Definition And Scope Of Auditing(Auditing ) Questions and answers for exam Preparation

Question 1. Cost accounting is one of the subdivisions of

management accounting
financial accounting
corporate accounting
none of these

Explanation:-

Answer: Option A. -> management accounting

Question 2. The basic objective of cost accounting is

recording of cost
reporting of cost
cost control
profit earning

Explanation:-

Answer: Option C. -> cost control

Question 3. Cost objects are

costing systems
costing methods
cost estimates
cost unit and cost center

Explanation:-

Answer: Option D. -> cost unit and cost center

Question 4. Cost unit is used for

cost control
cost reduction
resources foregone
ascertainment of cost

Explanation:-

Answer: Option D. -> ascertainment of cost

Question 5. Cost incurred is identified with

(cost) unit of output
cost control
cost reduction
none of these

Explanation:-

Answer: Option A. -> (cost) unit of output

Question 6. Variable cost increases in total due to

increase in sales
increase in profit
increase in volume of production
all of the above

Explanation:-

Answer: Option C. -> increase in volume of production

Question 7. Imputed cost is a

Differential cost
Fixed cost
Variable cost
Notional cost

Explanation:-

Answer: Option D. -> Notional cost

Question 8. Conversion cost includes;

direct wages and factory overheads
direct expenses and factory overheads
direct materials and factory overheads
direct wages and direct materials cost

Explanation:-

Answer: Option A. -> direct wages and factory overheads

Question 9. Sunk cost is

a foregone cost
invested cost or recorded cost
a postponable cost
none of these

Explanation:-

Answer: Option B. -> invested cost or recorded cost

Question 10. Process costing is suitable for

civil engineering construction
brick making
oil refining-refineries
printing

Explanation:-

Answer: Option C. -> oil refining-refineries