More MCQs
201.

Quick assets do not include
I)Prepaid Expense
II)Advance Tax
III)Marketable securities
IV)Inventory

A. Only I,II and IV
B. Only III
C. All I,II,III,IV
D. Only II and III
Answer» A. Only I,II and IV
202.

If debt equity ratio exceeds ,it indicates risky position.

A. 1:1
B. 2:1
C. 1:2
D. 3:1
Answer» B. 2:1
203.

Which of these is false?

A. Working Capital=Current Assets-Current Liabilities
B. CL=CA-Working capital
C. Current Liabilities=Workin g capital -CA
D. Current Assets=Working capital+CL
Answer» C. Current Liabilities=Workin g capital -CA
204.

If average T/R are 1,00,000 ,Closing T/R are 3 times that of opening T/R .What is Closing T/R?

A. 200000
B. 75000
C. 150000
D. 50000
Answer» C. 150000
205.

A firm that issues stocks and bonds to raise funds results in in cashflow.

A. Decreased Cash
B. Increased Cash
C. Increased Equity
D. Increased Liabilities
Answer» C. Increased Equity
206.

Which are not Investing activity?
I)Receipts from sale of fixed asset
II)Interest received
III)Dividend paid
IV)Cash Payment to acquire share of other Companies

A. Only II and III
B. Only III and IV
C. Only III
D. All are not investing activities
Answer» C. Only III
207.

Which of the following is not the objective of budgetary control?
I)Control
II)Danger of rigidity
III)Motivation
IV)Based on estimates

A. Only II
B. Only II and IV
C. Only II,III and IV
D. All I,II,III and IV
Answer» B. Only II and IV
208.

Which statement is true.I)Fixed budget assumes Changing business conditions. II)Flexible budget is prepared for only one level of activity.

A. None is true
B. Both are true
C. Only I
D. Only II
Answer» A. None is true
209.

The wages due from Mar 20 ,Apr 20 and May 20 are Rs8000,Rs9000 and Rs 10,000 respectively.There is delay in payment of wages of 2 months.What will be the wages paid in May 20 in the Cash Budget.

A. Rs 9000
B. Rs 8000
C. Rs 10000
D. Rs 27000
Answer» B. Rs 8000
210.

Which of the following is/are the responsibilty centres.
I)Cost centre
II)Investment Centre
III)Profit center
IV)Revenue Centre

A. All
B. Only I,II and III
C. Only I and IV
D. Only II,III and IV
Answer» A. All
211.

Total Actual material is 1250 Kg.The Standard qty of Material A=800Kg and B=400Kg.What is the revised Std qty of A and B respectively.

A. 825kg,425Kg
B. 950Kg,300Kg
C. 833Kg,417Kg
D. 750Kg,500Kg
Answer» C. 833Kg,417Kg
212.

SH=800 Hours,AR=Rs 7 ,SR=6,AH=750 Hours.Calculate labour rate variance(LRV).

A. 750 A
B. 300 F
C. 300 A
D. 750 F
Answer» A. 750 A
213.

Yr 2019 :sales 1,20,000 and Profit8,000 ;Yr 2020:Sales 1,40,000 an profit 13,000.Calculate P/v ratio.

A. 25%
B. 40%
C. 30%
D. 35%
Answer» A. 25%
214.

Calculate Break Even Point in units if Fixed cost is 15,000 ,SP=15 and VC=12

A. 1000 units
B. 1250 units
C. 1500 units
D. 5000 units
Answer» D. 5000 units
215.

Actual Sales=40,000 and Break Even Point =25,000.Calculate Margin of safety(MOS).

A. 65000
B. 15000
C. 40000
D. 25000
Answer» B. 15000
216.

What are the sales required to earn a profit of 12,000 if Fixed cost are 22,000 and P/V ratio is 25%.

A. 136000
B. 40000
C. 8500
D. 2500
Answer» A. 136000
217.

Actual Sales=80,000,P/V ratio=20% and Fixed cost=10,000.Calculate Profit.

