Question 1

The use of management accounting is

Question 2
Management accounting assists the management
In planning, direction and control
Only in control
Only in direction
Only in planning

Question 3
Management accountancy is a structure for
Accounting
Costing
Decision making
Management

Question 4
Who coined the concept of management accounting?
American Accounting Association
J. Batty
James H. Bliss
R.N Anthony

Question 5
What is the main objective of management accounting?
To check and maintain accounting records
To identify and analyse the result of business operations.
To remind the amount due to customers
To study business transactions

Question 6
The accounting data are analysed and evaluated with the help of _______
Auditory
Methods
Statutory forms
Tools and techniques

Question 7
Management accounting deals with managing_______
Decision making
Final accounts preparation
Raising finance
Tax returns

Question 8
_____ is the basic function of management accounting.
To manage the performance of the financial function
To serve government
To serve public
To serve public as well as government

Question 9
Only quantitative information is recorded in management accounting.
 False
True

Question 10
Financial Accounting is governed by statutory framework.
False
True

Question 1
The main purpose of Financial Accounting is?
To Provide financial information to shareholders
To keep track of liabilities
To maintain balance sheet
To minimize taxes.

Question 2
The kind of debts which are needed to be repaid in a short term is known
as?
Current Liabilities
Depreciating Assets
Fixed Liabilities
Intangible Assets

Question 3
Which of the following do not have any physical existence?
Current Assets
Current Liabilities
Intangible Assets
Tangible Assets
Question 4
What is Current Liability?
A potential liability that may occur in the future.
Assets of a company that are expected to be sold or used as a result of standard
business operations over the next year.
Company's short-term financial obligations that are due within one year or within a
normal operating cycle.
Obligations listed on the balance sheet not due for more than a year.

Question 5
What are Liabilities?
Expenses of a Company
Income of a Company
Obligations of a Company
Resources of a Company

Question 6
When company can not pay its dues it is said to be____________
Bad debts
Creditors
Fraudulent
Insolvent

Question 7
Basic function of Financial Accounting is to _____________.
For analysis
Match the debit side and credit side
Provide information
Record the transactions of the business

Question 8
______ bill of exchange raised by supplier on our company and accepted by
us for the amount due to him.
Bills Payable
Bills Receivables
Creditors
Debtors

Question 9
Business is human activity directed towards providing or acquiring wealth
through buying & selling of goods.
False
True

Question 10
Current liabilities must be paid within one year.
False
True

Question 1
Which of the following items would not fall under the definition of an
asset?
Land
Machine
Cash
Owner's Equity

Question 2
Trial balance is used to check the accuracy of:
Balance sheet balances
Ledger accounts balances
Cash flow statement balances
Income statement balances

Question 3
The return of goods by the customer should be debited to
Customer a/c
Sales return a/c
Goods a/c
Purchase return a/c

Question 4
Furniture purchased by cheque
Expenses of Co.
One asset increase and other asset decrease
One asset increase
Income of Co.

Question 5
Effect of this transaction: When asset is purchase against cheque:
Debit asset A/C and credit bank A/C
Debit purchase A/C and credit bank A/C
Debit expenses A/C
Debit asset A/C and credit bank A/C

Question 6
Accounting equation may not hold for every transaction
True
False

Question 7
Every company has to maintain journal for financial discipline
True
False

Question 8
Return inward book records purchase returns
True
False

Question 9
Opening balance of asset A/c is always a _______________ balance.
Debit
Credit
Overdraft
Cash Payment

Question 10
Purchase A/c is always _______and sales A/c is always _________.
Debited, Credited
Credited, Debited
Inward, Outward
Outward, Inward
Question 1
As per company's Act all companies must maintain their accounts on basis
of
Accrual method
Accrual and Double entry
Double entry
No one of above

Question 2
Books of Accounts of company should be kept at
Any of the offices of Co
Head office
Registered office
Registered office or any other place decided by board

Question 3
Shareholders of Co.
Can inspect books of A/c of company
Cannot inspect books of A/c of Co.
Can inspect books of A/cs if authorized by A.G.M.
Can inspect books of A/cs if authorized by Articles of Co.

