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190+ Accounting for Managerial Decisions Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .

1.

Horizontal Analysis shows the comparison of data for several years against a chosen ---------------- year.

A. Base year
B. Previous year
C. Financial year
D. Calender year
Answer» A. Base year
2.

Vertical analysis is made to review and analyse the financial statements of -----------------accounting period.

A. One
B. Two
C. Three
D. Four
Answer» A. One
3.

Comparison of financial variables of a firm over a period of time is known as--------------

A. Comparative
B. Common-size
C. Trend analysis
D. None of the above
Answer» C. Trend analysis
4.

Interpretation requires analysis and ----------------------------------

A. Comaprison
B. Determination
C. Decision Making
D. Conclusion
Answer» A. Comaprison
5.

The process of deriving conclusions from the analysis is commonly termed as ----------------

A. Analysis
B. Conclusion
C. Comparison
D. Interpretation
Answer» D. Interpretation
6.

Common size Income Statement present the various items as a percentage of ----------------

A. Sales
B. Credit sales
C. Cash sales
D. None of the above
Answer» A. Sales
7.

External analysis is based on ------------- financial statements

A. Annual
B. Published
C. Prepared
D. Previous
Answer» B. Published
8.

Financial Statements provide a summary of --------------------------

A. Accounts
B. Assets
C. Liabilities
D. Expenses
Answer» A. Accounts
9.

When financial statements for a number of years are reviewed and analysed, the analysis is known as ---------------------

A. Vertical nalysis
B. Internal analysis
C. Horizontal analysis
D. External analysis
Answer» C. Horizontal analysis
10.

When ratios are calculated from the financial statements of one year, it is known as ---------------------

A. Horizontal analysis
B. Vertiacal analysis
C. Internal Analysis
D. External analysis
Answer» B. Vertiacal analysis
11.

Horizontal analysis is also known as -----------------------

A. Static analysis
B. Structural analysis
C. Dynamic analysis
D. None of these
Answer» C. Dynamic analysis
12.

Trend analysis is significant for

A. Forecasting and budgeting
B. Profit planning
C. Capital rationing
D. None of the above
Answer» A. Forecasting and budgeting
13.

In trend percentage the base year is ----------------------------

A. The first year
B. Last year
C. Any year
D. Second year
Answer» A. The first year
14.

Comparative statements are a form of ---------------------------

A. Horizontal analysis
B. Vertical analysis
C. Parellel analysis
D. None of the above
Answer» A. Horizontal analysis
15.

The term financial ananlysis include both --------- and interpretation

A. Comparison
B. Analysis
C. Conclusion
D. Constructions
Answer» B. Analysis
16.

Vertical analysis is also known as ------------------

A. Dynamic analysis
B. Static analysis
C. External nalysis
D. Internal analysis
Answer» B. Static analysis
17.

The statement prepared to disclose accounting information are known as-----

A. Comparative statements
B. Common size statements
C. Financial statements
D. None of the above
Answer» C. Financial statements
18.

------------- gives a diagnosis of the profitability and financial position

A. Analysis of financial statements
B. Preparation of financial statements
C. Construction of statements
D. None of the above
Answer» A. Analysis of financial statements
19.

------------------------ helps in drawing inferences of conclusions

A. Analysis
B. Interpretation
C. Comparison
D. None of the above
Answer» B. Interpretation
20.

---------------- establishes the relationship of different individual items which same common items

A. Common size statements
B. Comparative statements
C. Trend analysis
D. Comparative Income Statement
Answer» A. Common size statements
21.

Under ------------------------ each item of expenses taken as a percentage on net sales

A. Comparative income statement
B. Comparative balance sheet
C. Common size Balance sheet
D. Common size Income Statement
Answer» D. Common size Income Statement
22.

----------- helps to disclose financial position

A. Trial Balance
B. Profit and Loss Account
C. Balance sheet
D. Income Statement
Answer» C. Balance sheet
23.

Disclose accounting information

A. Balance sheet
B. Trading account
C. Profit and Loss Account
D. Financial statements
Answer» D. Financial statements
24.

Afford full diagnosis of the profitability and financial position

A. Preparation of Profit and Loss Account
B. Balance Sheet
C. Final Accounts
D. Analysis of financial statements
Answer» D. Analysis of financial statements
25.

Study of the trend of the same items of two or more balance sheets

A. Common size Profit and Loss A/C
B. Common size balance sheet
C. Comparative Income statement
D. Comparative Balance Sheet
Answer» D. Comparative Balance Sheet
26.

Expressed as a percentage of each asset to total

A. Common size P/L A/C
B. Common size Balance Sheet
C. Comparative Income Statement
D. Trend analysis
Answer» B. Common size Balance Sheet
27.