A. 16000
B. 3000
C. 5000
D. 6000
Answer» D. 6000
218.

The cost that tends to remain constant irrespective of the level of activity is called _______.

A. Variable cost
B. Fixed cost
C. Total cost
D. All of the above
Answer» B. Fixed cost
219.

Cost Accounting restrict itself with _______ transactions.

A. Financial
B. Spot
C. Historical
D. Administrative
Answer» C. Historical
220.

Following is (are) the method(s) of measuring labour turnover.

A. Replacement Method
B. Separation Method
C. Flux Method
D. All of the above
Answer» D. All of the above
221.

Following is (are) the example(s) of semi-variable overheads.

A. Maintenance cost
B. Electricity
C. Health and Accident Insurance
D. All of the above
Answer» D. All of the above
222.

_________ indicates the financial status of the business at given period.

A. Balance sheet
B. Accounting ledger
C. General ledger
D. All of the above
Answer» A. Balance sheet
223.

In Cash budget, Non operating cash inflow include(s)

A. Receipt of loan/borrowings
B. Issue of shares
C. Sale of fixed assets
D. All of the above
Answer» D. All of the above
224.

Sales Budget is a forecast expressed in -

A. Quantity
B. Money
C. Both (a) and (b)
D. None of the above
Answer» C. Both (a) and (b)
225.

Following is used as tool for Cost Control

A. Marginal cost
B. Historical cost
C. Standard cost
D. All of the above
Answer» C. Standard cost
226.

Management accounting assists the management

A. Only in control
B. Only in direction
C. Only in planning
D. In planning, direction and control
Answer» D. In planning, direction and control
227.

Management accounting is deals with -

A. Quantitative Information
B. Qualitative Information
C. Both (a) and (b)
D. None of the above
Answer» C. Both (a) and (b)
228.

Which of the following is an advantage of standard costing?

A. Measuring efficiency
B. Facilitates cost control
C. Determination of variance
D. All of the above
Answer» D. All of the above
229.

Which of the following is not a functional budget?

A. Labour budget
B. Cash budget
C. Materials budget
D. Expenses budget
Answer» A. Labour budget
230.

Which is the mostly likely purpose of budgeting?

A. Planning and control of an organization's income and expenditure
B. Preparation of a five-year business plan
C. Company valuation
D. Assess the non-financial performance of an organization
Answer» A. Planning and control of an organization's income and expenditure
231.

__________ Accounting becomes a source of information for Management Accounting.

A. Financial
B. Cost
C. Both (a) and (b)
D. None of the above
Answer» C. Both (a) and (b)
232.

Calculate the production budget from the following data: sales 89,350 units; opening inventory 23,864 units; closing inventory 33,156 units.

A. 80,058 units
B. 1,46,370 units
C. 32,320 units
D. 98,642 units
Answer» D. 98,642 units
233.

Fixed budget is useless for comparison when the level of activity -

A. Increases
B. Fluctuates both ways
C. Decreases
D. Constant
Answer» B. Fluctuates both ways
234.

The budget committee consists of -

A. Managers
B. Budget officers
C. Creditors
D. None of the above
Answer» B. Budget officers
235.

A budget centre is -

A. Department or part of the department
B. Meeting place for budget committee
C. Office of the budget officer
D. None of the above
Answer» A. Department or part of the department
236.

The main objective of budgetary control is -

A. To define the goal of the firm
B. To coordinate different departments
C. To plan to achieve its goals
D. All of the above
Answer» C. To plan to achieve its goals
237.

Production budget is -

A. Dependent on purchase budget
B. Dependent on sales budget
C. Dependent on cash budget
D. None of the above
Answer» B. Dependent on sales budget
238.

Sales budget shows the sales details as -

A. Month wise
B. Product wise
C. Area wise
D. All of the above
Answer» D. All of the above
239.

An example of long period budget is -

A. R & D budget
B. Master budget
C. Sales budget
D. Personnel budget
Answer» A. R & D budget
240.

The budgets are classified on the basis of -

A. Time
B. Function
C. Flexibility
D. All of the above
Answer» D. All of the above
241.

Budget relating to the key factor is prepared -

A. After other budgets
B. With other budgets
C. Before other budgets
D. None of the above
Answer» C. Before other budgets
242.