Question 4
Financial statements of company must be authenticated by
All directors
Any 2 directors
M.D. + Other director + Manager or company secretary
Chairman of Co.
Question 5
Maximum period for financial year of company as per Company Act 1956
was _______.
18 Months
15 Months
16 Months
12 Months

Question 6
Company should include only Income statement and Balance sheet in its
financial statements
True
False

Question 7
Company can prepare its financial accounts after every 2 years
True
False

Question 8
Auditor's Report is a part of Annual Report
True
False

Question 9
Shareholders can impact books of accounts only if authorized by ______.
Memorandum of Association
Management
Articles of Association
Company

Question 10
Annual accounts must be approved by______________.
Owner
The Board Of directors
Management
Finance Manager

Question 1
Trial balance is used to check the accuracy of:
Balance sheet balances
Cash flow statement balances
Income statement balances
Ledger accounts balances

Question 2
Effect of this transaction: When asset is purchased against cheque:
Debit asset A/C
Debit asset A/C and credit bank A/C
Debit expenses A/C
Debit purchase A/C and credit bank A/C

Question 3
Which of the following is NOT an important aspect of cost accounting?
Cost allocation
Cost measurement
Cost reduction
Revenue recognition
Question 4
Which of the following is a direct cost component?
Administrative salaries
Indirect labor
Raw materials
Rent for the production facility

Question 5
Direct materials and direct labor are examples of:
Fixed costs
Mixed costs
Step costs
Variable costs

Question 6
Which document provides a detailed breakdown of various costs and
expenses for a specific accounting period?
Balance sheet
Cash flow statement
Cost sheet
Income statement

Question 7
Which of the following cost is also known as overhead cost or on cost?
Cost of direct labour
Cost of direct material
Direct expenses
Indirect expenses

Question 8
Financial accounting primarily focuses on _________.
Analyzing market trends
Estimating future costs
Providing information for internal decision-making
Recording and reporting past financial transactions

Question 9
A decision center responsible for generating revenue and incurring costs
is known as a ________.
Cost center
Investment center
Profit center
Revenue center

Question 10
The classification of costs based on traceability to a specific cost object is
known as_________.
Behavior-based cost
Function-based cost
Value-based cost
Direct and indirect cost

Question 1
Cost accounting is most useful for reporting financial performance.
False
True

Question 2
The primary focus of cost variance analysis is to identify the causes of
deviations from the budget.
 False
True

Question 3
Which document serves as evidence of goods received from the supplier?
Goods receipt note
Invoice
Payment voucher
Purchase order

Question 4
What does "ABC" represent in ABC analysis of inventory?
Activity-Based Costing
All Basic Categories
Always Best Calculation
Average Balance Control

Question 5
Which method of pricing material issues assumes that the first items
received are the first ones consumed?
First-In-First-Out (FIFO)
Last-In-First-Out (LIFO)
Specific Identification
Weighted Average

Question 6
What does the Economic Order Quantity (EOQ) help in determining?
Actual order quantity
Maximum order quantity
Minimum order quantity
Optimal order quantity

Question 7
What is the primary goal of material stock control?
Ensures adequate supply of materials as and when required
Maintain zero inventory
Maximize material purchases
Minimize material receipt errors

Question 8
_____________ indicates the quantity below which the stock should not be
allowed to fall.
Danger level
Maximum level
Minimum Inventory Level
Zero level

Question 9
______________ represents upper stock limit.
Average stock level
Maximum level
Minimum level
Reorder level

Question 10
Cost of carrying inventory includes __________.
Cost of receiving goods
Loss of future sale
Storage cost
Transport cost

Question 1
Purchase function ensures that right quantity of material is available at
right time and right cost.
False
True

Question 2
Reorder level is a level at which new order should be raised.
False
True

Question 3
What are overheads in accounting?
Direct costs
Fixed costs
Indirect costs
Variable costs

Question 4
Absorption costing is used for:
Calculation of gross and net profit
Price determination on basis of full cost
Solution of separation of costs
To absorb the costs incurred on a product.

