MA1 MOCK 1
Nature of business organisation and the accounting systems
1. What is an organisation chart designed to show?
a. Directions of responsibility
b. Aim of the organisation
c. Main items of expenditure
d. Coding structure
2. Which of the following statements reflect attributes of real time processing in a computer data
processing environment?
(1) Control over the input of data is facilitated
(2) It is suitable for internal regular tasks
(3) Transactions are input and processed immediately
(4) Up-to-date information is always available
a. 1 and 2
b. 3 and 4 only
c. 1, 3 and 4
d. 2 and 3
3. Which of the following are usual tasks carried out by the accounts department in a large business?
(1) Preparation of the payroll
(2) Payment of supplier’s invoice
(3) Quality control of finished product
(4) Deciding on selling prices
a. 2 and 3 only
b. 1 and 2
c. 1 and 4
d. 2, 3 and 4
4. Which of the following is an advantage of having centralised rather than de-centralised business
administration?
a. Administration under control of local management
b. Economy in terms of space and cost
c. Self-sufficient local offices
d. Systems tailored to individual requirements
Nature and purpose of management information
5. Which of the following would MOST likely influence the content of a management information
report?
a) The information requirements of the recipient of the report
b) The cost of obtaining the necessary information
c) Whether the information is from internal or external sources
d) The degree of accuracy of the information within the report
6. Which of the following would NOT be a task of a trainee accountant?
a. Authorising invoices
b. Calculate materials cost
c. Value inventory
d. Estimate product profitability
7. The information below contrasts management accounting with financial accounting.
Management accounting Financial accounting
(1) Accounts presentation determined by (1) Accounts presentation determined by
standards management
(2) Accounts used both within a business and (2) Accounts used within a business only
externally
(3) Concerned both with past data and future (3) Focused on past data
data
(4) Concerned with financial information only (4) Concerned with both financial and non-
financial information
Which of the contrasts is/are TRUE?
a) 2 and 4
b) 1 and 2
c) 1, 3 and 4
d) 3 only
8. Management needs information to make choices between alternatives.
Which purpose of management information is the above statement an illustration of?
a) Reporting
b) Control
c) Decision-making
d) Planning
Transaction processing systems
9. In which department is a purchase order usually prepared?
a. Purchasing department of the buying organisation
b. Dispatch department of the supplying organisation
c. Accounts department of the supplying organisation
d. Inventory stores department of the buying organisation
10. The following information is provided for the amount of a raw material used in the production of a
product.
(kg)
Held in stores 650
On order 1,350
Scheduled for use 420
What is the amount of 'free' inventory?
a. 2,000 kg
b. 230 kg
c. 1,580 kg
d. 2,420 kg
11. What document is required to authorise an issue of raw material from stores?
a. Credit note
b. Sales invoice
c. Materials requisition
d. Purchase requisition
Coding system
12. In the cost coding system of Company A each digit of a code represents a classification, with each
digit further to the right representing a smaller subset than the previous digit.
What type of coding system is Company A using?
a) Sequential
b) Block
c) Mnemonic
d) Hierarchical
13. Which of the following statement(s) about coding is/are CORRECT?
(1) A code is a system of words, letters, figures or symbols used to represent other items
(2) Authorisation of transactions is not required if codes are used
(3) Costs are coded to facilitate their entry into the accounting records
a) 2 and 3
b) 2 only
c) 1 only
d) 1 and 3
Cost classification and behaviour
14. The following information has been provided for four costs at various levels of production.
Production units 100 200 300 500
$ $ $ $
Cost A 10,000 20 per unit
Cost B 1,250 1,750
Cost C 30,000 30,000
Cost D 500 1,500
Which of the costs is a variable cost?
a. Cost D
b. Cost C
c. Cost B
d. Cost A
15. What is meant by the classification of costs by behaviour?
a. Classification of costs as material, labour and other expenses
b. Classification according to whether costs are direct or indirect
c. Classification of costs as prime costs and overheads
d. Classification according to how costs change with activity
16. Telecommunication costs incurred by a business each month are made up of a standing charge plus
an additional amount according to the volume of communications.
How would the telecommunication costs be classified?
a. Semi-variable cost
b. Fixed cost
c. Variable cost
d. Stepped cost
17. How is the contribution per unit calculated in marginal costing?
a. Selling price less total variable costs per unit
b. Selling price less variable production costs per unit
c. Selling price less total costs per unit
d. Selling price less total production costs per unit
18. A company absorbs indirect costs as follows:
Production overheads $29.40 per machine hour worked
Selling and administration overheads 12% of total production costs
During a period 6,000 units of a product were manufactured in 1,000 machine hours. Direct costs
incurred in the manufacture of the product were:
Raw materials $18,600
Labour 1,800 hours at $15 per hour
What is the total cost per unit of the product?
