Responsibility Accounting & Transfer Pricing MCQs with Answers

May 26, 2024 Cost & Management Accounting 96 Views

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What is Responsibility Accounting?

Responsibility accounting is a type of management accounting in which a company’s management, budgeting, and internal accounting are all held accountable. The fundamental goal of this accounting is to assist all of a company’s planning, costing, and responsibility centers.

Costs which can be eliminated in whole or in part if a particular business segment is discontinued are called:

Sunk Costs

Opportunity Costs

Avoidable Costs

Irrelevant Cost

Correct! Wrong!

The acceptance of a special order will improve overall net operating income so long as the revenue from the special order exceeds:

the contribution margin on the order

the incremental costs associated with the order

the variable costs associated with the order.

the sunk costs associated with the order.

Correct! Wrong!

Which of the following is not an example of a responsibility center?

Cost center.

Revenue center

Profit center

Contribution center

Correct! Wrong!

Transfer pricing intends to arrive a the arm’s length price, for goods sold or services rendered by:

One segment of an enterprise to another segment of the same enterprise.

One Enterprise to another Enterprise

Both A and B

Neither A nor B

Correct! Wrong!

The Asian Division of a multinational manufacturing organisation would likely be classified as a:

Cost center.

Revenue center

Profit center

Investment center

Correct! Wrong!

If one of the segment of an enterprise claims tax holiday , the purpose of transfer pricing is to ensure that the profit such segment is not :

Overstated

Understated

A or B

Neither A nor B

Correct! Wrong!

The purpose of transfer pricing was to ensure that the expenses of a tax holiday segment are not ……………………. and transferred to non-tax holiday unit :

Overstated

Understated

A or B

Neither A nor B

Correct! Wrong!

Transfer Price means the price, which is charged between :

Two or more entities of a MNE [Associated Enterprises (AE’ s)] operating in one country

Two or more entities of a MNE [Associated Enterprises (AE’ s)] operating in different countries

Both A and B

Neither A nor B

Correct! Wrong!

Transfer pricing is, arriving at of the price for goods and services, which are transacted between:

Controlled legal entities within an enterprise

Independent entities within an enterprise

Both A and B

Neither A nor B

Correct! Wrong!

Which of the following is not a common goal of an organisation?

achieving strategic goals

measuring financial performance

Correct! Wrong!

In centralised organisations, primary decisions are made by ________.

an individual at the top of the organisation

various managers throughout the organisation

outside consultants

low-level management

Correct! Wrong!

Strategic decisions occur ________.

frequently and involve immediate decisions

frequently and involve long-term decisions

infrequently and involve long-term decisions

infrequently and involve immediate decisions

Correct! Wrong!

Organizational charts ________.

list the salaries of all employees

outline the strategic goals of the organization

show the structure of an organization

help management measure financial performance

Correct! Wrong!

Managers in decentralized organizations make decisions relating to all of the following except ________.

the company’s stock price

equipment purchases

personnel

prices to charge customers

Correct! Wrong!

A system that establishes financial accountability for operating segments within an organization is called ________.

a financial statement

an internal control system

responsibility accounting

centralization

Correct! Wrong!

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Responsibility Accounting & Transfer Pricing MCQs with Answers

What is Responsibility Accounting?

Costs which can be eliminated in whole or in part if a particular business segment is discontinued are called:

The acceptance of a special order will improve overall net operating income so long as the revenue from the special order exceeds:

Which of the following is not an example of a responsibility center?

Transfer pricing intends to arrive a the arm’s length price, for goods sold or services rendered by:

The Asian Division of a multinational manufacturing organisation would likely be classified as a:

If one of the segment of an enterprise claims tax holiday , the purpose of transfer pricing is to ensure that the profit such segment is not :

The purpose of transfer pricing was to ensure that the expenses of a tax holiday segment are not ……………………. and transferred to non-tax holiday unit :

Transfer Price means the price, which is charged between :

Transfer pricing is, arriving at of the price for goods and services, which are transacted between:

Which of the following is not a common goal of an organisation?

In centralised organisations, primary decisions are made by ________.

Strategic decisions occur ________.

Organizational charts ________.

Managers in decentralized organizations make decisions relating to all of the following except ________.

A system that establishes financial accountability for operating segments within an organization is called ________.

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