1) Management accounting is
A) Subjective
B) Objective
a. Only A
b. Only B
c. Both A and B
d. None of the above
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2) The assessment of financial statements by a shareholder is an example of
a. Vertical Analysis
b. Horizontal Analysis
c. Internal Analysis
d. External Analysis
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3) Trend percentages and trend ratios are used in
a. Static Analysis
b. Dynamic Analysis
c. Horizontal Analysis
d. Vertical Analysis
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4) If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be:
a. 10% per annum
b. 10.10% per annum
c. 10.25% per annum
d. 10.38% per annum
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5) Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one:
a. Effective rate > Nominal rate
b. Effective rate < Nominal rate
c. Effective rate = Nominal rate
d. None of the above
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6) Liquidity ratios are expressed in
a. Pure ratio form
b. Percentage
c. Rate or time
d. None of the above
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7) Which of the following statements are true about Ratio Analysis?
A) Ratio analysis is useful in financial analysis.
B) Ratio analysis is helpful in communication and coordination.
C) Ratio Analysis is not helpful in identifying weak spots of the business.
D) Ratio Analysis is helpful in financial planning and forecasting.
a. A, B and D
b. A, C and D
c. A, B and C
d. A, B, C, D
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8) The ratio analysis is helpful to management in taking several decisions, but as a mechanical substitute for judgment and thinking, it is worse than useless.
a. True
b. False
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9) Which of the following are examples of Funds Flow Statement?
A) Collection of debtors
B) Shares issued for cash
C) Shares issued against the purchase of machinery
D) Shares issued for property
a. A and B
b. A and C
c. A and D
d. A, B, C and D
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10) Which of the following statements are true about movement of funds?
A) Funds flow in a transaction between current assets and fixed assets.
B) Funds flow in a transaction between current asset and capital.
C) Funds flow in a transaction between fixed assets and current liabilities.
D) Funds flow in a transaction between current liabilities and capital.
a. A and B
b. A and C
c. A and D
d. A, B, C and D
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11) In cash flow statement, the item of interest is shown in
A) Operating Activities
B) Financing Activities
C) Investing Activities
a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C
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12) Cash Flow Statement is based upon
a. Cash basis of accounting
b. Accrual basis of accounting
c. Credit basis of accounting
d. None of the above
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13) Which of the following statements are false?
A) Cash Flow Statement is helpful in the formation of policies.
B) Cash Flow Statement is useful for external analysis.
C) Cash Flow Statement is helpful in estimating future cash flow.
a. Both A and B
b. Both A and C
c. Both B and C
d. None of the above
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14) All factory costs are treated as _______ while all administration costs are treated as ________.
a. Product costs, Period costs
b. Period Costs, Product costs
c. Fixed costs, Period costs
d. Period costs, fixed costs
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15) While ascertaining gross profit under absorption costing, only that portion of manufacturing overheads is deducted from sales revenue which is associated with the goods sold.
a. True
b. False
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16) Under absorption costing among fixed expenses
a. Fixed manufacturing expenses are included in unit cost
b. Fixed non-manufacturing expenses are included in unit cost
c. Both a and b
d. None of the above
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Answer
Explanation
Related Ques
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ANSWER: Fixed manufacturing expenses are included in unit cost
Explanation:
No explanation is available for this question!
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17) A component is being made with the help of a machine. 10,000 units are made at a cost of Rs 10 per unit (of which Rs 9 are variable). The same component can be bought from the market at Rs 9.50 per unit. However, the owner intends to rent the machine for Rs 6,000 following which he will buy components from market. If he does so, what will be the impact?
a. Savings of Rs 1,000
b. Loss of Rs 1,000
c. No Change
d. None of the above
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18) A company is producing product T on a machine. The selling price of T is Rs 100, marginal cost is Rs 60 and machine takes 20 hours to produce T. The company uses a component H which can be made on same machine in 3 hours for a marginal cost of Rs 5. Component can also be bought from the market for Rs 10. What will be the final result if the company decides to by component H from market? (Machine is fully utilized)
a. Savings of Rs 1
b. Loss of Rs 5
c. Loss of Rs 1
d. Savings of Rs 5
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19) As per J.M. Clark, when a decision has to be made involving _________, the difference in cost between two policies may be considered to be the cost really incurred on account of these n-units of business.
