12. In a traditional cost allocation method, direct labour hour-basis is used: Select one: a.To determine service cost allocations b.To determine overhead absorption rate c.To determine departmental allocations d.To determine labour efficiency

13. In a vertical analysis of financial ratios: Select one: a.Divide all income statement items by Turnover b.Dive all income statement items by profits c.Divide all income statement by expenses d.Multiply all income statement items by sales

14. In calculating acid-test, which needs to be excluded from current assets? Select one: a.Opening inventory b.Purchases during the period c.Opening inventory plus purchases d.Closing inventory

Management accounting includes: Select one: a.None of the above b.Financial ratio analysis and cashflows c.Costing and performance management d.Financial reports and budgets

16. Non-current assets can be increased by: Select one: a.Sales of inventories b.Purchase of Plant and equipment c.None of the above d.Sales of plant and equipment

17. Price to earnings ratio is: Select one: a.A measure of profitability of a company b.A measure of companys prices changes in products and services c.A measure of employees efficiency of a company d.A measure of a market perception of a company

18. The following is generally true when using the payback model: Select one: a.Cash inflows are always measured in equal annual amounts b.When faced with two projects giving the same total cash flows, the one with the shorter payback is preferable c.The longer the payback period, the less risk involved d.Payback gives a better indication of return than IRR

19. Three general types of capital budgeting models are: Select one: a.Net present value declining balance and accounting rate of return b.Accounting rate of return, discounted cash flow and units of production c.Net present value, payback, and internal rate of return d.Payback, internal rate of return and units of production

20. What is a conceptual framework for accounting? Select one: a.A statement of principles for standard setting b.A method of depreciation c.An accounting standard d.An objective of financial statements

21. Which of the following describes a fixed cost? Select one: a.Any overhead cost that is incurred in the factory of a manufacturing company b.Any selling, general or administrative cost incurred in a manufacturing company c.A total cost that remains constant within the relevant range of output d.A total cost which fluctuates with changes in output

22. Which of the following is the best definition of a variable cost? Select one: a.A variable cost is one that is associated with goods or services purchased or produced for sale to customers. b.A variable cost is one that is directly traceable to an activity of business for which the cost will be used c.A variable cost is one that changes with changes in the level of activity over a defined period. d.A variable cost is one that is spread over several activities of business for costs are to be determined.

23. Which of the following is the best definition of indirect costs? Select one: a.Indirect costs are spread over several activities of the business for which costs are to be determined. b.Indirect costs are not capable of being managed by the person responsible for the cost centre. c.Indirect costs are not affected by changes in the level of activity over a period. d.Indirect costs are those costs that are treated as expenses in the period in which they are incurred.

24. Which of the following is/are qualitative characteristics of financial information? Select one or more: a.Consistency b.Relevance c.Comparability d.Accruals

25. Which of the following statements is/are correct? (i) There is a general agreement that one general-purpose financial statement can meet the needs of users. (ii) Preparers of general-purpose financial statements tend to regard long-term lenders as the single primary user of information provided. (iii) The IASBs Conceptual Framework bases its support of general-purpose financial statements on the assumption that all users are interested in the financial performance of the reporting entity. Is it: Select one: a.(iii) only b.(i) and (iii) c.(i) only d.(ii) only