All Free Accounting MCQs with Answers
Every Accounting question in the bank, across all chapters, each with the correct answer and a written explanation. Free and unlimited, with no account needed.
1,971 questions · page 44 of 99
- A. economic order quantity purchasing
- B. annual purchasing
- C. just in time purchasing
- D. both a and b
Explanation: Just-in-time purchasing arranges for materials to arrive directly at the production facility when needed, reducing inventory held and…
Correct answer: just in time purchasing- A. $6.20
- B. $7.20
- C. $4.20
- D. $5.20
Explanation: Opportunity cost of capital per unit is calculated as the required return multiplied by the unit cost: 12% × $35 = $4.20.
Correct answer: $4.20863. The decision model to calculate optimal quantity of inventory to be ordered is called ____________?
- A. efficient order quantity
- B. economic order quantity
- C. rational order quantity
- D. optimized order quantity
Explanation: Economic order quantity, or EOQ, is the inventory model that balances ordering and carrying costs to determine the most economical order…
Correct answer: economic order quantity- A. in-time production
- B. materials requirement planning
- C. on-time production
- D. pull strategy of productionHire An Accountant
Explanation: Materials requirements planning is a push system because production and material purchases are scheduled from forecasted demand and…
Correct answer: materials requirement planning- A. incoming freight
- B. storage costs
- C. insurance
- D. clerical errors
Explanation: Shrinkage reflects inventory losses or discrepancies, including those caused by recording and clerical errors.
Correct answer: clerical errors- A. carrying costs
- B. purchasing costs
- C. stock-out costs
- D. ordering costsCompare Credit Cards
Explanation: Carrying costs arise from holding inventory and include storage, spoilage, obsolescence, insurance and financing costs.
Correct answer: carrying costs- A. $240,000.00
- B. $320,000
- C. $210,000
- D. $420,000
Explanation: Total manufacturing cost equals unit cost multiplied by units manufactured: $70 × 6,000 = $420,000.
Correct answer: $420,000- A. $80
- B. $65
- C. $7
- D. $35
Explanation: Per-unit cost is found by dividing total manufacturing cost by total output: $40,000 ÷ 500 = $80 per unit.
Correct answer: $80- A. $220,000
- B. $232,000
- C. $250,000
- D. $25,000
Explanation: Total manufacturing cost equals cost per unit multiplied by the number of units: $50 × 5,000 = $250,000.
Correct answer: $250,000- A. relevant range
- B. irrelevant range
- C. cause range
- D. effective range
Explanation: Relevant range is the normal span of activity within which the assumed relationship between activity levels and costs remains valid.
Correct answer: relevant range- A. manufacturing sector companies
- B. merchandising sector companies
- C. service sector companies
- D. raw material companiesCompare Credit Cards
Explanation: Manufacturing companies purchase raw materials and transform them into finished goods.
Correct answer: manufacturing sector companies- A. food processing companies
- B. automotive companies
- C. distribution companies
- D. advertising agenciesHire An Accountant
Explanation: Merchandising companies buy finished goods and resell them, so distribution companies belong to this sector.
Correct answer: distribution companies- A. distribution companies
- B. textile companies
- C. retailing companies
- D. internet service providers
Explanation: Textile companies convert materials such as fibres or yarn into finished textile products, making them manufacturing businesses.
Correct answer: textile companies- A. $40
- B. $20
- C. $60
- D. $80
Explanation: Per-unit manufacturing cost is calculated as total manufacturing cost divided by units manufactured: $60,000 ÷ 3,000 = $20 per unit.
Correct answer: $20- A. manufacturing sector companies
- B. merchandising sector companies
- C. service sector companies
- D. raw material companies
Explanation: An industry made up of businesses that provide services is the service sector.
Correct answer: service sector companies- A. service sector companies
- B. raw material companies
- C. manufacturing sector companies
- D. merchandising sector companies
Explanation: Merchandising companies purchase finished goods and resell them in the market without substantially changing them.
Correct answer: merchandising sector companies- A. finished goods inventory
- B. indirect material inventory
- C. direct materials inventory
- D. work in process inventory
Explanation: Direct materials inventory consists of raw materials held for use in manufacturing and traceable to the finished product.
Correct answer: direct materials inventory- A. per unit cost
- B. total cost
- C. total indirect cost
- D. total effective costCompare Credit Cards
Explanation: Per-unit cost is found by dividing total manufacturing cost by the number of units manufactured.
Correct answer: per unit cost- A. direct materials inventory
- B. work in process inventory
- C. finished goods inventory
- D. indirect material inventory
Explanation: Manufacturing cost accounting normally identifies direct materials, work in process, and finished goods as the three main inventory…
Correct answer: indirect material inventory- A. priced budget
- B. exceeding budget
- C. fixed budget
- D. variable budget
Explanation: An excessively tight machine-time standard allows too little time for the work, so actual machine time can exceed the budgeted standard.
Correct answer: exceeding budget