Key factor is also known as -

A. Limiting factor
B. Governing factor
C. Principal factor
D. All of the above
Answer» D. All of the above
243.

In responsibility accounting system -

A. Budgets are prepared
B. Actual performance is recorded
C. The performance is reported
D. All of the above
Answer» D. All of the above
244.

The responsibility accounting emphasizes the performance of -

A. System
B. Men
C. Both (a) and (b)
D. None of these
Answer» B. Men
245.

The responsibility accounting is also called -

A. Profitability accounting
B. Activity accounting
C. Both (a) and (b)
D. None of these
Answer» C. Both (a) and (b)
246.

The responsibility accounting is the part of -

A. Financial accounting
B. Management accounting
C. Mechanized accounting
D. None of these
Answer» B. Management accounting
247.

The responsibility accounting is a controlling tool for -

A. Top‐level management
B. Lower level management
C. Middle level management
D. None of these
Answer» A. Top‐level management
248.

Which of the following system emphasizes on cost control ?

A. Cost accounting
B. Responsibility accounting
C. Financial accounting
D. None of these
Answer» B. Responsibility accounting
249.

The responsibility centres come under the responsibility of -

A. Cost accountants
B. Management accountant
C. Responsibility managers
D. Auditor
Answer» C. Responsibility managers
250.

The subdivision of responsibility centre is -

A. Expense centre
B. Profit centre
C. Investment centre
D. All of the above
Answer» D. All of the above
251.

The accounting department in an organization is -

A. Investment centre
B. Expense centre
C. Profit centre
D. All of the above
Answer» A. Investment centre
252.

What is the main advantage of responsibility accounting ?

A. Improves performance
B. It fixes responsibility
C. Helpful in decision making
D. All of the above
Answer» D. All of the above
253.

The responsibility accounting is a system by which the responsibility is assigned to the concerned persons -

A. To increase sales
B. To control cash
C. To increase production
D. All of the above
Answer» B. To control cash
254.

The contribution of accounting department in an organization -

A. Cannot be measured in monetary terms
B. Can be measured in monetary terms
C. May or may not be measured in monetary terms
D. None of the above
Answer» A. Cannot be measured in monetary terms
255.

According to responsibility accounting, the entire organization is divided into various -

A. Business centre
B. Profit centre
C. Responsibility centre
D. None of the above
Answer» C. Responsibility centre
256.

It may not be ______ to measure exactly the output of service departments in an organization.

A. Feasible
B. Necessary
C. Either (a) or (b)
D. None of these
Answer» C. Either (a) or (b)
257.

Internal transfer of process at profit _________ of the company.

A. Will not increase the asset
B. Will increase the asset
C. Can’t say
D. Inadequate information
Answer» A. Will not increase the asset
258.

The success of budgetary control system depends upon the willing cooperation of ….…

A. Shareholders
B. Management
C. Creditors
D. All the functional areas of management
Answer» D. All the functional areas of management
259.

A key factor is one which restricts ……

A. The volume of production
B. The volume of sales
C. The volume of purchase
D. All of the above
Answer» A. The volume of production
260.

The classification of fixed and variable cost is useful for the preparation of ……

A. Master budget
B. Flexible budget
C. Cash budget
D. Capital budget
Answer» B. Flexible budget
261.

In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ___________.

A. Fixed Cost
B. Variable Cost
C. Total Cost
D. Prime Cost
Answer» B. Variable Cost
262.

__________ is a detailed budget of cash receipts and cash expenditure incorporating both revenue and capital items.

A. Cash Budget
B. Capital Expenditure Budget
C. Sales Budget
D. Overhead Budget
Answer» A. Cash Budget
263.

Sunk costs are __________.