Ratios of different items for various periods are calculated and compared

A. Common size
B. Comparative
C. Trend analysis
D. Ratio analysis
Answer» D. Ratio analysis
28.

Yard stick which measures relationship between two variables

A. Financial statements
B. Ratio
C. Fund Flow analysis
D. Cash flow analysis
Answer» B. Ratio
29.

The ratio which depicts the relationship between two items,one of which is drawn from the Balance Sheet and the other from the revenue account

A. Current ratio
B. Equity Ratio
C. Net Profit ratio
D. Debtors Turn over Ratio
Answer» D. Debtors Turn over Ratio
30.

The ratio of liquid asset to current liabilities

A. Quick ratio
B. Current ratio
C. Absolute liquid ratio
D. Combined ratio
Answer» A. Quick ratio
31.

Equity includes --------------

A. Equity share capital
B. Equity share capital+Preference share capital+-fictitious asset
C. Equity capital+Prefernce share capital+reserves snd surplus-fictious asset
D. Equity capital+Preference share capital
Answer» C. Equity capital+Prefernce share capital+reserves snd surplus-fictious asset
32.

The ratio which shows the relationship b/w share holder’s fund and total assets

A. Debit equity ratio
B. Proprietary ratio
C. Solvency ratio
D. Fixed asset
Answer» B. Proprietary ratio
33.

Long term solvency of a firm can be measured by

A. Current ratio
B. Net profit ratio
C. Gross profit ratio
D. Debt equity ratio
Answer» D. Debt equity ratio
34.

The ratio that shows the relationship between fixed asset to share holders fund

A. Fixed asset to net worth
B. Fixed asset ratio
C. Fixed assets turn over ratio
D. Net worth ratio
Answer» A. Fixed asset to net worth
35.

The index of efficiency and profitability of the business

A. Operating ratio
B. Operating profit ratio
C. Expense ratio
D. Net profit ratio
Answer» D. Net profit ratio
36.

The ratio that includes whether investment in inventory is efficiently used or not

A. Inventory turnover ratio
B. Working capital turn over ratio
C. Fixed asset turn over ratio
D. Activity ratio
Answer» A. Inventory turnover ratio
37.

Comparison and interpretation of ratio is known as ---------------------

A. Fund flow analysis
B. Cash flow analysis
C. Ratio analysis
D. Trend analysis
Answer» C. Ratio analysis
38.

Powerful tool for analyzing financial statement is ----------

A. Trend analysis
B. Ratio analysis
C. Analysis
D. Interpretation
Answer» B. Ratio analysis
39.

The relationship between two amount or variables is measured with the help of ------------

A. Ratio
B. Trend
C. Comparative
D. Common size
Answer» A. Ratio
40.

The main aim of the ratio analysis is to help the ----------of the firm

A. Owners
B. Officials
C. Departments
D. Management
Answer» D. Management
41.

Ratios indicate trends in important items and this helps in -----------

A. Forecasting
B. Reporting
C. Analyzing
D. Interpreting
Answer» A. Forecasting
42.

Ratios help the management in evolving market strategies through -----------

A. Inter firm comparison
B. Intra firm comparison
C. Ratios
D. None of the above
Answer» A. Inter firm comparison
43.

Ratios may be used as a measure of -------------

A. Effiency
B. Solvency
C. Profitability
D. None of the above
Answer» A. Effiency
44.

An example of Balance Sheet ratio is ---------------

A. Net profit ratio
B. Inventory turn over ratio
C. Current ratio
D. Fixed asset turn over ratio
Answer» C. Current ratio
45.

Income statement ratios are also called -----------

A. Operating ratio
B. Liquidity ratio
C. Activity ratio
D. Trend ratio
Answer» A. Operating ratio
46.

Leverage ratios are also known as -------------- ratios

A. Short term solvency ratios
B. Long term solvency ratios
C. Solvency ratio
D. Liquidity ratio
Answer» B. Long term solvency ratios
47.

The ratios that shows tha capacity of the business unit to meet its short term obligation out of its short term resources is known as --------------

A. Solvency ratio
B. Leverage ratio
C. Liquidity ratio
D. Trend Ratio
Answer» C. Liquidity ratio
48.

The ratio that highlight the end result of business activities are known as ---------------- ratios

A. Liquidity
B. Leverage
C. Activity
D. Profitability
Answer» D. Profitability
49.

The efficiency of the management can be measured with the help of ------------------

A. Activity ratio
B. Leverage ratio
C. Liquidity ratio
D. Profitability ratio
Answer» A. Activity ratio
50.

The ratio of current asset to currnt liability is known as --------------

A. Liquid ratio
B. Current ratio
C. Absolute liquid ratio
D. Turn over ratio
Answer» B. Current ratio

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