300+ TOP Cost Concept MCQs and Answers Quiz Exam

Cost Concept Multiple Choice Questions

1. What’s the primary basis of the concept of cost?

A) Financial audit
B) Tax compliance
C) Cost estimation
D) Analysis of profit
Answer: (C) Cost estimation

Explanation: Cost ascertainment refers to the method of determining costs based on data that is actual. Thus, the calculation of charge in the past is known as cost ascertainment, and the calculation of the future price is called cost estimation. Cost estimation and cost ascertainment are closely linked and can be extremely useful to management.

2. What kind of firm is costing the most

A) Bricklaying companies
B) Oil refining companies
C) Hospitals
D) Transport firms
Answer: (B) Oil refining companies

Explanation: Process costing is appropriate for oil refining businesses. Process costing is suitable for companies that produce homogeneous products and continuous production.

3. How many ways is cost classification possible?

A) There are many ways to use it.
B) Two ways
C) Three ways
D) Four ways.
Answer: (A) There are many ways to use it.

Explanation: Cost classification can be achieved in various ways. In economics, cost classification can be based on variables, fixed or chance production, and sunk costs. However, accounting costs could be classified as indirect or direct for businesses.

4. What cost will be payable even if the company is closed?

A) Cost of shut-down
B) Cost of the historical record
C) Cost of sunk
D) Imputed cost
Answer: (A) Cost of shut-down

Explanation: An imputed expense is caused by using an asset rather than investing it or in the event of a cost resulting from taking an alternative plan of decision. Imputed costs are invisible costs that do not occur directly, unlike actual costs incurred. Imputed costs do not appear on financial statements.

5. How do you define direct costs, also referred to as?

A) Chargeable expenses
B) Other expenses
C) Overhead expenses
D) Major expense
Answer: (A) Chargeable expenses

Explanation: All costs that are not direct materials or direct labour can be identified with a specific process, product, or product are called “Direct Expenses.” Examples include production, royalty, hiring costs for special equipment, etc.

6. Rent for warehouses is a component of what cost?

A) Production cost
B) Cost of factory
C) Prime cost
D) Distribution cost
Answer: (D) Distribution cost

Definition: Distribution cost is the total sum of all the expenses paid by the manufacturer of a product to enable the delivery to the customer from the place it was produced to the final customer.

7. Which tender is it?

A) Estimation of the cost
B) Estimation of the price at which it will be sold.
C) Estimation of units
D) Estimation of profits
Answer: (B) Estimation of the price at which it will be sold.

Explanation: Cost of Tender is the sum of all charges related to the delivery and the certification of the commodity part of the futures contract. Cost of Tender is the total cost of receiving an actual item delivery.

The tender cost is only assessed if the futures contract holder wants to receive the product instead of closing the position before expiration.

8. How do you calculate the sum of all direct costs referred to?

(A) Prime cost
B) Cost of sales
C) Production costs
D) Cost of the work
Answer: (A) Prime cost

Explanation: Prime costs are an expense of a business that is directly linked to the labour and materials used in the production process. It is the term used to describe the costs of a manufactured product that are calculated to provide the highest profit margin for a business. The prime cost determines the direct cost of raw materials and labour used in manufacturing

quality. Direct costs don’t include indirect costs like administration and advertising costs.

9. What items aren’t part of cost accounting?

A) Cost of the product
B) Controlling
C) Planning
D) Profit sharing
Answer: (D) Profit sharing

Explanation: Profit sharing is a method by which employees receive a portion of the business’s net earnings, according to the formula in writing defined in advance. The amount of these payments, which could differ based on pay or salary, is different from regular earnings.

10. What kind of costing do toy manufacturing companies make use of?

A) Multiple costing
B) Batch costing
C) Costing of the unit
D) Costing for the process
Answer: (B) Batch costing

Explanation: Batch Costing is employed when products are manufactured in batches and kept in inventory for assembly of components to produce products that are finished or sold to clients. Costs are gathered for each set. After the collection has been completed, costs per unit are calculated by dividing the total price by the amount units included in each batch.

