140+ Accounting for Management Solved MCQs

1.

…………….is concerned with recording transactions and preparing financial reports for the external and internal users of accounting.

A. management accounting
B. financial accounting
C. cost accounting
D. all of these
Answer» B. financial accounting
2.

The Branch of accounting concerned with collection, determining and controlling cost of products and services is called………………

A. management accounting
B. financial accounting
C. cost accounting
D. all of these
Answer» C. cost accounting
3.

……………is concerned with providing information to management for taking managerial decisions.

A. management accounting
B. financial accounting
C. cost accounting
D. all of these
Answer» A. management accounting
4.

The father of Double Entry system is………………

A. luca pacioli
B. lopus patricia
C. lukas christian
D. none of these
Answer» A. luca pacioli
5.

……………….is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events, which are in part, at least of financial character and interpreting the results there of.

A. management accounting
B. accounting
C. cost accounting
D. all of these
Answer» B. accounting
6.

Which among the following do not belong to the category of Accounting ?

A. management accounting
B. financial accounting
C. cost accounting
D. none of these
Answer» D. none of these
7.

The objective of financial accounting is to find out…………………..

A. profitability and financial position
B. liquidity
C. solvency
D. none
Answer» A. profitability and financial position
8.

……………….journal is used to record credit sale of goods

A. sales journal
B. cash book
C. purchase journal
D. none of these
Answer» A. sales journal
9.

The ………….Management is mainly concerned with the policy decisions.

A. top
B. middle
C. bottom
D. all of these
Answer» A. top
10.

The Prime function of accounting is to ………………………..

A. record economic data
B. provide the informational basis for action
C. classify and record business transactions
D. attain non economic goals
Answer» C. classify and record business transactions
11.

The basic function of Management Accounting is to ……………………….

A. record all business transactions
B. interpret the financial data
C. assist the management in performing its functions effectively
D. none of these
Answer» C. assist the management in performing its functions effectively
12.

Management accounting provides invaluable services to Management in performing…………..

A. all management functions
B. co-ordination functions
C. controlling functions
D. none of these
Answer» A. all management functions
13.

Accounting designed to serve parties external to the operating responsibility of the firm is termed as…………….

A. management accounting
B. financial accounting
C. cost accounting
D. none of these
Answer» B. financial accounting
14.

Cost Accounting and Management Accounting are ……………….. in nature.

A. complementary
B. contradictory
C. different
D. similar
Answer» A. complementary
15.

Management accounting has a ……….. scope than cost accounting.

A. wider
B. narrow
C. no
D. none of these
Answer» A. wider
16.

…………….is the amount of expenditure [actual or notional] incurred on or attributable to a given thing.

A. expenses
B. costing
C. cost
D. none of these
Answer» C. cost
17.

………………..is the technique and process of ascertaining costs

A. cost
B. costing
C. cost accounting
D. none of these
Answer» C. cost accounting
18.

………..is the process of accounting for cost which includes the application of cost control methods and ascertainment of profitability of activities

A. cost
B. costing
C. cost accounting
D. none of these
Answer» C. cost accounting
19.

Which among the following is not a management accounting technique?

A. standard costing
B. marginal costing
C. project appraisal
D. none
Answer» D. none
20.

………..Accounting is concerned with historical data

A. cost accounting
B. management accounting
C. financial accounting
D. none
Answer» C. financial accounting
21.

……………..is the process of identifying the financial strengths and weakness of the firm by properly establishing relationship between the items of balance sheet and Profit and Loss Account

A. financial statements
B. financial analysis
C. trend analysis
D. all of these
Answer» B. financial analysis
22.

……………explains what has happened to a business unit as a result of operations between two balance sheet dates.

A. income statement
B. profit and loss account
C. both of these
D. none
Answer» C. both of these
23.

The analysis done by investors , credit agencies , government agencies and other creditors who have no access to the internal records of a company is known as ……………..

A. internal analysis
B. horizontal analysis
C. external analysis
D. none of these
Answer» C. external analysis
24.

The analysis done by persons who have access to the books of account and other information related to the business is termed as……………

A. internal analysis
B. horizontal analysis
C. external analysis
D. none of these
Answer» A. internal analysis
25.

In ………………..type of analysis , financial statements for a number of years are reviewed and analyzed.

A. internal analysis
B. horizontal analysis
C. external analysis
D. none of these
Answer» B. horizontal analysis
26.

……………..type of analysis is based on the data from year to year rather than on one date, and also termed as dynamic analysis.

