Accounting for Cost Elements – Page 3

MI – Nov 2020 – L1 – SA – Q12 – Accounting for Cost Elements

Identify a factor that is NOT to be considered during stocktaking.

Question

The objective of periodic stocktaking is to find out the physical quantities of all types of stocks at a given date. Which of the following is NOT a factor to be considered during stocktaking?

A. Adequate numbers of staff with clear and precise instructions

B. Period of stock take should not interfere with production

C. Adequate technical assistance should be available to identify materials

D. Great care should be taken to ensure that invalid stock items are not included

E. Quantities of each type of stocks should not be checked against stock records

Answer

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Tags: Inventory, Management Controls, Stocktaking
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2020

MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements

Calculates cash receipts expected over three months, considering credit sales terms and bad debts.

Question

The following information was extracted from the books of LAHA Limited:

Product P (units)	Product Q (units)
November	1,500
December	2,000
January	1,000
February	2,000
March	3,000

Product P is sold for ₦200 per unit, and Product Q for ₦300 per unit. All sales are on credit. 20% of total sales are received in the month of sale, 40% in the following month, and the remaining balance (excluding bad debts) is received at the end of the second month. Bad debts are 2% of total sales and are written off at the end of the second month following sale.

Required:
Calculate the cash receipts expected in January, February, and March. (12 Marks)

Answer

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Tags: Accounts Receivable, Bad Debts, Cash Flow, Cash Receipts, Credit Sales, Sales Revenue
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2015

MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

Question

A company located in Ijora area of Lagos extracted the following figures from its materials analysis sheet:

Date	Transaction	Quantity	Unit price (N)
1st January	Balance b/f	10,000	50
25th January	Receipt	7,000	55
6th February	Issue	14,000	–
3rd March	Receipt	5,000	60
27th March	Receipt	4,500	62
4th June	Issue	7,500	–
24th June	Issue	2,500	–
30th June	Receipt	6,500	65

You are required to record the above transactions in the inventory ledger and determine the value of the inventory balance at the end of June 2015 using:
a. First-in-First-out pricing method. (10 Marks)
b. Weighted average pricing method. (10 Marks)

(Total 20 Marks)

Answer

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Tags: Cost Accounting, FIFO, Inventory Management, Inventory Valuation, Material Analysis, Pricing methods, Weighted Average
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2015

MI – Nov 2015 – L1 – SA – Q8 – Accounting for Cost Elements

Identifies information that is not typically included in a standard store ledger card.

Question

Which of the following information would NOT be contained in a standard store ledger card?
A. Description of the item
B. Minimum inventory level
C. Re-order quantity
D. Supplier’s address
E. Pricing method

Answer

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Tags: Inventory Records, Stock Control, Store Ledger
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2015

MI – Nov 2015 – L1 – SA – Q4 – Accounting for Cost Elements

Identifies a reason why an organization may not hold inventory.

Question

An organisation may NOT hold inventory in order to:
A. Meet regular demands
B. Even out seasonal variation in demand
C. Act as buffer when higher demand is expected
D. Meet technical requirements of a production system
E. Take advantage of bulk purchase discounts

Answer

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Tags: Inventory, Production Systems, Stock Management
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2015

MI – Nov 2015 – L1 – SA – Q3 – Accounting for Cost Elements

Identifies the term related to compensation for employees beyond the regular wage.

Question

Which of the following terms is known as compensation beyond the regular wage?
A. Overtime
B. Incentive
C. Bonus
D. Salaries
E. Leave allowance

Answer

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Tags: Employee Compensation, Incentives, Wages
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2015

MI – Nov 2021 – L1 – SA – Q10 – Accounting for Cost Elements

Identify the correct term for calculating gross pay and associated payments.

Question

The computation of the gross pay for each employee and calculation of payments to be made to employees, government and pension funds is called:

A. Wages control accounting
B. Labour cost accounting
C. Payroll accounting
D. Direct labour accounting
E. Overhead control accounting

Answer

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Tags: Labour Costs, Payroll Accounting, Wages
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2021

MI – Nov 2021 – L1 – SA – Q3 – Accounting for Cost Element

Identify the incorrect method for updating inventory records.

Question

Which of the following is NOT used in updating inventory records?

A. Material requisition notes
B. Material returns note
C. Material invoices
D. Goods received notes
E. Goods returned notes

Answer

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Tags: Inventory, Material Requisition, Records
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2021

MI – May 2022 – L1 – SA – Q7 – Accounting for Cost Elements

Identifying a non-advantage of the Just-in-Time purchasing arrangement.

Question

Which of the following is NOT an advantage of Just-in-Time purchasing arrangement?

A. Reduced investment in raw materials
B. Substantial savings in factory space
C. Low quantity discounts
D. Low investment in work-in-progress
E. Reduction in paperwork

Answer

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Tags: Inventory, Just-in-Time, Purchasing
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2022

MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements

Identify a cost that is not a carrying cost in inventory control from the list provided.

Question

Which of the following is NOT a carrying cost under inventory control?

A. Warehouse rent
B. Insurance cost
C. Stores staffing cost
D. Material handling cost
E. Set up and tooling cost

Answer

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Tags: Carrying Cost, Inventory Control, Management Information Systems
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2022

MI – May 2016 – L1 – SA – Q2 – Accounting for Cost Elements

Identify the item not included in the cost of inventory in storage.

Question

Which ONE of the following is NOT included in the cost of inventory in storage?

