Business Accounting Exam Paper

______________________________________________________________
Business Accounting
______________________________________________________________
Instructions to candidates:
This paper has 2 sections A and B. Please answer all questions from sections A and
B
This is an open book examination.
Please download this exam paper and type all your answers under each
question. You can also insert pictures of your answers and workings in the
file. You must make sure all pictures inserted in the file are clearly readable.
Please ensure that your submission is uploaded to Moodle before the end of
the examination.
NOTE:
1. The exam must be taken completely alone. Showing it or discussing it with
anyone would be breaching the regulations.
2. Questions are provided with suggested word limits where applicable.
1

Section A: Answer all of the questions
Q1. The total of direct labour, direct material and direct expenses is known as:
a) Overheads.
b) Prime cost.
c) Secondary cost
d) Semi-variable cost.
e) Budgeted cost.
(1 mark)
Prime cost (b)
Q2. In marginal costing the contribution per unit
a) Increases with the volume of the production
b) Decreases with the volume of the production
c) Decreases as the fixed costs increase
d) Remains the same
(1 mark)
d) Remains the same
Q3. If expenses exceed revenues in a department, then it would be termed a cost
centre.
a) True
b) False
(1 mark)
False (b)
Q4. Which of the following types of information are used in management
accounting?
a) Financial information.
b) Non-financial information evaluation.
c) Information that focuses on the long term.
d) All of the above.
e) None of the above.
(1 mark)
d) All of the above
2

Q5. Conventionally, within a pre-defined range of production volume, if the level of
activity doubles, the variable costs per unit will:
a) Treble.
b) Halve.
c) Remain constant.
d) Quadruple.
(1 mark)
c) Remain constant
Q6. Management accounting is:
a) A branch of financial accounting.
b) Accounting done by managers.
c) Concerned with the provision of information to help managers make
decisions.
d) The process whereby managers account for their actions.
e) Accounting done by tax collectors.
(1 mark)
Concerned with the provision of information to help managers make
decisions. (c)
Q7. The process of absorption costing involves
a) Allocation and apportionment
b) Reapportionment of service (non- production) cost centre overheads
c) Absorption of overheads into the product
d) All of the above
(1 mark)
d) All of the above
Q8. Explain the term “standard cost”. (20 words) (3
marks)
Answer: The term standard cost is defined as an estimation of actual cost of a firm’s
manufacturing process. It contributes in preparation of budgets.
3

Total marks: 10
4