Cost and Works Accounting 2 MCQs and Notes

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📊 Cost and Works Accounting 2
Q. Are the costs of opening WIP, incurred in last period and brought forward as work in progress and the costs that were incurred in the current period, treated the same way?
  • (A) Yes, treated together
  • (B) Treated Separately
  • (C) This question is addressed in the accounting policy adopted for opening work in progress.
  • (D) None
💬 Discuss
✅ Correct Answer: (C) This question is addressed in the accounting policy adopted for opening work in progress.
📊 Cost and Works Accounting 2
Q. When there is opening work in progress there are two types of cost on the debit side of the account. These are the costs that were incurred last period and brought forward as work in progress and the costs that were incurred in the current period.
  • (A) The above statement is correct
  • (B) The above statement is incorrect
  • (C) none
  • (D) none
💬 Discuss
✅ Correct Answer: (A) The above statement is correct
📊 Cost and Works Accounting 2
Q. When there is closing work in progress, costs are shared between finished units and inventory by calculating a cost per equivalent unit.
  • (A) True
  • (B) False
  • (C) none
  • (D) none
💬 Discuss
✅ Correct Answer: (A) True
📊 Cost and Works Accounting 2
Q. When there is closing work in progress (WIP) the concept of _________ is used.
  • (A) Equivalent units
  • (B) Expected units
  • (C) Fair allocated units
  • (D) None
💬 Discuss
✅ Correct Answer: (A) Equivalent units
📊 Cost and Works Accounting 2
Q. Identify which of the following statement is correct.
  • (A) Abnormal gain is a benefit rather than a cost. Whereas abnormal loss is written off as a cost at the end of the financial period.
  • (B) Abnormal gain is an adjustment that increases the profit for the period.
  • (C) Abnormal gain is recorded as a debit entry in the process account, because it is a benefit.
  • (D) All of the above are correct
💬 Discuss
✅ Correct Answer: (D) All of the above are correct
📊 Cost and Works Accounting 2
Q. When actual loss is less than the expected (normal) loss there is:
  • (A) Extra ordinary loss
  • (B) Abnormal loss
  • (C) Abnormal gain
  • (D) None
💬 Discuss
✅ Correct Answer: (C) Abnormal gain
📊 Cost and Works Accounting 2
Q. When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.
  • (A) The above statement is correct
  • (B) The above statement is incorrect
  • (C) none
  • (D) none
💬 Discuss
✅ Correct Answer: (A) The above statement is correct
📊 Cost and Works Accounting 2
Q. Abnormal loss comes with:
  • (A) No recovery/scrape value
  • (B) Recovery/scrape value
  • (C) Either A or B
  • (D) None
💬 Discuss
✅ Correct Answer: (C) Either A or B
📊 Cost and Works Accounting 2
Q. The cost of units of abnormal loss is treated as an _________ for the period, and charged as an ___________for the period
  • (A) Product cost, inventory cost
  • (B) Expense, expense in the income statement
  • (C) Extra cost, suspense cost
  • (D) None
💬 Discuss
✅ Correct Answer: (B) Expense, expense in the income statement

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