Costing and Taxation Questions and Answers

1. Opening balance of raw materials 100 units @ Rs. 5 per unit. Purchase 200 units Rs. 6 per unit and issues 250 units. Value of closing stock under FIFO method is
A. 200
B. 250
C. 300
D. 500

2. The method of pricing materials issues is highly useful where the cost of material is very high and the material is bulky is
C. Simple Avg.
D. None of these

3. Which department prepare the bill of materials
A. account dept
B. stores dept
C. R&D dept
D. none of these

4. Which losses are normally occurred in case of production process?
A. normal loss
B. abnormal loss
C. both of them
D. none of them

5. Standard time 12 hours. lime taken 10 hours. Rate per hour Rs. 40. The bonus under the Halsey premium plan is
A. 80
B. 60
C. 40
D. 20

6. Prime cost includes which of the following costs:
A. indirect material
B. indirect labour
C. direct labour
D. staff salary

7. Wages for idle time can be included in
A. administrative exp.
B. selling exp.
C. production exp.
D. none of these

8. Overhead includes
A. indirect material
B. indirect labour
C. indirect expenses
D. all of these

9. Example of fixed expenses is
A. direct material
B. office rent
C. direct labour
D. electricity bill

10. Indirect materials+ indirect labour + indirect expenses =
A. prime cost
B. works cost
C. overhead
D. cost of sales

11. With the increases in production the variable cost per unit is
A. Increase
B. Decrease
C. Fixed
D. none of these

12. Prime costs + works overhead = ………………
A. factory cost
B. cost of sales
C. cost of goods sold
D. none of these

13. In computation of income from house property interest on house build in loan is allowed under section
A. 24
B. 22
C. 25
D. None of these

14. The rate of standard deduction on net annual value in case of a rented house property is
A. 10%
B. 20%
C. 30%
D. 40%

15. Under which section the assessee is treated as the owner of a house property?
A. U/s 22
B. 24
C. 25
D. 27

16. Dividends are chargeable under the head, income from
A. Salary
B. house property
C. capital gain
D. Other sources

17. Income from lottery
A. fully taxable
B. 50% taxable
C. exempt from tax
D. none of these

18. Which section the incomes are taxable under the head income from other sources is
A. 55
B. 56
C. 57
D. 59

19. How many types of capital assets according to Indian income tax act
A. 2
B. 3
C. 4
D. none of these

20. Which of the following is not a capital assets
A. Residential House
B. Silver ornaments
C. Debenture of company
D. Stock in trade

21. Which of the following is a capital asset?
A. 64% gold bond, 1977
B. 7% gold bond, 1980
C. special bearer bonds, 1971
D. none of these

22. Deduction from income under the head of income from other sources is available under section
A. 80C
B. 80G
C. 10
D. 57

23. According to the Indian Income tax act 1961 income from house property includes in the section
A. 10-14
B. 22-27
C. 28-29
D. 30-35

24. Family pension is taxable under the head income from
A. Salary
B. Profession
C. capital gain
D. other sources

25. Opening balance 1000 units @ Rs. 46 Per unit. Purchases 200 units @ Rs. S0 per unit. Issue 800 units. Closing stock to be valued under simple average method at-
A. Rs 48/unit
B. 46/unit
C. 50/unit
D. 46.67/unit

26. Method which is not applicable for frequently calculating market price
A. Weighted Average Price Method
B. Simple Average Price Method
C. Both of these
D. None of these

27. In weighted average cost price method, the value of closing stock is-
A. Realistic
B. Unrealistic
C. Complicated
D. Both A and B

28. The documents on the basis of which entries are made in the stores Ledger are
A. Goods Received Note
B. Material Requisition Note
C. Material Return Note
D. All of these

29. In a situation of rising market price of raw material the type of pricing method which is appropriate is-
A. First In First out
B. Simple Average
C. Last In First out
D. Weighted Average

30. Under Halsey Premium Plan, Bonus is to be given at the rate of
A. 10% of time saved
B. 20% of time saved
C. 50% of time saved
D. Not in a definite rate

31. The limitation(s) of Rowan Premium Scheme is/are-
A. Complexity
B. Less Bonus for high efficiency
C. Lack of Worker’s Unity
D. All of those

32. Standard time 40 hours, actual time 32 hours, wages per hour Rs 15. Bonus under Halsey scheme is
A. Rs. 60
B. Rs. 34
C. Rs 120
D. None of these

33. Raw Material Cost is
A. Semi Variable Cost
B. Fixed Cost
C. Variable Cost
D. None of these

34. In overhead one can include-
A. Indirect material
B. Indirect wages
C. Indirect expenses
D. All of these

35. Realised or Unrealised rent of any year will be taxable under the section
A. 23
B. 24
C. 25AA
D. None of these

36. Municipal Tax of a house in Kolkata is Rs. 5,400. Municipal Tax @ 15% on Municipal Value. What is the Gross Municipal value of house in Kolkata?
A. Rs. 40,000
B. Rs. 54,000
C. Rs. 36,000
D. None of these

37. Net Annual value of Let out house property is Rs. 2,00,000 and Interest on house building Loan Rs. 30,000. Income from house property will be
A. Rs. 1,20,000
B. Rs. 1,10,000
C. Rs. 1,00,000
D. None of these

38. Under the head Income from house Property, Income from Local Authority house is-
A. Not taxable
B. Taxable
C. 50% taxable
D. None of these.

39. The section of Income Tax Act, 1961 deals with the meaning of term transfer of capital assets is-
A. 2(47)
B. 2 (14)
C. 2(42 A)
D. 2(29 A)

40. Any agricultural land will be considered as capital assets if its distance from Municipal area is –
A. 4 km
B. 6 km
C. 8 km
D. 10 km

41. Loss for transfer of capital assets may be assessed against
A. Income from business
B. Income from other source
C. Capital Gain
D. None of these

42. Which of the following is not a capital Assets under Income Tax Act 1961?
A. House
B. stock-in-trade
C. Gold
D. Share

43. Wining from Lottery (net after deduction of tax 30%) Rs. 14,000 Gross Taxable Income from Lottery will be.
A. Rs. 18200
B. Rs. 20,000
C. Rs. 9,800
D. None of these

44. Dividend received from a Indian Company is Fully exempted in which section of Income Tax Act?
A. 10 (15)
B. 10 (34)
C. 10 (35)
D. None of these

45. Interest on debenture is taxable under the head of-
A. Income from other source
B. Income from business and profession
C. Capital Gain
D. None of these

46. Which of the following incomes are to be charged under Income other source
A. Pension
B. Family Pension
C. Interest on bonds
D. Both B and C

47. FIFO method is suitable
A. Materials are slow moving
B. material are perishable nature
C. prices are falling
D. All

48. Time-keeping means
A. he keeping of records of the worker being
B. the keeping of records for actual time taken to finish a job
C. The of records of the workers attendance in and out of the factory
D. None of these

49. Ideal time means
A. Total hours attended minus hours spent for production
B. Standard time minus total hours attended
C. Standard time minus actual time taken
D. None of the above

50. Depreciation of factory furniture is-
A. Factory overhead
B. A part of prime cost
C. Selling overhead
D. None of these