The 'Throughput Accounting' emphasises: MCQ with Answer and Explanation

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The 'Throughput Accounting' emphasises:

A. Maximising throughput (sales minus material cost) while minimising operating expenses and inventory

B. Reducing labour cost

C. Increasing fixed cost

D. Maximising production volume

Answer: Option A

Solution (By JKSSB Mock Tests)

Throughput accounting is based on the Theory of Constraints.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

Which of the following is a direct income?

A. Interest on investment

B. Sale of scrap

C. Commission received

D. Discount received

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Correct Answer: Option B

Explanation:
Sale of scrap is directly related to production, thus a direct income credited to Trading Account. Discount, commission, interest are indirect.

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Question #2

In 'Process Costing', normal loss is:

A. Shown as an asset

B. Valued at scrap value, and cost per unit is adjusted

C. Valued at cost per unit and debited to Profit & Loss Account

D. Not recorded separately; its cost is absorbed by good units

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Correct Answer: Option B

Explanation:
Normal loss is expected; its scrap value, if any, reduces the cost of good units. The loss quantity is deducted, and cost per unit is computed on input minus normal loss.

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Question #3

If rent paid is Rs 10,000 and prepaid rent at year-end is Rs 2,000, what is the rent expense for the current year under accrual accounting?

A. Rs 2,000

B. Rs 10,000

C. Rs 12,000

D. Rs 8,000

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Correct Answer: Option D

Explanation:
Current year expense = Paid amount - Prepaid for next year = 10,000 - 2,000 = Rs 8,000.

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