11 Salary paid to permanent employees is an example of what cost?

A) implicit cost
B) variable cost
C) fixed cost
D) explicit cost
Answer: (C) fixed cost

Explanation: The term “fixed costs” refers to an expense or cost that stays unaffected by the increase or decrease of the number of goods or services offered. They’re typically related to time, such as rent or interest paid each month, and are commonly described as overhead costs. They are essential to achieving higher profits per unit when businesses produce more units.

12. AC is equivalent to MC, where

A) Both are equal
B) Minimum MC
C) AC is minimum
D) None of the above
Answer: (C) AC is minimum

Explanation: The relation between MC and AC is as follows:

(i) If MC (i) is less than AC, AC is lowered.

(ii) If MC is AC, AC becomes constant (or the minimum).

(iii) If MC > AC (iii) When MC > AC, then AC increases.

(iv) MC curve always is intersected by the AC curve at its lowest point.

13 Someone who uses his capital for the business is, e.g., of

A) fixed cost
B) explicit cost
C) implicit cost
D) variable cost
Answer: (c) implicit cost

Explanation: An implicit expense is any expense that has already been incurred but has not been declared an independent expenditure. It is an opportunity cost that occurs when a business uses its internal resources to complete a project without direct payment for the use of resources. That means that when a company assigns its resources, it will never lose the possibility of earning profits from using these resources elsewhere, and there is no cash exchange. But the implicit cost is derived from utilising an asset instead of leasing or purchasing it.

14 The form of Marginal cost

A) M-shaped
B) S-shaped
C) U-shaped
D) L-shaped
Answer: (C) U-shaped

Explanation: Marginal cost curve has a U-shaped in the short-run due to the action that is a part of the “law of variable proportions.” By the law, the MC curve begins to slope downwards until it reaches its lowest point, and then, it starts to increase. This leads to U-shapes of the curve when shown graphically.

15 It is the MC curve is cut AC at its

A) All of the listed
B) Minimum point
C)the highest point
D) None of the above
Answer: (B) Minimum point

Explanation: Marginal cost curve cuts the average cost curve at the least level because it is at this point that AC = MC.

The marginal cost curve crosses that of the total middle-cost curve at its lowest point. This is because the marginal cost of producing the next output unit will always influence the total cost of production. Therefore, the average price will decrease if the marginal cost is lower than the average total cost.

Cost Concept objective questions with answers pdf download online exam test

300+ TOP MCQs on Bills of Exchange and Answers

MCQs on Bills of Exchange: Below are the list of Commerce MCQs and Answers as per the new syllabus. Bills of Exchange Objective Questions.

MCQs on Bills of Exchange :

1. What is the Bill receivable account?
(A) Personal Account
(B) Machinery Account
(C) Real Account
(D) Nominal Account

Answer

Answer: (C)

2. A bill of exchange includes.
(A) An order to pay
(B) A request to pay
(C) A promise to pay
(D) All the above

Answer

Answer: (A)

3. Which bill is drawn and accepted in the same country?
(A) Trade Bill
(B) Foreign Bill
(C) Inland Bill
(D) Accommodation Bill

Answer

Answer: (C)

4. Who draws a bill of exchange?
(A) Creditor
(B) Debtor
(C) Holder
(D) None of the above

Answer

Answer: (C)

5. What is the person known as who draws a bill of exchange
(A) Drawer
(B) Payee
(C) Drawee
(D) None of the above

Answer

Answer: (A)

6. What are the three additional days known as that a drawer gives to the drawee for payment
(A) Conditional days
(B) Additional days
(C) Days of grace
(D) Days of rebate

Answer

Answer: (C)

7. When the drawee signs the bill, it is considered as
(A) Accepted
(B) Retired
(C) Renewed
(D) Endorsed

Answer

Answer: (A)

8. What kind of acceptance is known as when the bill is accepted without any condition?
(A) Qualified acceptance
(B) Conditional acceptance
(C) Blank acceptance
(D) General acceptance

Answer

Answer: (D)

9. When the bill is noted from the notary public, it is known as?
(A) Noting
(B) Discounting
(C) Accepting
(D) None of the above

Answer

Answer: (A)

10. What is retiring a bill under rebate means?
(A) Making a payment of the bill before the due date
(B) Dishonoring of a bill
(C) Making a payment of the bill after the due date
(D) All of the above

Answer

Answer: (A)

300+ TOP Business Studies MCQs for CBSE Class 11th and 12th and Answers

MCQs on Business Studies: Below are the list of Commerce MCQs and Answers as per the new syllabus. Business Studies and enhance your subject knowledge.