A. internal analysis
B. horizontal analysis
C. external analysis
D. none of these
Answer» B. horizontal analysis
27.

………….analysis is useful in comparing performance of several companies in the same group, or division or department of the same company.

A. vertical analysis
B. horizontal analysis
C. external analysis
D. none of these
Answer» A. vertical analysis
28.

………………. are prepared so as to provide time perspective to the consideration of various elements of financial position embodied in such statements.

A. comparative statements
B. common size statements
C. both of these
D. none
Answer» A. comparative statements
29.

……………….are the statements, in which figures reported are converted into percentages to some common base.

A. comparative statements
B. common size statements
C. both of these
D. none
Answer» B. common size statements
30.

The term fixed assets includes

A. stock in trade
B. furniture
C. payments in advance
D. all of these
Answer» B. furniture
31.

The following is a recorded fact

A. market value of investment
B. debtors
C. replacement cost
D. none
Answer» B. debtors
32.

The term current assets does not include

A. payment in advance
B. bills receivable
C. long term deferred charges
D. none of these
Answer» C. long term deferred charges
33.

In case of a limited company, the term financial statements includes………

A. profit and loss account
B. profit and loss account, profit and loss appropriation account and balance sheet
C. balance sheet
D. none
Answer» B. profit and loss account, profit and loss appropriation account and balance sheet
34.

Assets and liabilities in a Balance sheet may be arranged in the order of …..

A. liquidity
B. permanence
C. both of these
D. none of these
Answer» C. both of these
35.

Income statement matches the …………… incurred in the accounting year

A. revenue and costs
B. incomes and expenses
C. both of these
D. none of these
Answer» C. both of these
36.

…………..are statements of financial position at different periods

A. comparative statements
B. common size statements
C. both of these
D. none
Answer» A. comparative statements
37.

An increase in current asset accompanied by the increase in current liabilities of the same amount will…………………

A. improve short term financial position
B. not improve short term financial position
C. improve long term financial position
D. none of these
Answer» B. not improve short term financial position
38.

Which among the following is an example for horizontal analysis ?

A. comparative balance sheet
B. comparative income statement
C. common size statements
D. a & b
Answer» D. a & b
39.

If the Gross sales of a concern is Rs.200000 and sales return is 20000, Gross profit is 150000.cost of goods sold is……………………..

A. 150000
B. 30000
C. 50000
D. none of these
Answer» B. 30000
40.

Given opening stock is Rs.20000, Direct expenses 10000, Closing stock 5000.Cost of goods sold is ……………………

A. 25000
B. 35000
C. 15000
D. 20000
Answer» A. 25000
41.

Ratio of Net sales to Net working capital is a ………………………..

A. working capital turnover ratio
B. profitability ratio
C. liquidity ratio
D. none of these
Answer» A. working capital turnover ratio
42.

Observing changes in financial analysis across the years is ……………

A. vertical analysis
B. horizontal analysis
C. inter firm comparison
D. none of these
Answer» B. horizontal analysis
43.

Ratio of net profit before interest and tax to sales is ……………….

A. operating profit ratio
B. operating ratio
C. capital gearing
D. solvency ratio
Answer» A. operating profit ratio
44.

The statistical yardstick that provides a measure of relationship between two accounting figures is ……………………

A. current ratio
B. the accounting ratio
C. input output ratio
D. none of these
Answer» B. the accounting ratio
45.

……………….is a statement which lists all the sources of funds and applications of funds taken place in a business during a particular period

A. fund flow statement
B. cash flow statement
C. any of these
D. none of these
Answer» A. fund flow statement
46.

The overall net increase or decrease in working capital is found out by preparing…………………

A. fund flow statement
B. cash flow statement
C. statement showing changes in working capital
D. none of these
Answer» C. statement showing changes in working capital
47.

Which one of the following is a source of fund ?

A. issue of shares in consideration of machinery purchased
B. issue of bonus shares
C. issue of right shares
D. issue of shares for cash
Answer» D. issue of shares for cash
48.

Which among the following is a sources of fund ?

A. sale proceeds of fixed assets
B. sale proceeds of long term investments
C. non operating incomes
D. all of these
Answer» D. all of these
49.

Which among the following is an application of fund ?

A. purchase of long term investments
B. redemption of preference shares
C. redemption of debentures
D. all of these
Answer» D. all of these
50.

……………is only internal source of funds

A. fund from operations
B. net profit
C. both of these
D. none of these
Answer» A. fund from operations
51.

Which among the following do not result in the flow of fund /

A. depreciation of fixed assets
B. goodwill written off
C. transfer to general reserve
D. all of these
Answer» D. all of these
52.

