000 direct labour. Which one of the following is one effect of recording this transaction?
(a) Indirect labour increases by Rs 8,000
(b) Work in process increases by Rs 50,000
(c) Manufacturing costs increase by Rs 42,000
(d) Manufacturing overhead increases by Rs 8,000
36. The balance of the Work in Process account is equal to
(a) The total costs of the jobs completed
(b) The total costs of the jobs completed and sold
(c) The total manufacturing costs incurred during the period
(d) The total costs of the incomplete jobs
37. What entry should be made when a job is completed?
(a) A debit to Finished Goods Inventory, and a credit to Work in Process Inventory
(b) A debit to Work in Process Inventory, and a credit to Direct Materials, Direct Labour and Manufacturing Overhead
(c) A debit to Finished Goods Inventory and a credit to Direct Materials, Direct Labour, and Manufacturing Overhead
(d) A debit to Cost of Goods Sold Inventory, and a credit to Work in Process Inventory
38. When indirect materials are requisitioned the _______ account is increased.
(a) Manufacturing Overhead Control
(b) Work-in-Process Control
(c) Materials Control
(d) Accounts Payable Control
39. The Manufacturing Overhead Control account
(a) is increased by allocated manufacturing overhead
(b) is credited with amounts transferred to Work-in-Process
(c) is decreased by allocated manufacturing overhead
(d) is debited with actual overhead costs
40. A company’s accounting system operates so that the cost accounts are independent of thefinancial accounts. The two sets of accounts are reconciled on a regular basis to keep themcontinuously in agreement. This type of accounting system is known as
(a) Independent accounts
(b) Interlocking accounts
(c) Reconciled accounts
(d) Integrated accounts
| Answer: 31)Completed at a given point in time 32)Production of product is completed 33)Only work-in-process inventory 34)Work in Process decreases by Rs 1,20,000 35)Manufacturing overhead increases by Rs 8,000 36)The total costs of the incomplete jobs 37)A debit to Finished Goods Inventory, and a credit to Work in Process Inventor 38)Manufacturing Overhead Control 39)is debited with actual overhead costs 40)Interlocking accounts |
41. In May, material requisitions were Rs 44,000 (Rs 39,000 of these were direct materials), and raw material purchases were Rs 57,700. The end of month balance in raw materials inventory a/c was Rs 24,300. What was the beginning raw materials inventory a/c balance?
(a) Rs 10,600
(b) Rs 43,000
(c) Rs 72,400
(d) Rs 25,300
42. Overallocated manufacturing overhead results when
(a) production is less than last year
(b) estimated overhead is less than actual overhead
(c) actual overhead is less than allocated overhead
(d) actual overhead is less than expected
43. Determining how much manufacturing overhead is overallocated or underallocated
(a) is done before the period starts
(b) is done during the period
(c) can be done at any time
(d) is done at the end of the period
44. The journal entry to record the use of direct materials on jobs is to debit work in process inventory and credit
(a) raw materials inventory
(b) finished goods inventory
(c) manufacturing overhead
(d) wages payable
45. Cost of goods sold is debited and finished goods inventory is credited for
(a) purchase of goods on account
(b) transfer of goods to the finished goods storeroom
(c) transfer of materials into work in process inventory
(d) the sale of goods to a customer
46. Under which of the following situations is finished goods inventory debited and work in process inventory credited?
(a) Transfer of goods to the finished goods storeroom
(b) Purchase of goods on account
(c) Transfer goods out of the factory
(d) Transfer of material to work in process inventory
47. Under which of the following situations is raw materials inventory credited and work in process inventory debited?
(a) We ship goods to the customer
(b) Material is transferred to the factory
(c) We transfer goods to the storeroom
(d) We purchase goods on account
48. The cost of direct materials used in production is debited to
(a) either manufacturing overhead or work in process
(b) finished goods inventory
(c) work in process
(d) manufacturing overhead
49. The cost of direct labour used in production is recorded as a
(a) debit to work in process
(b) debit to manufacturing overhead
(c) debit to wages expense
(d) debit to wages payable
50. The cost of indirect labour used in the factory is recorded as a
(a) credit to work in process
(b) debit to manufacturing overhead
(c) credit to wages payable
(d) debit to wages expense
| Answer: 41)Rs 10,600 42)actual overhead is less than allocated overhead 43)is done at the end of the period 44)raw materials inventory 45)the sale of goods to a customer 46)Transfer of goods to the finished goods storeroom 47)Material is transferred to the factory 48)work in process 49)debit to work in process 50)debit to manufacturing overhead |
51. The journal entry needed to record the completion of a job includes a
(a) credit to work in process
(b) credit to finished goods inventory
(c) debit to work in process inventory
(d) debit to cost of goods sold
52. The journal entry needed to record the completion of a job includes a
(a) debit to cost of goods sold
(b) debit to work in process
(c) debit to finished goods inventory
(d) debit to raw materials inventory
53. The journal entry to issue Rs 600 of direct materials and Rs 40 of indirect materials involves a debit to
(a) manufacturing overhead for Rs 640
(b) work in process for Rs 640
(c) work in process for Rs 600 and a credit to manufacturing overhead for Rs 40
(d) work in process for Rs 600 and a debit to manufacturing overhead for Rs 40
54. To record the costs of indirect labour, which of the following would be debited?
(a) Work in process
(b) Manufacturing overhead
(c) Finished goods inventory
(d) Wages payable
55. To record direct labour costs incurred, which of the following would be debited
(a) Finished goods inventory
(b) Manufacturing overhead
(c) Work in process
(d) Wages payable
56. To record the requisition of direct materials, which of the following would be debited?
(a) Finished goods inventory
(b) Work in process
(c) Raw materials inventory
(d) Cost of goods manufactured
57. The journal entry to record Rs 300 of depreciation expense on factory equipment involves a
(a) debit to accumulated depreciation for Rs 300
(b) debit to manufacturing overhead for Rs 300
(c) debit to depreciation expense for Rs 300
(d) credit to manufacturing overhead for Rs 300
58. Actual manufacturing overhead for the period is Rs 20,000 while allocated manufacturing overhead is Rs 18,000. What entry will close the manufacturing overhead balance?
(a) Debit manufacturing overhead and credit work in process for Rs 2,000
(b) Debit manufacturing overhead and credit cost of goods sold for Rs 2,000
(c) Debit cost of goods sold and credit finished goods inventory for Rs 2,000
(d) Debit cost of goods sold and credit manufacturing overhead for Rs 2,000
59. A company has overallocated manufacturing overhead by Rs 1,500. The entry to close manufacturing overhead account would be to
(a) debit manufacturing overhead and credit cost of goods sold for Rs 1,500
(b) debit manufacturing overhead and credit work in process for Rs 1,500
(c) debit cost of goods sold and credit manufacturing overhead for Rs 1,500
(d) debit cost of goods sold and credit finished goods inventory for Rs 15,000
60. The entry to record cost of goods sold includes a credit to
(a) Cost of Goods Sold
(b) Finished Goods Inventory
(c) Sales
(d) Work in Process Inventory
| Answer: 51)credit to work in process 52)debit to finished goods inventory 53)work in process for Rs 600 and a debit to manufacturing overhead for Rs 40 54)Manufacturing overhead 55)Work in process 56)Work in process 57)debit to manufacturing overhead for Rs 300 58)Debit cost of goods sold and credit manufacturing overhead for Rs 2,000 59)debit manufacturing overhead and credit cost of goods sold for Rs 1,500 60)Finished Goods Inventory |