Business Studies MCQs for CBSE Class 11th and 12th :

1. Out of four points which is not an economic activity?
(A) Production
(B) Social service
(C) Professional
(D) Trading in goods

Answer

Answer: (B)

2. Which option is not a business activity?
(A) Production of goods
(B) Transportation
(C) Exchange of goods
(D) Work in a factory for wages

Answer

Answer: (D)

3. Which of the following is the characteristic of a business?
(A) Production
(B) Exchange or sale
(C) Risk element
(D) All the above

Answer

Answer: (D)

4. Oil refinery and sugar mill are classified under which industries?
(A) Primary
(B) Secondary
(C) Tertiary
(D) None of the above

Answer

Answer: (B)

5. Identify the activity which does not support trade?
(A) Banking
(B) Warehousing
(C) Insurance
(D) Mining

Answer

Answer: (D)

6. In which occupation people get salary or wages in return for their word?
(A) Employment
(B) Business
(C) Profession
(D) None of the above

Answer

Answer: (A)

7. Which item does not cause any business risk?
(A) Breakdown of machinery
(B) Efficient management
(C) Riot
(D) Changing government policy

Answer

Answer: (D)

8. In which business, the support service activities are categorized?
(A) Commercial industries
(B) Primary industries
(C) Secondary industries
(D) Tertiary industries

Answer

Answer: (D)

9. In business, why it is essential to make a profit?
(A) It provides a return to investors.
(B) It provides funds for future extension
(C) It increases the reputation of a company
(D) All the above

Answer

Answer: (D)

10. Which of the following is a false statement?
(A) The scope of commerce is narrower than business.
(B) Commerce includes trade and auxiliaries to trade.
(C) Foreign trade is purchase and sale by the traders of the same country.
(D) Traders serve as a link between producers and consumers.

Answer

Answer: (C)

11. Which of the following is not a management function.
(A) Planning
(B) Staffing
(C) Cooperating
(D) Controlling

Answer

Answer: (C)

12. Policy formulation comes under which role?
(A) Top-level managers
(B) Middle-level managers
(C) Operational management
(D) All of the above

Answer

Answer: (A)

13. Management is defined as?
(A) An art
(B) A science
(C) Both art and science
(D) None of the above

Answer

Answer: (C)

14. Which of the below-mentioned item does not follow the scalar chain?
(A) Functional structure
(B) Divisional structure
(C) Formal organization
(D) Informal organization

Answer

Answer: (D)

15. What is Centralisation?
(A) Retention of decision-making authority
(B) Dispersal of decision-making authority
(C) Creating division as a profit centre
(D) Opening the new centre of braches

Answer

Answer: (A)

16. To have an effective delegation is important to have a responsibility along with?
(A) Authority
(B) Manpower
(C) Incentives
(D) Promotion

Answer

Answer: (A)

17. Grouping of activities on the basis product lines is a part of.
(A) Delegated organization
(B) Divisional organization
(C) Functional organization
(D) Autonomous organization

Answer

Answer: (B)

18. Policy formulation is a task of?
(A) Top-level managers
(B) Middle-level managers
(C) Operational management
(D) All of the above

Answer

Answer: (A)

19. Which of the element is not a part of the communication process?
(A) Decoding
(B) Communication
(C) Channel
(D) Receiver.

Answer

Answer: (B)

20. Name the process that converts a message into communication symbols
(A) Media
(B) Encoding
(C) Feedback
(D) Decoding

Answer

Answer: (B)

300+ TOP MCQs on Goods and Services Tax and Answers

MCQs on Goods and Services Tax: Below are the list of Commerce MCQs and Answers as per the new syllabus. Ace up your preparation with the Objective Questions available on GST Objective Questions.