Fund flow refers to changes in ------------- capital

A. fixed
B. working
C. both of these
D. none of these
Answer» B. working
53.

Net profit earned plus non working capital expenses is equal to …………..

A. fund provided by operations
B. use of funds
C. sinking fund
D. none of these
Answer» A. fund provided by operations
54.

……………….refers to firms investment in current assets.

A. working capital
B. gross working capital
C. net working capital
D. all of these
Answer» B. gross working capital
55.

……………..means excess of current assets over current liabilities.

A. working capital
B. gross working capital
C. net working capital
D. all of these
Answer» C. net working capital
56.

……………….means cash and other assets which are expected to be sold or consumed during the normal operating cycle of business.

A. liquid assets
B. quick assets
C. cash equivalents
D. current assets
Answer» D. current assets
57.

Which among the following asset is excluded from current assets ?

A. loose tools
B. accounts receivable
C. short term investments with bank
D. finished goods
Answer» A. loose tools
58.

Which transaction results in flow of funds ?

A. transaction involve only fixed assets
B. transaction involve only current assets
C. all of these
D. none of these
Answer» D. none of these
59.

There will be flow of funds, if a transaction involves………………..

A. current assets and fixed assets
B. current assets and capital
C. current assets and fixed liabilities
D. all of these
Answer» D. all of these
60.

The flow of funds occurs when a transaction changes on the one hand a non current account and on the other hand a …………..

A. current asset
B. current liability
C. a or b
D. none of these
Answer» C. a or b
61.

…………….assets are those which in the ordinary course of business can be converted into cash within a short period of time.

A. current
B. non current
C. both of these
D. none of these
Answer» A. current
62.

………..liabilities are those which are intended to be paid in the ordinary course of business within a short period.

A. current
B. non current
C. both of these
D. none of these
Answer» A. current
63.

Goods purchased for cash. This transaction involves…………..

A. flow of fund
B. no flow of fund
C. both of these
D. none of these
Answer» B. no flow of fund
64.

Which among the following transaction involves no flow of fund ?

A. redemption of debentures
B. purchase of fixed assets
C. issue of debentures for cash
D. conversion of debentures into shares.
Answer» D. conversion of debentures into shares.
65.

Which among the following transaction involves flow of fund ?

A. cash paid to creditors
B. payment of bills payable
C. raising of short term loans
D. raising of long term loans
Answer» D. raising of long term loans
66.

While preparing ……………statement, both capital and revenue items are considered.

A. fund flow statement
B. income statement
C. both of these
D. none of these
Answer» A. fund flow statement
67.

……………..is a tool of management for financial analysis and helps in making decisions.

A. fund flow statement
B. balance sheet
C. income statement
D. none of these
Answer» A. fund flow statement
68.

…………statement shows changes in financial position and hence dynamic in nature

A. fund flow statement
B. balance sheet
C. income statement
D. none of these
Answer» A. fund flow statement
69.

Increase in Accounts payable when compared to previous year results in …………….of working capital

A. increase
B. decrease
C. no change
D. none of these
Answer» B. decrease
70.

Decrease in Working capital constitutes …………………

A. source of fund
B. application of funds
C. neither source nor application
D. none of these
Answer» A. source of fund
71.

…………….is the dividend paid to the members of a company during a financial year before the finalization of annual accounts.

A. bonus
B. final dividend
C. interim dividend
D. none of these
Answer» C. interim dividend
72.

Fund lost in operations represent………………..

A. inflow of funds
B. outflow of funds
C. neither inflow nor outflow
D. none of these
Answer» B. outflow of funds
73.

Which of the following results in Increase of working capital ?

A. increase in current assets
B. decrease in current assets
C. increase in current liabilities
D. all of these
Answer» A. increase in current assets
74.

Which among the following results in decrease of working capital ?

A. increase in current liabilities
B. increase in current assets
C. decrease in current liabilities
D. none of these
Answer» A. increase in current liabilities
75.

According to SEBI requirements Cash flow statement is prepared by categorizing cash flows into operating, investing and …………..activities

A. financing
B. routine
C. long term
D. none of these
Answer» A. financing
76.

Cash flow statement is a statement which describes inflows and outflows of……

A. cash
B. cash and cash equivalents
C. working capital
D. all of these
Answer» B. cash and cash equivalents
77.

Cash, according to cash flow statement comprises of ……………

A. liquid cash only
B. cash in hand
C. cash in hand and demand deposits with banks
D. none of these
Answer» C. cash in hand and demand deposits with banks
78.