A. Relevant for decision making
B. Not relevant for decision making
C. Cost to be incurred in future
D. Future costs
Answer» B. Not relevant for decision making
264.

Abnormal cost is the cost ___________.

A. Cost normally incurred at a given level of output
B. Cost not normally incurred at a given level of output
C. Cost which is charged to customer
D. Cost which is included in the cost of the product
Answer» B. Cost not normally incurred at a given level of output
265.

Responsibility Centre can be categorised into ___________.

A. Cost Centres only
B. Profit Centres only
C. Investment Centres only
D. All of the above
Answer» D. All of the above
266.

A profit centre is a centre ___________.

A. Where the manager has the responsibility of generating and maximising profits
B. Which is concerned with earning an adequate Return on Investment
C. Both (a) and (b)
D. Which manages cost
Answer» A. Where the manager has the responsibility of generating and maximising profits
267.

Management Accounting is and financial accounting differ in that management accounting information is prepared –

A. Following prescribed rules
B. Using whatever methods the company finds beneficial
C. For shareholders
D. To summarize the whole company with little detail
Answer» B. Using whatever methods the company finds beneficial
268.

Purpose of Management Accounting is to –

A. Past orientation
B. Help banks make decisions
C. Help managers make decisions
D. Help investors make decisions
Answer» C. Help managers make decisions
269.

Management Accounting is the branch of accounting concerned with reporting to –

A. Internal Managers
B. Shareholders
C. The Government
D. Bankers
Answer» A. Internal Managers
270.

Which of the following does NOT describe management accounting?

A. Evaluation of segments or products within the firm
B. Emphasis on the future
C. Externally focused
D. Detailed information
Answer» C. Externally focused
271.

Management accounting reports are prepared

A. To meet the needs of decision makers within the firm
B. Whenever shareholders request them
C. According to guidelines prepared by the shares and Financial Services Authority
D. According to financial accounting standards
Answer» A. To meet the needs of decision makers within the firm
272.

Management accounting is primarily concerned with -

A. Providing investors with useful information for valuing securities.
B. Providing creditors information on the status of their loans.
C. Providing managers with relevant information to help achieve organizational goals.
D. Providing the relevant taxation authorities with information to determine the amount
Answer» C. Providing managers with relevant information to help achieve organizational goals.
273.

Which matters are taken into consideration while preparing production budget ?

A. The estimate of the number of units to be produced during the budget period.
B. Estimate of number of units to be sold.
C. Policy regarding the wage fixation for labourers.
D. Policy regarding the selection of suppliers from whom materials would be purchased.
Answer» A. The estimate of the number of units to be produced during the budget period.
274.

Which of the following matter is to be taken into account which preparing Material Purchase Budget ?

A. The supplier from whom materials are to be purchased.
B. The procedure of storing and preserving materials after they are received.
C. The prices at which receipts and issues of materials are to be recorded in stores ledger.
D. The maximum and minimum quantities of materials to be purchased.
Answer» D. The maximum and minimum quantities of materials to be purchased.
275.

Which of the following matter is relevant with cash receipts and disbursement method of preparing Cash Budget ?

A. While determining the cash payments, it is necessary to estimate the credit sales.
B. While estimating cash receipts, it is not necessary to estimate the figure of credit sales.
C. Debtors Ratio is used to estimate the timings when cash collections would be obtained from credit sales.
D. While estimating the total amount of cash payment for purchases, it is necessary to decide from which suppliers materials are to be purchased.
Answer» C. Debtors Ratio is used to estimate the timings when cash collections would be obtained from credit sales.
276.

Budget period depends upon -

A. The type of budget
B. The nature of business
C. The length of trade cycles
D. All of the above
Answer» D. All of the above
277.

Usually the production budget is stated in terms of -

A. Money
B. Quantity
C. Both (a) and (b)
D. None
Answer» C. Both (a) and (b)
278.

Recording of actual performance is -

A. An advantage of budgetary control
B. A step in budgetary control
C. A limitation of budgetary control
D. None of the above
Answer» B. A step in budgetary control
279.