MCQs on Goods and Services Tax :

1. What is the full form of GST?
(A) Goods and Supply Tax
(B) Goods and Services Tax
(C) General Sales Tax
(D) Government Sales Tax

Answer

Answer: (B)

2. GST was implemented in India from
(A) 1st January 2017
(B) 1st April 2017
(C) 1st March 2017
(D) 1st July 2017

Answer

Answer: (D)

3. In India, the GST is a dual model of
(A) UK
(B) Canada
(C) USA
(D) Japan
(e) China

Answer

Answer: (B)

4. GST is a consumption of goods and service tax based on
(A) Development
(B) Dividend
(C) Destiny
(D) Duration
(e) Destination

Answer

Answer: (e)

5. India’s GST structure are based on how many structures?
(A) 6
(B) 4
(C) 3
(D) 5

Answer

Answer: (B)

6. The maximum rate for CGST is?
(A) 28
(B) 12
(C) 18
(D) 20

Answer

Answer: (D)

7. The maximum rate for SGST/UTGST is?
(A) 28
(B) 14
(C) 20
(D) 30

Answer

Answer: (C)

8. The maximum rate for SGST/UTGST is?
(A) 28
(B) 14
(C) 20
(D) 30

Answer

Answer: (C)

9. Which code is used to classify goods and services under GST?
(A) HSN Code
(B) SAC/HSN Code
(C) GST Code
(D) SAC Code

Answer

Answer: (B)

10. What does “I” in IGST stands stand for?
(A) Internal
(B) Intregrated
(C) Internal
(D) Intra

Answer

Answer: (B)

300+ TOP MCQs on Retirement and Death of a Partner and Answers

MCQ Questions on Retirement and Death of a Partner: Below are the list of Commerce MCQs and Answers as per the new syllabus. Ace up your preparation with the Objective Questions available on Retirement and Death of a Partner Objective Questions. Understand the concept clearly by consistently practicing the Multiple Choice Questions and score well in your exams.

MCQs on Retirement and Death of a Partner :

1. Retiring partner is compensated for parting with the firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in
(A) Gaining Ratio
(B) Capital Ratio
(C) Sacrificing Ratio
(D) Profit-Sharing Ratio

Answer

Answer: (A)

2. How is goodwill recorded on the retirement of a partner?

A) Remaining Partner’s Capital A/cs Dr. (In gaining ratio)
To Retiring Partner’s Capital A/c (with his share of goodwill)
B) Remaining Partner’s Capital A/cs Dr. (In new ratio)
To Retiring Partner’s Capital A/c (with his share of goodwill)
C) Goodwill A/c Dr.
To AllPartner’s Capital A/cs (In old ratio)
D) Goodwill A/c Dr.
To Retiring Partner’s Capital A/c (with his share)
Answer

Answer: (A)

3. A, B, and C are partners in 3:4:2. B wants to retire from the firm. The profit on revaluation on that date was ₹36,000. The new ration of A and C is 5:3. Profit on revaluation will be distributed as
(A) A ₹16,000, B ₹12,000, C ₹8,000
(B) A ₹12,000, B ₹16,000, C ₹8,000
(C) A ₹22,500, C ₹13,500
(D) A ₹23,625, C ₹12,375

Answer

Answer: (B)

4. A, B, and C share profits and losses of the company equally. B retires form business and his share is purchased by A and C in the of 2:3. New profits sharing ratio between A and C respectively would be
(A) 01:01
(B) 02:02
(C) 07:08
(D) 03:05

Answer

Answer: (C)

5.P, Q, and R have been sharing profits in the ration of 8:5:3. P retires. Q takes 3/16th share from P and R take 5.16th share from P. New profit sharing ratio will be
(A) 01:01
(B) 10:6
(C) 9:7
(D) 5:3

Answer

Answer: (A)

6. A, B, and C are equal partners. C retires. He surrenders 3/5th of his share in favour of A and 2/5th in favour of B. New ratio will be
(A) 3:2
(B) 8:7
(C) 7:8
(D) 2:3

Answer

Answer: (B)