………are short term , highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

A. cash equivalents
B. short term investments
C. marketable securities
D. all of these
Answer» A. cash equivalents
79.

Flow of cash is said to have taken place when any transactions makes changes in the amount of ………….before happening of the transactions.

A. cash
B. cash equivalents
C. both of these
D. none of these
Answer» C. both of these
80.

Which among the following are examples of cash flow from operating activities ?

A. cash receipts from sale of goods
B. cash receipts from royalties
C. cash payments to suppliers
D. all of these
Answer» D. all of these
81.

Which among the following is not an example of cash flow from operating activities ?

A. cash payments of insurance premiums
B. cash payments of income taxes
C. cash payments to employees
D. cash receipts from disposal of fixed assets
Answer» D. cash receipts from disposal of fixed assets
82.

The essence of marginal costing is that ……………… cost is considered on the whole as separate.

A. fixed
B. variable
C. both of these
D. none of these
Answer» A. fixed
83.

………….cost represents the amount of any given volume of output by which aggregate costs are changed if the volume of output is increased by one unit.

A. variable cost
B. marginal cost
C. fixed cost
D. none of these
Answer» B. marginal cost
84.

………. Is the increase or decrease in total cost which results from producing or selling additional or fewer units of a product or from a change in the method of production or distribution such as the use of improved machinery, addition or exclusion of a product or territory or selection of an additional sales channel.

A. variable cost
B. marginal cost
C. fixed cost
D. none of these
Answer» B. marginal cost
85.

…………cost is defined as the aggregate of variable costs or prime costs plus variable overheads.

A. variable cost
B. marginal cost
C. fixed cost
D. none of these
Answer» B. marginal cost
86.

Marginal costing is a …………… of costing

A. system
B. method
C. technique
D. all of these
Answer» C. technique
87.

Under marginal costing, ……… Costs are regarded as costs of the products.

A. variable costs
B. fixed costs
C. both of these
D. none of these
Answer» A. variable costs
88.

Under marginal costing, …………… costs are treated as period costs and charged to profit and loss account for the period for which they are incurred

A. variable costs
B. fixed costs
C. both of these
D. none of these
Answer» B. fixed costs
89.

Under marginal costing, stocks of finished goods and work-in-process are valued at …………….. costs only

A. variable costs
B. fixed costs
C. marginal cost
D. none of these
Answer» C. marginal cost
90.

………………..is the excess of sales over marginal cost of sales

A. profit
B. margin
C. loss
D. contribution
Answer» D. contribution
91.

………………..cost remains constant per unit of output irrespective of the level of output and thus fluctuates directly in proportion to changes in the volume of output

A. variable costs
B. fixed costs
C. marginal cost
D. none of these
Answer» A. variable costs
92.

…………..costs are the increase or decrease in total cost that result from producing additional or fewer units or from the adoption of an alternative course of action.

A. variable costs
B. fixed costs
C. marginal cost
D. differential cost
Answer» D. differential cost
93.

Marginal cost and differential cost are the same when ……..costs do not change with change in output

A. variable costs
B. fixed costs
C. semi variable cost
D. none of these
Answer» B. fixed costs
94.

………………is the practice of charging all costs, both variable and fixed, to operations, processes, or products

A. marginal costing
B. absorption costing
C. differential costing
D. none of these
Answer» B. absorption costing
95.

In absorption costing, managerial decision making is based upon …………..

A. profit
B. contribution
C. costs
D. none of these
Answer» A. profit
96.

Given sales = 150000, Fixed costs = 30000, Profit = 40000.The variable cost is………….

A. 110000
B. 80000
C. 120000
D. 10000
Answer» B. 80000
97.

The Profit/Volume ratio or marginal ratio expresses the relation of ………… to sales.

A. profit
B. marginal cost
C. contribution
D. none of these
Answer» C. contribution
98.

Which of the following measures helps to increase the P/V Ratio ?

A. increasing the selling price per unit
B. reducing the variable or marginal cost
C. changing the sales mixture
D. all of these
Answer» D. all of these
99.

Given sales = 100000, Profit = 10000 , variable cost = 70%.The sales required to earn a profit of Rs.40000 is ………………………

A. 1500000
B. 100000
C. 200000
D. none of these
Answer» C. 200000
100.

Marginal cost is the ……….cost of producing an additional unit of output

A. variable
B. fixed
C. semi variable
D. none of these
Answer» A. variable
Tags
Question and answers in Accounting for Management, Accounting for Management multiple choice questions and answers, Accounting for Management Important MCQs, Solved MCQs for Accounting for Management, Accounting for Management MCQs with answers PDF download