Correct Answer:
B. Higher
Part of fixed overhead is carried forward in closing inventory under absorption costing, so profit is higher.
November 13, 2026 · Accounting and Finance MCQs, Cost & Management Accounting MCQs
If production exceeds sales in a period, profit under absorption costing compared with variable costing will be:
Related MCQs
Contribution margin is Rs. 120,000 and operating income is Rs. 30,000. The degree of operating leverage is:
A.
0.25
B.
3
C.
90,000
D.
4
Correct answer is:
D. 4
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Vouching, which starts from the accounting records and traces back to supporting documents, is mainly used to test for:
A.
Overstatement (occurrence/existence)
B.
Understatement (completeness)
C.
Classification of liabilities
D.
Going concern doubts
Correct answer is:
A. Overstatement (occurrence/existence)
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Abnormal loss is:
A.
Loss that is part of normal operations
B.
Loss in excess of the normal loss, charged to the costing profit and loss account
C.
Added to the cost of good units
D.
Always recoverable from the supplier
Correct answer is:
B. Loss in excess of the normal loss, charged to the costing profit and loss account
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Under the Constitution of Pakistan, the Auditor-General can be removed from office:
A.
In the like manner and on the like grounds as a judge of the Supreme Court
B.
By any minister
C.
By the Prime Minister alone
D.
By the Chief Secretary
Correct answer is:
A. In the like manner and on the like grounds as a judge of the Supreme Court
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Fund accounting is commonly used in the public sector because:
A.
Government has no assets
B.
All money is treated as one pool
C.
It avoids the need for budgets
D.
Resources are separated into funds according to purposes or legal restrictions
Correct answer is:
D. Resources are separated into funds according to purposes or legal restrictions
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An expansionary fiscal policy involves:
A.
Reducing government spending and raising taxes
B.
Increasing government spending or cutting taxes
C.
Raising interest rates
D.
Selling government bonds only
Correct answer is:
B. Increasing government spending or cutting taxes
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