a. $37.00
b. $12.50
c. $14.00
d. $41.44
Cost units, cost centres, profit centres and investment centres
19. Which of the following correctly states the activities of a responsibility centre?
a. An investment centre is responsible for costs and capital investment only
b. A profit centre is responsible for costs and revenues only
c. A profit centre is responsible for revenues only
d. An investment centre is responsible for revenues and capital investment only
20. The following information relates to a division of a business for a period:
Sales revenue $420,000
Capital employed $260,000
Net (operating) profit margin 10%
Cost of capital 8%
What is the residual income of the division?
a. $21,200
b. 2%
c. $3,200
d. $7,600
21. Moon Co has two departments: A and B.
The following information is available for these departments;
Department Department
A B
$ $
Sales 150,000 220,000
Profit 80,000 65,000
Assets 550,000 800,000
Liabilities 124,000 175,000
Which of the following ROCE calculations is correct?
a) Department A: 35.21%
b) Department B: 27.5%
c) Department A: 18.78%
d) Department B: 8.13%
22. The labour efficiency and capacity utilisation ratios in a period were 112% and 94% respectively.
What was the production volume ratio in the period (to the nearest %)?
a. 84%
b. 105%
c. 106%
d. 119%
23. What is a cost unit?
a. A number of different products combined together for cost analysis
b. A unit of a product or service which has costs attached to it
c. A section of the business where a manager is only responsible for costs
d. The cost per unit of a product or service
Accounting for materials
24. Forecast sales and production of product P in the next period are 6,000 units and 5,800 units
respectively. 50 litres of material M are used per 100 units of product P. Inventory of material M
is planned to be reduced by 60 litres in the next period.
What quantity of material M needs to be purchased in the next period?
a. 2,840 litres
b. 2,940 litres
c. 2,960 litres
d. 3,060 litres
25. Which of the following statements would be TRUE if raw materials prices were rising?
a. LIFO would give a lower closing inventory valuation than FIFO
b. Periodic weighted average would give a lower closing inventory valuation than the
cumulative weighted average pricing method
c. FIFO would give a lower profit figure than LIFO
d. Under LIFO production costs would be lower than under FIFO
26. Materials inventory at the beginning of the month totalled $16,780. The following lists activity
during the month:
$
Purchases of materials, all on credit $33,660
Issues of direct materials from inventory $29,010
Issues of indirect materials from inventory $1,980
Return of materials to suppliers $860
Return of materials to inventory following over-issue $620
What was the inventory of materials at the end of the month?
a. $19,690
b. $20,930
c. $19,450
d. $19,210
27. In month 2, the materials purchased by a manufacturing business totalled $126,440. The materials
inventory at the end of month 2 was $75,770. During month 2 the issues of direct materials to
production were $114,960 and issues of indirect materials were $7,590.
What was the balance on the materials control account at the beginning of month 2?
a. $79,660
b. $71,880
c. $56,700
d. $94,840
Accounting for labour
28. A direct worker in a production cost centre worked for 41 hours in week 6. The basic week is 38
hours and the basic rate of pay is $12 per hour. Extra hours are worked to meet the general needs
of the business and are paid at a premium of 20% above the basic rate.
How much of the direct worker's gross wages in week 6 would be charged as a direct cost?
a. $499.20
b. $492.00
c. $456.00
d. $535.20
29. The packaging section in a warehouse operates a piecework payment system as follows:
Units packed Piecework rate
per unit ($)
1 to 5,000 0.04
5,001 to 8,000 0.05
8,001 and above 0.06
Only additional units packed, over the previous threshold, are paid at the higher rates.
If 8,340 units are packed, what would be the total wages for the packaging section?
a. $367.00
b. $370.40
c. $420.40
d. $500.40
30. Which accounts need to be charged for factory wages used in production?
a. Wages control, production overhead and bank
b. Creditors and wages control
c. Wages control, work in progress and production overhead
d. Work in progress and finished goods
31. Binht Co needs 3 active labour hours to produce a single unit. Labour is paid $20 per hour and idle
time is expected to be 20% of total labour hours.
What is the total labour cost of producing 270 units?
a. $12,960
b. $20,250
c. $13,500
d. $19,440
32. In a factory cost centre, direct workers are paid $9 per hour. Ten units of product A are
manufactured per direct labour hour.
If productivity improves by 10%, what will be the direct labour cost per unit of product A (to two
decimal places)?
a. $1.11
b. $0.90
c. $0.82
d. $0.81
Accounting for other expenses
33. Which of the following costs would MOST appropriately be apportioned to cost centres on the
basis of floor space occupied?
a. Heat and light
b. Indirect labour
c. Indirect material
d. Machine depreciation
34. Actual and budgeted figures for a manufacturing cost centre for a period are:
Actual Budget
Overhead costs $181,250 $150,000
Labour hours 75,000 72,000
Labour hours are used to absorb the overheads in the cost centre.