7. P, Q, and R are sharing profit and losses equally. R retires and the goodwill is appearing in the book at ₹30,000. Goodwill of the firm is valued at ₹1,50,000. Calculate the net amount to be credited to R’s capital A/c
(A) ₹ 60,000
(B) ₹ 50,000
(C) ₹ 40,000
(D) ₹ 10,000

Answer

Answer: (C)

8. A, B, and C are partners with profit sharing ratio 4:3:2. B retires and goodwill was valued ₹1,08,000. If A and C share profits in 5;3, find out the goodwill shared A and C in favour of B
(A) ₹ 22,500 and ₹ 13,500
(B) ₹ 16,500 and ₹ 19,500
(C) ₹ 67,500 and ₹ 40,500
(D) ₹ 19,500 and ₹ 16,500

Answer

Answer: (D)

9. A, B, and C are partners in a company sharing profit and loss in the ratio of 2:2:2. On March 31, 2018, C died. Accounts are closed on December 31st every year. The sale for the year 2017 was ₹6,00,000 and profits were ₹60,000. The sales for the period from Jan 1, 2018, to March 31, 2018, were ₹2,00,000. THe shareof the deceased partner in the current year’s profits on the basis of sale is
(A) ₹20,000
(B) ₹8,000
(C) ₹3,000
(D) ₹4,000

Answer

Answer: (D)

10. A, B, and C were partners sharing profit and loss in the ratio of 2:2:1. Books are closed on 31st March every year. C dies on the 5th of November 2018. Under the partnership deed, the executors of the deceased partner are entitled to his profit to the date of death, calculated on the basis of last year’s profit. Profit for the year ended 31st March 2018 was ₹2,40,000. C’s share of profit will be
(A) ₹28,000
(B) ₹32,000
(C) ₹28,800
(D) ₹48,000

Answer

Answer: (C)

300+ TOP MCQs on Trial Balance and Answers Quiz Exam

MCQs on Trial Balance: Below are the list of Commerce MCQs and Answers as per the new syllabus. Trial Balance Objective Questions. Understand the concept clearly by consistently practicing the Multiple Choice Questions and score well in your exams.

MCQs on Trial Balance :

1. Trial balance is used to check the accuracy of
(A) Balance sheet balances
(B) Ledger accounts balances
(C) Cash flow statement balances
(D) Income statement balances

Answer

Answer: (B)

2. In the books of account if a transaction is completely deleted, will it affect the trial balance?
(A) No
(B) Yes
(C) A transaction cannot be omitted

Answer

Answer: (A)

3. What is used in preparing trial balance?
(A) Specialized Journals
(B) Balance Sheet
(C) Ledger Accounts
(D) General Journal

Answer

Answer: (C)

4. What is the trial balance used?
(A) It is a financial statement
(B) It records balances of a balance sheet
(C) It doesn’t contribute to the accounting cycle
(D) It records balances of accounts

Answer

Answer: (D)

5. When debit balance is equal to credit balance then the trial balance means
(A) Account balances are correct
(B) Mathematically Capital+Liabilities=Assets
(C) No mistake in recording transactions
(D) No mistake in posting entries to ledger accounts

Answer

Answer: (B)

6. When is trial balance prepared?
(A) At the end of an accounting period
(B) At the end of a year
(C) Frequently during the year
(D) At the end of a month

Answer

Answer: (A)

7. Which items influence the trial balance agreement?
(A) Deposit in transit
(B) Compensating errors
(C) Complete omission of a transaction
(D) Partial omission of a transaction

Answer

Answer: (D)

8. When credit balances = debit balances, the trial balance check and shows ____________ . It also indicates that there were no errors made during posting and recording and posting.
(A) Understatements of Balances
(B) Errors of Commission
(C) Arithmetic Accuracy
(D) Omissions of Economic Events

Answer

Answer: (C)

9. Which of the following account with normal balance is shown at the debit side of a trial balance?
(A) Creditors account
(B) Unearned income account
(C) Rent income account
(D) Cash account

Answer

Answer: (D)

10. In trial balance, which accounts with normal balance is recorded at the credit side?
(A) Bank account
(B) Equipment account
(C) Cash account
(D) Accrued expenses account

Answer

Answer: (D)