Costing MCQs (1-10)

1. Revenue minus all direct costing of making the goods or supplying the services is known as?

(a) Gross profit

(b) Cost of sales

(c) Expenses

(d) Net profit

Correct! Wrong!

2. During costing process, to arrive at the gross profit of a trading business, which one of the following formula is applied?

(a) Sales - (Opening Stock - Purchases - Closing Stock)

(b) Sales - (Opening Stock + Purchases + Closing Stock)

(c) Sales - (Opening Stock + Purchases - Closing Stock)

(d) Sales - (Opening Stock - Purchases + Closing Stock)

Correct! Wrong!

3. Direct expenses are?

(a) Carriage inward

(b) Carriage outward

(c) Carriage outward

(d) Both a & c

Correct! Wrong!

4. Net Purchases equal the invoice amount and?

(a) Plus freight-in, plus discounts

(b) Less purchase returns, plus purchase allowances

(c) Plus freight-in, less purchase discounts

(d) Plus discounts, less purchase returns

Correct! Wrong!

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

(a) Asset

(b) Liability

(c) Revenue

(d) Expense

Correct! Wrong!

6. Consider the following information for costing purpose?

(a) Rs. 10,000

(b) Rs. 15,000

(c) Rs. 5,000

(d) Rs. 25,000

Correct! Wrong!

7. Which of the following would not be considered a component of 'cost' of Goods Sold?

(a) Sales force Salaries

(b) Transportation for purchase

(c) Import duties or raw material

(d) Factory electricity expense

Correct! Wrong!

8. Which of the following is used to determine the cost of goods sold?

(a) Beginning inventory + Purchases

(b) Beginning inventory + Purchases – Sales

(c) Beginning inventory + Net Purchases + Direct expenses – Ending inventory

(d) Ending inventory + Purchases – Beginning inventory

Correct! Wrong!

9. Which of the following would not be considered as a component of 'cost' of stock?

(a) Salaries of selling staff

(b) Transportation inward costs

(c) Import duties

(d) Purchase price

Correct! Wrong!

10. As a costing team member, calculate the gross profit if; Sales Rs. 6000; cost of sales Rs. 5,000; opening stock Rs. 1,000; purchases Rs. 4,000; wages Rs. 2,000 and office rent Rs. 1,000?

(a) Loss Rs. 2,500

(b) Loss Rs. 1,500

(c) Profit Rs. 2,500

(d) Profit Rs. 1,000

Correct! Wrong!

1. Revenue minus all direct costing of making the goods or supplying the services is known as?

2. During costing process, to arrive at the gross profit of a trading business, which one of the following formula is applied?

3. Direct expenses are?

4. Net Purchases equal the invoice amount and?

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

6. Consider the following information for costing purpose?

7. Which of the following would not be considered a component of 'cost' of Goods Sold?

8. Which of the following is used to determine the cost of goods sold?

9. Which of the following would not be considered as a component of 'cost' of stock?

10. As a costing team member, calculate the gross profit if; Sales Rs. 6000; cost of sales Rs. 5,000; opening stock Rs. 1,000; purchases Rs. 4,000; wages Rs. 2,000 and office rent Rs. 1,000?

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