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 64 of 99
- A. cyclical factors
- B. indexed technique
- C. price estimation
- D. cost estimation
Explanation: Cost reduction initiatives can be judged properly only when the costs expected to arise are estimated accurately.
Correct answer: cost estimation- A. fixed terms
- B. indexed terms
- C. variable terms
- D. residual terms
Explanation: A residual is the vertical difference between an observed value and the value predicted by the regression line.
Correct answer: residual terms- A. unit estimation
- B. production estimation
- C. cost estimation
- D. price estimation
Explanation: Cost estimation uses historical and analytical techniques to forecast the costs likely to be incurred in the future.
Correct answer: cost estimation- A. functional range
- B. relevant range
- C. unit range
- D. related range
Explanation: The relevant range is the activity interval within which cost behavior assumptions, such as fixed cost and variable cost rates, remain…
Correct answer: relevant range- A. stationary
- B. not stationary
- C. intrinsic
- D. extrinsic
Explanation: The cost-driver relationship is not stationary because technology, prices, efficiency and operating conditions can change over time.
Correct answer: not stationary- A. abnormality of residuals
- B. normality of regression
- C. normality of residuals
- D. abnormality of regression
Explanation: Normality of residuals means the errors are distributed around the regression line in a regular pattern, usually centered around zero.
Correct answer: normality of residuals- A. variable technique
- B. least square technique
- C. indexed technique
- D. fixed technique
Explanation: The least-squares technique estimates the line by minimizing the sum of squared vertical differences between observed and predicted cost…
Correct answer: least square technique- A. curved
- B. slightly sloped
- C. completely sloped
- D. dotted
Explanation: A weak relationship produces a regression line with a small slope, showing that changes in the cost driver cause relatively little change…
Correct answer: slightly sloped- A. non expression
- B. non constant
- C. objective
- D. non objective
Explanation: Quantitative methods use numerical data and statistical calculations, so they provide an objective basis for estimating costs.
Correct answer: objective- A. inverse proportion
- B. direct proportion
- C. badness proportions
- D. goodness proportion
Explanation: A negative slope means cost moves in the opposite direction to the cost driver, indicating an inverse relationship.
Correct answer: inverse proportion- A. write a liner function
- B. write price function
- C. write manufacturing function
- D. plot the data
Explanation: After collecting the observations, plotting the data helps reveal the relationship between cost and the suspected cost driver before the…
Correct answer: plot the data- A. goodness of fit
- B. economic plausibility
- C. significance of independent variable
- D. all of above
Explanation: A regression equation is evaluated for goodness of fit, economic plausibility and the statistical significance of its independent…
Correct answer: all of above- A. disadvantage of low high method
- B. disadvantage of high low method
- C. advantage of high low method
- D. advantage of low high method
Explanation: The high-low method estimates a cost function using only the highest and lowest activity observations, ignoring all other data points.
Correct answer: disadvantage of high low method- A. customer sustaining costs
- B. customer output unit-level costs
- C. customer batch-level costs
- D. corporate sustaining costs
Explanation: Customer output-unit-level costs arise from activities performed for each individual unit sold, such as processing or delivering one unit.
Correct answer: customer output unit-level costs- A. indirect cost
- B. partial cost
- C. benchmark cost
- D. direct cost
Explanation: An indirect cost cannot be traced to a particular cost object in an economically feasible way, even though it may benefit that object.
Correct answer: indirect cost- A. sales mix variance
- B. sales volume variance
- C. flexible budget variance
- D. static budget variance
Explanation: A static budget variance compares the original static-budget amount with the actual result.
Correct answer: static budget variance- A. customer level indirect costs
- B. customer level direct costs
- C. corporate level direct costs
- D. corporate level indirect costs
Explanation: These costs support a customer rather than a particular product unit, batch, or corporate-wide function, so they are grouped as…
Correct answer: customer level indirect costs- A. $7,500
- B. $6,500
- C. $1,000
- D. $10,000
Explanation: Sales volume variance is the difference between the flexible and static budgets.
Correct answer: $1,000- A. customer sustaining costs
- B. customer output unit-level costs
- C. customer batch-level costs
- D. corporate sustaining costs
Explanation: Customer batch-level costs arise from activities performed for a group of units sold to a customer, such as processing one order or…
Correct answer: customer batch-level costs1280. The difference between static budget amount and the flexible budget amount is named as ___________?
- A. sales mix variance
- B. sales volume variance
- C. flexible budget variance
- D. static budget variance
Explanation: The difference between the static budget and the flexible budget reflects the effect of the actual activity or sales volume, and is called…
Correct answer: sales volume variance