Question

1. An effective cost control system should include: a. An established plan of objectives and goals to be achieved b. Regular reports showing the difference between goals and actual performance c. Specific assignment of duties and responsibilities d. All of these are correct 2. The personnel involved in the physical control of materials includes all the following except the: a. Purchasing agent b. Receiving clerk c. Cost accountant d. Production department supervisor 3. The form prepared by the purchasing agent and sent to the vendor to obtain materials is known as a a. Materials requisition b. Purchase requisition c. Purchase order d. Vendor's invoice 4. The form that serves as authorization to withdraw materials from the storeroom is known as the: a. Store requisition b. Purchase order c. Purchase requisition d. Returned materials report 5. To effectively control materials, a business must maintain: a. Limited access b. Combination of duties c. Safety stock d. None of these are correct

Answer 1

1 - d

In cost control system, we set some standards by which we can compare the actuals in order to find out how effective we are. Therefore all the 3 options are correct.

2 - c

Cost accountant will not be responsible for phsyical control of materials, he only maintains the accounting records.

3 - c

Purchase order is sent to the vendor to place an order. All the items that are required are mentioned along with the quantities required.

4 - a

Store requisition is also known as material requisition and it authorizes to withdraw materials from the storeroom

5 - a

Limited access is required to effectively control materials. Not everyone should have access to material details, the duties should be segregated.