MA Management Accounting Questions and Answers

Which ONE of the following statements is correct?

Which of the following statements about transfer pricing is correct?

Which of the following choices is likely to occur if cellular manufacturing is introduced as a result of a business process re-engineering exercise?

Okram Co produces four products. Data for these are:

ProductABCD

Selling price ($)21015632298

Variable cost per unit ($)13610818751

Fixed costs per unit ($)47367519

Machine hours per unit63.5122.75

Due to a breakdown, machine hours will be limited in the next few weeks, and Okram will only be able to meet market demand for three products.

Based on the decision solely on financial factors, which products should be manufactured?

According to the IASB's Framework for the Preparation and Presentation of Financial Statements, information about the entity's liquidity and solvency is useful for users in predicting

Essen Co’s policy is to value inventory using the periodic weighted average method. When the financial statements were drafted, First-in, First-out (FIFO) was incorrectly used to value the closing inventory. During the period the cost of items held in inventory has fallen.

What is the effect of this error on the valuation of closing inventory and profit?

On 1 December 2009 Reon Co acquired a non-current asset at a cost of $318,000. The purchase was financed through a six year finance lease. Under the lease, an initial payment of $71,000 was made on 1 December 2009. Five further payments of $71,000 are required on 1 December each year, commencing 1 December 2010. Reon uses the sum of digits method to allocate interest to accounting periods.

How should the total lease liability be reported in the statement of financial position at 30 November 2010?

At 1 November 2009 Boho Co’s statement of financial position reported a deferred tax liability of $36,560. At 31 October 2010 the net book value of non-current assets was $135,400 greater than the tax written down value.

The current rate of tax is 22%. It has recently been announced that this will be reduced to 20% during the next financial year.

What should be reported in the statement of comprehensive income for the year to 31 October 2010 in respect of deferred tax?

Consider the following statements:

(i)Users must be able to compare an entity's results to its results in previous years and to the results of other entities. To ascertain this objective, accounting policies must be applied consistently both within the financial statements and from one period to the next. Users must be informed of any changes of accounting policy or accounting estimate and must be able to see the effects of such changes.

(ii)Financial statements must seek to represent faithfully the transactions which have taken place during the year.

What accounting concepts are reflected by the above two statements?