681. _ is the first phase of the accounting cycle?
A: Identifying an economic event or transaction
B: Preparing journals
C: Posting entries to ledger accounts
D. Identifying an economic event or transaction
682. Absorption means:
A. Charging of overheads to cost units
B: Fees charged to cost centers or cost units for overhead
C: Charging of overheads to cost centre
D: None of them
683. The costs of administration are recouped as a percentage of:
A. Direct materials
B. Prime cost
C. Direct wages
D. Works cost
684. Which of the following is a service department?
A. Refining department
B. Receiving department
C. Machining department
D. Finishing department
685. Which of the following is not selling overhead?
A. Transportation insurance to cover sold goods
B. Royalty on sales
C. Legal costs for debt realization
D. Distribution of samples
686. In the case of a company that only produced one type of uniform product, which strategy would you recommend for covering factory overhead costs?
A. Percentage of direct wages basis
B. A rate per unit of output
C. Direct labor hour rate
D. Any of the above
687. When the amount of under- or over-absorption is significant, it should be disposed of by:
A. Moving into the profit and loss costing account
B. The use of supplementary rates
C. Extending as a conceded charge to the following bookkeeping year
D. None of them
688. Idle capacity of a plant refers to the difference between:
A. Maximum capacity and practical capacity
B. Practical capacity and normal capacity
C. Capacity based on actual sales expectations and capacity
D. Maximum capacity and actual capacity
689. The maximum possible productive capacity of a plant, when no operating time is lost, is its:
A. Practical capacity
B. Theoretical capacity
C. Normal capacity
D. Capacity based on sales
690. The capacity which is based on the long-term average of the sales expectancy level is known as:
A. Practical capacity
B. Normal capacity
C. Actual capacity
D. None of these
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