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 72 of 99
- A. cost object line cost
- B. cost tracing
- C. cost object indirect cost
- D. cost object staff cost
Explanation: Cost tracing assigns a cost directly to a specific cost object when the relationship can be identified economically, such as direct…
Correct answer: cost tracing- A. cost drivers
- B. timed drivers
- C. variable drivers
- D. fixed drivers
Explanation: A cost driver is a factor that causes or influences the amount of cost, such as production volume, machine hours, or activity level.
Correct answer: cost drivers- A. source cost
- B. sacrifice cost
- C. treated cost
- D. cost
Explanation: Cost is the monetary measure of resources sacrificed or forgone to achieve a specific objective.
Correct answer: cost- A. line cost
- B. staff cost
- C. direct cost
- D. indirect cost
Explanation: An indirect cost relates to a cost object but cannot be traced to it economically, so it must be allocated using a reasonable basis.
Correct answer: indirect cost- A. total cost
- B. infeasible cost
- C. fixed cost
- D. variable cost
Explanation: A fixed cost remains constant in total within the relevant production range, even though its cost per unit changes as output changes.
Correct answer: fixed cost- A. specific activity
- B. given time period
- C. common activity
- D. both a and b
Explanation: Whether a cost is fixed or variable depends on the specified activity level and the particular time period being considered.
Correct answer: both a and b- A. direct cost
- B. indirect cost
- C. line cost
- D. staff cost
Explanation: A direct cost can be economically traced to a particular cost object, such as a product, job, or department.
Correct answer: direct cost- A. fixed cost
- B. variable cost
- C. total cost
- D. infeasible cost
Explanation: A variable cost changes in total in proportion to changes in production or activity volume, while its cost per unit generally remains…
Correct answer: variable cost1429. The process of tracing the direct costs and allocation of indirect costs is known as __________?
- A. cost assignment
- B. direct assignment
- C. indirect assignment
- D. economic assignment
Explanation: Cost assignment is the broad process of assigning costs to cost objects, including tracing direct costs and allocating indirect costs.
Correct answer: cost assignment1430. In accounting, the cost which is predicted to be incurred or future cost is known as ________?
- A. past cost
- B. incurred cost
- C. actual cost
- D. budgeted cost
Explanation: A budgeted cost is a cost expected or planned to be incurred in the future.
Correct answer: budgeted cost1431. The process of assigning the indirect costs to any specific cost object is known as ___________?
- A. economic cost
- B. cost tracing
- C. cost allocation
- D. non-economic costs
Explanation: Cost allocation means assigning an indirect cost to a cost object using a reasonable allocation base.
Correct answer: cost allocation1432. The relationship between change in activity and change in total costs is considered as __________?
- A. fixed relationship
- B. cause and effect relationship
- C. ineffective relationship
- D. variable relationship
Explanation: A cause-and-effect relationship explains how a change in an activity, such as production volume, causes a change in total cost.
Correct answer: cause and effect relationship- A. system accumulation
- B. accumulated data
- C. cost accumulation
- D. organized accumulation
Explanation: Cost accumulation is the systematic collection and organization of cost data in an accounting system.
Correct answer: cost accumulation- A. 0.9
- B. 0.4
- C. 0.3
- D. 0.8
Explanation: The empowerment ratio is calculated as empowered employees divided by total processes: 20 ÷ 50 = 0.4.
Correct answer: 0.4- A. theory of contribution
- B. theory of constraints
- C. theory of conflicts
- D. theory of maximization
Explanation: The Theory of Constraints focuses on maximizing operating income by identifying and managing bottlenecks while coordinating non-bottleneck…
Correct answer: theory of constraints- A. rework costs
- B. prevention costs
- C. incremental costs
- D. reengineering costs
Explanation: Prevention costs are incurred to stop non-conforming goods from being produced in the first place.
Correct answer: prevention costs- A. prevention costs
- B. external failure costs
- C. appraisal costs
- D. internal failure costs
Explanation: A defect discovered after shipment has reached the customer, so its cost is an external failure cost.
Correct answer: external failure costs- A. 0.8125
- B. 0.6125
- C. 0.9125
- D. 1.725
Explanation: Manufacturing cycle efficiency is value-added manufacturing time divided by total manufacturing time: 65 ÷ 80 = 0.8125.
Correct answer: 0.8125- A. value chain efficiency
- B. value chain effectivity
- C. manufacturing cycle effectivity
- D. manufacturing cycle efficiency
Explanation: Dividing value-added manufacturing time by total manufacturing time measures manufacturing cycle efficiency.
Correct answer: manufacturing cycle efficiency- A. component and material factors
- B. machine-related factors
- C. human factors
- D. all of above
Explanation: A cause-and-effect, or fishbone, diagram investigates multiple possible causes, including materials, machines and human factors.
Correct answer: all of above