What is the predetermined overhead absorption rate (to two decimal places)?
a. $2.00
b. $2.08
c. $2.42
d. $2.52
35. Central costs in a business are shared to each cost centre.
What term is used for such costs sharing?
a. Absorption
b. Apportionment
c. Re-apportionment
d. Allocation
Accounting for product costs
36. Which of the following are characteristics of job costing?
(1) Job costs are ascertained for a single order or contract
(2) Large volumes of job units are produced and stored as inventory for re-sale
(3) It is possible to identify a job at each stage of completion
a. 1 and 3 only
b. 1 and 2 only
c. 1, 2 and 3
d. 3 only
37. Which of the following correctly describes the calculation of unit cost of production using batch
costing?
a. Prime cost divided by the number of batches produced
b. Cost of sale divided by units in the batch
c. Full production cost divided by the number of units in the batch
d. Direct cost divided by the number of batches produced
38. Which of the following relate to process costing?
(1) Output is always a single product
(2) By products and joints can be produced
(3) It is a continuous production process
(4) Output of one process can become the input of the next process
a. 1, 2, 3 and 4
b. 2 and 3 only
c. 1 and 4 only
d. 2, 3 and 4 only
39. Glip Co uses process costing. In March, 25,000 litres were input to one of its processes. The
normal loss in the process is 8%. The actual output in March was 23,200 litres.
Which of the following occurred in March?
a. An abnormal loss of 200 litres
b. An abnormal gain of 200 litres
c. An abnormal loss of 1,800 litres
d. An abnormal gain of 1,800 litres
Spreadsheets
40. Which of the following is/are advantages of using spreadsheets?
(1) They are suitable for holding very large volumes of data
(2) They enable data to be manipulated easily
(3) They enable complex 'what if' analysis to be performed quickly
(4) Large spreadsheets are unlikely to contain any critical errors
a) 2 and 3 only
b) 1, 2, 3 and 4
c) 1 and 4 only
d) 2 only
41. Which of the following identifies a row of cells in a spreadsheet?
a) A1 - Z10
b) A1 - A20
c) A5 - B6
d) A1 - G1
42. A company has two divisions: North and South. The accountant is preparing a sales report
totalling sales from both divisions. The spreadsheet includes three worksheets: "Total", "North"
and "South". The layout of the spreadsheet is the same for each worksheet.
What formula will be used in cell C3 on the 'Total' spreadsheet to show the company's
total sales for Product 1 in January?
a. =NorthC3+SouthC3
b. =North!C3+South!C3
c. =North!C3:South!C3
d. =!NorthC3+!SouthC3
43. Which of the following correctly describes the range of cells below?
a. C4:F8
b. C4:F4
c. C8:F4
d. F4:C8
44. The image below shows the 'Circular References' error message shown in a spreadsheet status
bar.
What could cause a circular reference error?
a. A formula which does not separate cell references correctly
b. A formula referring to a cell containing text
c. A formula dividing a number by zero
d. A formula which includes a reference to its own cell address
45. What is a spreadsheet file with multiple sheets often referred to as?
a. Worksheet
b. Document
c. Workbook
d. Database
46. Below is a schedule of expenses for Kathy prepared using a spreadsheet.
Which formula would give the average monthly cost?
a. =AVERAGE(B4/B9)
b. =AVERAGE(B4:B9)
c. =SUM(B4:B9)
d. =SUM(B10/6)
47. The formula = B5*B9 - D1/D2 appears in a spreadsheet cell.
Which of the following is a way to re-write the formula in order to produce the same result?
a. (B5 x B9) - (D1 ÷ D2)
b. [(B5 x B9) - D1] ÷ D2
c. [B5 x (B9 - D1)] ÷ D2
d. B5 x [B9 - (D1 ÷ D2)]
48. The management accountant is trying to display a large amount of data in a spreadsheet but
finding it difficult to prevent the column and row headings from scrolling off the screen. She
wants to 'freeze' the first four rows and the first three columns (shaded below) using the freeze
panes function:
Where should the management accountant position the cell pointer when she clicks the
'Freeze panes' function in order to freeze the first four rows and the first three columns as
illustrated?
a) In cell D4
b) In cell C5
c) In cell C4
d) In cell D5
49. A spreadsheet includes the following pie chart which is used to analyse the company’s total
production cost for a product. The direct material cost was $195,500.
What are the production overheads for the product?
a. $850,000
b. $552,500
c. $493,000
d. $337,069
50. A sales representative is completing a spreadsheet with sales information for the week. The
spreadsheet contains the customer name, quantity ordered, the order status and the payment
status.
There are 250 records to be entered.
Which of the following spreadsheet features will be most useful to the sales representative
for the data entry?
a. Freezing the column
b. Freezing the row
c. Splitting the screen
d. Using auto-fill
