Cost of Goods Sold MCQs (1-10)

1. Net sales = Sales less?

(a) Sales returns

(b) Sales discounts

(c) Sales returns & allowances

(d) Sales returns & allowances and sales discounts

Correct! Wrong!

2. If the Gross profit is Rs. 5,000 and the net profit is 25% of the Gross profit. The expenses?

(a) Rs. 3,750

(b) Rs. 1,250

(c) Rs. 4,150

(d) Rs. 6,250

Correct! Wrong!

3. Cost of Goods sold is classified as which type of account?

(a) Asset

(b) Liability

(c) Revenue

(d) Expense

Correct! Wrong!

4. Conversion cost = Direct labor +___________?

(a) Labor

(b) F.O.H

(c) Material

(d) None of these

Correct! Wrong!

5. Which one of the following assets could be described as a current asset?

(a) Stock of goods for resale

(b) Machinery to manufacture goods for resale

(c) Buildings to house the machinery

(d) Land on which the buildings stand

Correct! Wrong!

6. The largest expense of most manufacturing firms is?

(a) Salaries Expense

(b) Amortization Expense

(c) Rent Expense

(d) Cost of goods sold

Correct! Wrong!

7. The specific cost of the workforce used to produce a product such cost is called?

(a) Direct labor cost

(b) Direct material cost

(c) Other than production cost

(d) None

Correct! Wrong!

8. Which of the following product costs is both a prime cost and conversion cost?

(a) Direct labor

(b) Manufacturing overhead

(c) Indirect material

(d) All of the above

Correct! Wrong!

9. Which of the following is NOT included under the head of FOH cost?

(a) Indirect Material

(b) Indirect Labor

(c) Indirect Expense

(d) Direct labor

Correct! Wrong!

10. A firm had beginning finished goods inventory of Rs. 15,000, ending finished goods inventory of Rs. 20,000 and cost of goods sold of Rs. 80,000. What was the cost of goods manufactured?

(a) Rs. 80,000

(b) Rs. 85,000

(c) Rs. 75,000

(d) Rs. 65,000

Correct! Wrong!

1. Net sales = Sales less?

2. If the Gross profit is Rs. 5,000 and the net profit is 25% of the Gross profit. The expenses?

3. Cost of Goods sold is classified as which type of account?

4. Conversion cost = Direct labor +___________?

5. Which one of the following assets could be described as a current asset?

6. The largest expense of most manufacturing firms is?

7. The specific cost of the workforce used to produce a product such cost is called?

8. Which of the following product costs is both a prime cost and conversion cost?

9. Which of the following is NOT included under the head of FOH cost?

10. A firm had beginning finished goods inventory of Rs. 15,000, ending finished goods inventory of Rs. 20,000 and cost of goods sold of Rs. 80,000. What was the cost of goods manufactured?

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