a. An increase of n-units of output
b. A decrease of n-units of output
c. An increase or decrease of n-units of output
d. None of the above
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20) Break-even analysis is used in “Make or Buy” decision.
a. True
b. False
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21) Using equation method, Break-even point is calculated as
a. Sales = Variable expenses + Fixed expenses + Profit
b. Sales = Variable expenses + Fixed expenses - Profit
c. Sales = Variable expenses - Fixed expenses + Profit
d. None of the above
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Answer
Explanation
Related Ques
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ANSWER: Sales = Variable expenses + Fixed expenses + Profit
Explanation:
No explanation is available for this question!
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22) Given selling price is Rs 10 per unit, variable cost is Rs 6 per unit and fixed cost is Rs 5,000. What is break-even point?
a. 500 units
b. 1,000 units
c. 1,250 units
d. None of the above
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23) Contribution is also known as
a. Contribution margin
b. Net Margin
c. Both a and b
d. None of the above
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24) Given selling price is RS 20 per unit, variable cost is Rs 16 per unit contribution is
a. Rs 1.25 per unit
b. Rs 4 per unit
c. Rs 0.8 per unit
d. None of the above
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25) Standard Costing is more widely applied in job order industries and not suitable for engineering industries.
a. True
b. False
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26) Which of the following statements are true about Standard Costing?
A) It controls certain elements of cost affecting production and sales.
B) It creates cost consciousness among workers.
C) It plays no role in forecast of production cost, profit and sales.
D) It follows principle of management by exception at operational level.
a. A and B
b. B and C
c. A and D
d. B and D
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27) As per J. Batty, Standard Cost represents ______under given conditions.
a. Anticipated costs
b. Current costs
c. Historical costs
d. None of the above
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28) In forecast, there is a promise or commitment to achieve estimates.
a. True
b. False
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29) Which of the following are not the objectives of Budgeting?
A) To express the objectives of the firms in qualitative terms.
B) To prepare base for evaluation of work performance.
C) To co-ordinate organizational and managerial units of the firm.
D) To develop a strong appraisal of objectives and policies of firm.
a. A, B and C
b. B, C and D
c. D, C and A
d. None of the above
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30) The process of budgeting does not establish a system of decentralization of authority.
a. True
b. False
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31) Cash budget is more helpful in those business concerns where there are
a. No seasonal fluctuations
b. Wide seasonal fluctuations
c. Rare seasonal fluctuations
d. All of the above
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32) While preparing a cash budget the focus should be on
a. Sources of cash inflow during a particular period
b. Amount of cash to be received from cash inflow sources
c. Timing of cash inflow
d. All of the above
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33) Flexible budget is that budget which presents __________ at various levels of business activity.
a. Costs
b. Revenues
c. Profits
d. All of the above
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34) Flexible budget is also known as
a. Sliding scale budget
b. Dynamic budget
c. Both a and b
d. None of the above
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35) When the actual cost is less than the standard cost, the difference is termed as
a. Favorable variance
b. Adverse variance
c. Both a and b
d. None of the above
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36) The controllable variances are related with the
a. Internal and external policies of organization
b. External policies of organization
c. Internal polices of organization
d. None of the above
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37) The events like government policies, price rise etc have an impact on controllable variances.
a. True
b. False
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38) Management audit is useful for
a. Suggestion for targets
b. Assistance to management
c. Good staff relationship
d. All of the above
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39) Responsibility Accounting is also known as
a. Profitability accounting
b. Activity accounting
c. Both a and b
d. None of the above
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40) Internal reporting provides financial statement and annual accounts.
a. True
b. False
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