A. Direct materials cost
B. Direct labour cost
C. Direct expenses
D. Period cost
E. Production overhead

Answer

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Tags: Inventory Costing, Managerial Accounting, Period Cost
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2016

MI – May 2015 – L1 – SA – Q9 – Accounting for Cost Elements

Identify the factor that does not lead to labour turnover.

Question

Which of the following factors may NOT lead to labour turnover in an organisation?
A. Unsatisfactory working conditions
B. Mid-month salaries
C. Low wages
D. Lack of amenities
E. Lack of job security

Answer

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Tags: Employee Retention, Labour Turnover, Multiple Choice, Objective Question
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2015

MI – May 2015 – L1 – SA – Q6 – Accounting for Cost Elements

Calculate gross pay based on the time saved and premium bonus.

Question

If one employee produces 360kgs, what is his gross pay for the day?
A. N80
B. N100
C. N104
D. N124
E. N180

Answer

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Tags: Gross Pay, Labour Costing, Multiple Choice, Objective Question
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2015

MI – May 2015 – L1 – SA – Q5 – Accounting for Cost Elements

Identify the document required to place an order for stock replenishment.

Question

The document required by the purchase department to enable it to place an order for replenishment of stock is
A. Purchase order
B. Store requisition
C. Proforma invoice
D. Waybill
E. Material usage note

Answer

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Tags: Multiple Choice, Objective Question, Purchasing, Stock Replenishment
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2015

Topic: Accounting for Cost Elements

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MI – Nov 2020 – L1 – SA – Q12 – Accounting for Cost Elements

Identify a factor that is NOT to be considered during stocktaking.

MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements

Calculates cash receipts expected over three months, considering credit sales terms and bad debts.

MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

MI – Nov 2015 – L1 – SA – Q8 – Accounting for Cost Elements

Identifies information that is not typically included in a standard store ledger card.

MI – Nov 2015 – L1 – SA – Q4 – Accounting for Cost Elements

Identifies a reason why an organization may not hold inventory.

MI – Nov 2015 – L1 – SA – Q3 – Accounting for Cost Elements

Identifies the term related to compensation for employees beyond the regular wage.

MI – Nov 2021 – L1 – SA – Q10 – Accounting for Cost Elements

Identify the correct term for calculating gross pay and associated payments.

MI – Nov 2021 – L1 – SA – Q3 – Accounting for Cost Element

Identify the incorrect method for updating inventory records.

MI – May 2022 – L1 – SA – Q7 – Accounting for Cost Elements

Identifying a non-advantage of the Just-in-Time purchasing arrangement.

MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements

Identify a cost that is not a carrying cost in inventory control from the list provided.

MI – May 2016 – L1 – SA – Q2 – Accounting for Cost Elements

Identify the item not included in the cost of inventory in storage.

MI – May 2015 – L1 – SA – Q9 – Accounting for Cost Elements

Identify the factor that does not lead to labour turnover.

MI – May 2015 – L1 – SA – Q6 – Accounting for Cost Elements

Calculate gross pay based on the time saved and premium bonus.

MI – May 2015 – L1 – SA – Q5 – Accounting for Cost Elements

Identify the document required to place an order for stock replenishment.

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MI – Nov 2020 – L1 – SA – Q12 – Accounting for Cost Elements

Identify a factor that is NOT to be considered during stocktaking.

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MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements

Calculates cash receipts expected over three months, considering credit sales terms and bad debts.

You're reporting an error for "MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements"

MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

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MI – Nov 2015 – L1 – SA – Q8 – Accounting for Cost Elements

Identifies information that is not typically included in a standard store ledger card.

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MI – Nov 2015 – L1 – SA – Q4 – Accounting for Cost Elements

Identifies a reason why an organization may not hold inventory.

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MI – Nov 2015 – L1 – SA – Q3 – Accounting for Cost Elements

Identifies the term related to compensation for employees beyond the regular wage.

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MI – Nov 2021 – L1 – SA – Q10 – Accounting for Cost Elements

Identify the correct term for calculating gross pay and associated payments.

You're reporting an error for "MI – Nov 2021 – L1 – SA – Q10 – Accounting for Cost Elements"

MI – Nov 2021 – L1 – SA – Q3 – Accounting for Cost Element

Identify the incorrect method for updating inventory records.

You're reporting an error for "MI – Nov 2021 – L1 – SA – Q3 – Accounting for Cost Element"

MI – May 2022 – L1 – SA – Q7 – Accounting for Cost Elements

Identifying a non-advantage of the Just-in-Time purchasing arrangement.

You're reporting an error for "MI – May 2022 – L1 – SA – Q7 – Accounting for Cost Elements"

MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements

Identify a cost that is not a carrying cost in inventory control from the list provided.

You're reporting an error for "MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements"

MI – May 2016 – L1 – SA – Q2 – Accounting for Cost Elements

Identify the item not included in the cost of inventory in storage.

You're reporting an error for "MI – May 2016 – L1 – SA – Q2 – Accounting for Cost Elements"

MI – May 2015 – L1 – SA – Q9 – Accounting for Cost Elements

Identify the factor that does not lead to labour turnover.

You're reporting an error for "MI – May 2015 – L1 – SA – Q9 – Accounting for Cost Elements"

MI – May 2015 – L1 – SA – Q6 – Accounting for Cost Elements

Calculate gross pay based on the time saved and premium bonus.

You're reporting an error for "MI – May 2015 – L1 – SA – Q6 – Accounting for Cost Elements"

MI – May 2015 – L1 – SA – Q5 – Accounting for Cost Elements

Identify the document required to place an order for stock replenishment.

You're reporting an error for "MI – May 2015 – L1 – SA – Q5 – Accounting for Cost Elements"

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Customer

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