Reconciliation of Cost and Financial Accounts

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35 Que, 35 Marks

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1- The need for reconciliation of profit as cost and financial accounts arises:.................. *

1 point

For checking arithmetical accuracy of financial accounts

For ensuring reliability of cost accounts

To comply with provision of the statute and accounting standard

To facilitate internal audit work

2- The reasons for difference of profit between cost & financial accounts can be grouped under........................ *

1 point

Purely labour items

Purely financial items

Purely material items

All of the above

3- The reconciliation of profit between cost & financial accounts can be presented in which of the following ways: *

1 point

Contribution approach

Memorandum of profit & loss account

Cost sheet format

None of the above

4- Cost & financial accounts are reconciled in ..................system. *

1 point

Integrated Accounts

Standard Accounts

Integrated & Standard Accounts

Non-integrated Accounts

5- Appropriation of profit is .............in cost accounts. *

1 point

Included

Not included

Considered

Separately shown

6- Purely financial items are.................in financial accounts. *

1 point

Not included

Considered

Not considered

None of the above

7- In cost accounts stock are valued at - *

1 point

Cost

Net realizable value

Cost or net realizable value whichever is less

Estimated cost

8- Which of the following statement is correct in relation to treatment of abnormal losses? *

1 point

Abnormal losses are considered in financial accounts

Abnormal losses are separately shown in cost accounts

Neither (a) & (b)

Both (a) & (b)

9- When actual expenses are less than recovered in cost accounts it is known as................. *

1 point

Under absorption

Over absorption

Under valued

Under applied

10- When actual expenses are more than recovered in cost accounts it is known as ....................... *

1 point

Under absorption

Over absorption

Over valued

Over applied

11- Capital losses on sale of fixed assets are........ *

1 point

Normally excluded from cost accounts

Included in cost accounts of manufacture of fixed assets

Considered in financial accounts

All of the above

12- If profit as per cost accounts is starting point in reconciliation statement then over valuation of opening stock in cost accounts is ...........to arrive at profit as per financial accounts. *

1 point

Added

Deducted

Excluded

Adjusted

13- If profit as per cost accounts is starting point in reconciliation statement then over valuation of closing stock in cost accounts is..........to arrive at profit as per financial accounts. *

1 point

Added

Deducted

Excluded

Adjusted

14- If loss as per cost accounts is starting point in reconciliation statement then over valuation of closing stock in financial accounts is...................to arrive at loss as per financial accounts. *

1 point

Added

Deducted

Excluded

Adjusted

15- If loss as per financial accounts is starting point in reconciliation statement then over valuation of opening stock in financial accounts is.................to arrive at loss as per cost accounts. *

1 point

Added

Deducted

Excluded

Adjusted

16- Which of the following ledger is maintained in cost accounts? *

1 point

Work-in-progress Ledger

Sundry Debtors Ledger

Sundry Creditors Ledger

All of the above

17- The reconciliation of profit between cost & financial accounts can be done by preparing ................... *

1 point

Trial balance

Balance sheet

Memorandum reconciliation statement

Profit & loss account

18- Notional charges in cost accounts............. *

1 point

Increases financial profit

Decreases financial profit

increases costing profit

Decreases costing profit

19- Under non-integral system, cost and financial accounts do not need to be reconciled. *

1 point

True

False

Partly true

Partly correct

20- Reconciliation of cost and financial accounts ensures the accuracy of the two sets of accounts. *

1 point

True

False

Partly true

Partly correct

21- Under absorption of overhead results in higher amount of profits in cost accounts. *

1 point

True

False

Partly true

Partly correct

22- If profit as per both set of books i.e. financial and cost accounts is same and equal, there is no need to make reconciliation statement. *

1 point

True

False

Partly true

Partly correct

23- Which of the following item not included in cost accounts? *

1 point

Damages payable at law

Dividend on share capital

Debenture interest

All of the above

24- Which of the following item is included in cost accounts? *

1 point

Transfer to general reserve

Charitable donation

Notional interest

None of the above

25- In case of under absorption of overheads ................... *

1 point

Costing profit is under stated

Costing profit is over stated

Financial profit is over stated

There is no impact on costing profit

26- Which of the following will cause a difference between profit as per cost account and profit as per financial account? *

1 point

Depreciation on asset even when the book value of the asset is reduced to negligible figure.

Interest on capital but upon which no interest is actually paid.

Losses due to scrapping of machinery

All of the above

27- If profit as per cost accounts is starting point in reconciliation statement then "profit on sale of fixed assets" is .............to arrive at profit as per financial accounts. *

1 point

Added

Deducted

Excluded

Adjusted

28- Reconciliation of cost & financial accounts in the modern computer is redundant. *

1 point

False

True

Partly false

Partly correct

29- Interest on capital but upon which no interest is actually paid can be recorded in financial accounting. *

1 point

False

True

Partly false

Partly correct

30- There is difference of profit in cost and financial account due to under absorption of works overheads. Which of the following statement is correct? *

1 point

Profit in financial account is more than profit in cost accounts

Profit in financial account is less than profit in cost accounts

Profit in cost account is less than profit in financial accounts

All of the above

31- There is difference of profit in cost and financial account due to over absorption of works overheads. Which of the following statement is correct? *

1 point

Profit in financial account is more than profit in cost accounts

Profit in financial account is less than profit in cost accounts

Profit in cost account is less than profit in financial accounts

All of the above

32- There is difference of loss in cost and financial account due to over absorption of selling overheads. Which of the following statement is correct? *

1 point

Loss in financial account is less than Loss in cost accounts

Loss in financial account is more than Loss in cost accounts

Loss in cost account is less than Loss in financial accounts

All of the above

33- When costing profit is Rs. 12,500 and a charge in lieu of rent is Rs. 1,000, the financial profit should be............. *

1 point

Rs. 11,500

Rs. 12,500

Rs. 13,500

None of the above

34- Which of the following are not considered as purely financial charges? *

1 point

Loss on sale of fixed assets

Discount on issue of shares

Interest on bank loan, mortgages, debentures, etc.

Transfer fees received

35- Which of the following items is to be included both in cost accounts and financial accounts - *

1 point

Salary of the proprietor

Rent on owned premises

Notional interest on capital employed

Salary to staff

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