Budgetary control system helps the management to eliminate -

A. Undercapitalization
B. Overcapitalization
C. Both (a) and (b)
D. None
Answer» C. Both (a) and (b)
280.

Budgetary control facilitates easy introduction of the -

A. Marginal costing
B. Ratio analysis
C. Standard costing
D. Subjective matter
Answer» C. Standard costing
281.

Budgetary control system acts as a friend, philosopher and guide to the -

A. Management
B. Share holders
C. Creditors
D. Employees
Answer» A. Management
282.

Budgetary control system defines the objectives and policies of the -

A. Production department
B. Finance department
C. Marketing department
D. Subjective matter
Answer» D. Subjective matter
283.

A budget is tool which helps the management in planning and control of -

A. All business activities
B. Production activities
C. Purchase activities
D. Sales activities
Answer» A. All business activities
284.

In responsibility centre, the output is called as -

A. Revenue
B. Cost
C. Both (a) and (b)
D. None
Answer» A. Revenue
285.

If the responsibility centre gets more revenue from output, then it is called -

A. Investment centre
B. Cost centre
C. Profit centre
D. Expense centre
Answer» C. Profit centre
286.

Cost Unit is defined as -

A. Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed
B. A location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control.
C. Centres having the responsibility of generating and maximising profits
D. Centres concerned with earning an adequate return on investment
Answer» A. Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed
287.

Fixed cost is a cost -

A. Which changes in total in proportion to changes in output
B. Which is partly fixed and partly variable in relation to output
C. Which do not change in total during a given period despise changes in output
D. Which remains same for each unit of output
Answer» C. Which do not change in total during a given period despise changes in output
288.

Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking. -

A. can not
B. can
C. may or may not
D. must
Answer» A. can not
289.

Element/s of Cost of a product are -

A. Material only
B. Labour only
C. Expenses only
D. Material, Labour and expenses
Answer» D. Material, Labour and expenses
290.

Overhead refers to -

A. Direct or Prime Cost
B. All Indirect costs
C. Only Factory indirect costs
D. Only indirect expenses
Answer» B. All Indirect costs
291.

Which of the following is not a method of cost absorption?

A. Percentage of direct material cost
B. Machine hour rate
C. Labour hour rate
D. Repeated distribution method
Answer» D. Repeated distribution method
292.

A Local Authority is preparing cash Budget for its refuse disposal department. Which of the following items would not be included in the cash budget?

A. Capital cost of a new collection vehicle
B. Depreciation of the machinery
C. Operatives wages
D. Fuel for the collection Vehicles
Answer» B. Depreciation of the machinery
293.

Which of the following characteristics does NOT pertain to management accounting?

A. Provides information and estimates about future activity
B. Generates specific-purpose financial statements and reports
C. Provides financial and operating data multidisciplinary in scope
D. Has externally imposed standards
Answer» D. Has externally imposed standards
294.

A budget which is prepared in a manner so as to give the budgeted cost for any level of activity is known as -

A. Master budget
B. Zero base budget
C. Functional budget
D. Flexible budget
Answer» D. Flexible budget
295.

___________ is a summary of all functional budgets in a capsule form.

A. Functional Budget
B. Master Budget
C. Long Period Budget
D. Flexible Budget
Answer» B. Master Budget
296.

When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the P/V ratio is -

A. 20%
B. 30%
C. 25%
D. 40%
Answer» C. 25%
297.

From following which is not a principle of good reporting ?

A. Simplicity
B. Accountability
C. Promptness
D. Accuracy
Answer» B. Accountability
298.

From day to day operation which report is prepare ?

A. Routine
B. Special
C. Investigative
D. External
Answer» A. Routine
299.

Any special event happen into the business then which report is prepared ?

A. Routine
B. Special
C. External
D. Control
Answer» B. Special
300.

Internal report use for _______________ .

A. Share holders
B. Government
C. Managerial personnel
D. Creditors
Answer» C. Managerial personnel
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