All Free Accounting MCQs with Answers
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1,971 questions · page 54 of 99
1061. An amount of additional cost incurred for any particular activity is classified as ____________?
- A. incremental cost
- B. differential cost
- C. dependent cost
- D. independent cost
Explanation: Incremental cost is the extra cost caused by undertaking an additional activity or increasing the level of activity.
Correct answer: incremental cost- A. multi-collinearity information
- B. quantitative information
- C. qualitative analysis
- D. obtaining information
Explanation: After identifying a decision problem, the next step is to obtain the information needed to evaluate the available alternatives.
Correct answer: obtaining information- A. qualitative factors
- B. quantitative factors
- C. expected factors
- D. recorded factors
Explanation: Quantitative factors are outcomes that can be expressed numerically, such as costs, revenues, quantities, or profits.
Correct answer: quantitative factors- A. irrelevant
- B. depreciated cost
- C. salvages
- D. relevantSearch Public Records
Explanation: The disposal or salvage value of an old machine affects the comparison between alternatives, so it is relevant to a replacement decision.
Correct answer: relevantSearch Public Records- A. incremental decisions
- B. outsource decisions
- C. product mix decisions
- D. in-source decisions
Explanation: A product mix decision determines which products to make and sell and the quantity of each when resources are limited.
Correct answer: product mix decisions- A. quantitative analysis
- B. decision method
- C. qualitative method
- D. linearity methodTry Prep Courses
Explanation: A decision method combines quantitative analysis, such as costs and profits, with qualitative analysis, such as quality or employee…
Correct answer: decision method- A. employee morale
- B. cost of materials
- C. cost of workers
- D. cost of marketing
Explanation: Employee morale is qualitative because it describes an attitude or workplace condition that is not directly measured in monetary terms.
Correct answer: employee morale- A. dependent cost
- B. independent cost
- C. incremental cost
- D. differential costHire An Accountant
Explanation: Differential cost is the difference in cost between two or more alternatives.
Correct answer: differential costHire An Accountant- A. qualitative factors
- B. quantitative factors
- C. expected factors
- D. recorded factors
Explanation: Financial factors with a measurable monetary value are quantitative factors because they can be expressed numerically, such as rupees…
Correct answer: quantitative factors- A. employee behavior at workplace
- B. employee satisfaction
- C. employee morale
- D. cost of materials
Explanation: The cost of materials is a quantitative factor because it can be measured in units and money.
Correct answer: cost of materials- A. demand or supply decisions
- B. make or buy decisions
- C. relevant or irrelevant decision
- D. idle or busy decisions
Explanation: A make-or-buy decision compares producing a product internally with purchasing it from an outside supplier.
Correct answer: make or buy decisions- A. linear predictions
- B. dependent predictions
- C. making predictions
- D. independent predictions
Explanation: After identifying the decision and considering the available alternatives, the process proceeds to making predictions about the costs and…
Correct answer: making predictions- A. unrecorded costs
- B. recorded costs
- C. sunk costs
- D. bunked costs
Explanation: Costs already incurred in the past cannot be changed by a current decision, so they are called sunk costs.
Correct answer: sunk costs- A. offshore cost
- B. outsource cost
- C. in-source cost
- D. opportunity costFinance
Explanation: The benefit lost by investing money in idle inventory instead of its best alternative use is an opportunity cost.
Correct answer: opportunity costFinance- A. sunk factors
- B. quantitative factors
- C. qualitative factors
- D. both B and CAccounting & Auditing
Explanation: Decision outcomes are commonly evaluated using both quantitative factors, such as costs and revenues, and qualitative factors, such as…
Correct answer: both B and CAccounting & Auditing- A. identify the problem
- B. identify the linear variable
- C. identify the certainty
- D. identify the multiplier
Explanation: Decision-making begins by identifying and clearly defining the problem, because the objective and alternatives cannot be assessed until…
Correct answer: identify the problem- A. expected cost
- B. expected revenues
- C. irrelevant costs
- D. relevant costs
Explanation: Relevant costs are future costs that differ between alternatives and are therefore useful in decision-making when preparing income…
Correct answer: relevant costs- A. differential in-sourcing
- B. off-shoring
- C. incremental outsourcing
- D. differential outsourcing
Explanation: Obtaining products or services from suppliers in another country, usually to reduce costs, is called off-shoring.
Correct answer: off-shoring- A. past costs
- B. future costs
- C. expected costs
- D. sunk costsFinance
Explanation: Past costs are sunk costs because they have already been incurred and cannot be altered by a present decision, making them irrelevant.
Correct answer: past costs- A. net income irrelevancy
- B. operating income maximization
- C. operating income minimization
- D. operating income relevancy
Explanation: Low-level managers generally control day-to-day operations, so their decisions focus on improving or maximizing operating income.
Correct answer: operating income maximization