Question 5
What is the process of distributing overheads to various cost centers
called?
Absorption
Allocation
Apportionment
Distribution

Question 6
What is the purpose of apportioning overhead costs?
Distribution of overheads in proportion to different departments
To absorb into finished goods
To distribute to all products
To eliminate variable costs

Question 7
What does the absorption of overheads involve?
Allocating overheads
Apportioning overheads
Distributing overheads
Charging of overheads to individual products or jobs

Question 8
___________ does not change with changes in production levels.
Direct overheads
Fixed overheads
Semi-variable overheads
Variable overheads

Question 9
___________ means division of overheads among two or more cost centers or
departments using appropriate base.
Absorption
Allocation
Apportionment
Distribution

Question 10
______________rates are determined in advance to be applied in future
periods for product costing.
Allocating overhead
Apportioning overheads
Distributing overheads
Predetermined Overhead
Question 1
Not always overheads are absorbed to products or services produced by
company using appropriate absorption rate.
False
True

Question 2
When expense is for specific product it is called chargeable expense but
when it is for all product it is treated as overheads.
False
True

Question 3
What is marginal costing in managerial accounting?
Fixed costs of production
Semi-variable costs in production
The increase or decrease in total cost when there is increase or decrease in
production by one unit.
Total costs cost of production

Question 4
What is the point at which total revenue equals total costs, resulting in no
profit or loss?
Break-even point
Equilibrium point
Margin of safety point
Maximum profit point

Question 5
What does the Margin of Safety (MOS) indicate in break-even analysis?
Excess production
Maximum allowable overhead
Potential loss at zero production
Profit earned above the break-even point

Question 6
What does the P/V Ratio (Profit-Volume Ratio) represent in cost-volume-
profit analysis?
Contribution earned with respect to one rupee of sales
Contribution per unit
Total profit ratio
Variable cost percentage

Question 7
What is the significance of Cost-Volume-Profit (CVP) analysis in managerial
accounting?
Assess the impact of changes in sales volume on profit.
Calculate total costs
Distribute overhead costs
Identify fixed costs

Question 8
___________ is the point where the contribution margin equals fixed costs,
resulting in zero profit.
Break-even point
Equilibrium point
Maximum profit point
Profit volume point

Question 9
In break-even analysis, __________ is the difference between total sales and
the break-even point.
Margin of error
Margin of loss
Margin of profit
Margin of safety

Question 10
The ratio of contribution margin to sales called ________________
Break-even ratio
Cost margin ratio
P/V margin ratio
Profit margin ratio

Question 1
Margin of Safety (MOS) does not affect a business's risk.
False
True

Question 2
C-V-P analysis studies relationship between expense (cost) revenue
(Volume of sales ) and Profit of company .
False
True

Question 3
What is the main purpose of standard costing in managerial accounting?
Analyze historical data
Calculate total revenue
Determine actual costs
Set benchmarks for performance

Question 4
What does variance analysis involve in standard costing?
Calculating return on investment
Comparing actual and standard costs
Determining break-even point
Forecasting future costs
Question 5
Which type of variance focuses on the difference between actual quantity
of input used and the standard quantity allowed?
Efficiency variance
Labor variance
Material quantity variance
Price variance

Question 6
What is the main objective of conducting variance analysis in standard
costing?
Eliminate all variances
Identify variances and their causes
Increase overall production efficiency
Maintain historical cost records

Question 7
How do managers typically use variance analysis results in decision-
making?
For maintaining a control over the business
Identify employee performance issues
Ignore variances and focus on budgets
Plan long-term strategies

Question 8
___________ is the term used to describe the difference between actual and
standard costs in variance analysis.
Deviation
Difference
Discrepancy
Variance
Question 9
An unfavorable variance indicates_________ in variance analysis.
Cost savings
Efficient resource utilization
Meeting or exceeding standards
Poor cost control

Question 10
___________ is analyzed to locate the reasons for increase in material cost,
which makes controlling of material cost easy.
Favorable variance
Labour cost variance
Material cost variance
Unfavorable variance
Question 1
What is the primary purpose of a budget in managerial accounting?
Calculate return on investment
Control expenditures
Determine market trends
Track historical data

Question 2
What does budgetary control involve in managerial accounting?
Calculating profit margins
Monitoring actual performance
Reporting historical data
Setting up a budget

Question 3
What is the first step in the process of budgeting and budgetary control?
Analyzing historical data
Calculating ROI
Monitoring actual performance
Setting up a budget

Question 4
What is the term used to describe a financial plan that outlines expected
revenues and expenses for a specific period?
Budget
Financial forecast
Income statement
Profit projection

Question 5
How does budgetary control contribute to managerial decision-making?
It eliminates the need for audits
It enforces strict spending limits
It reports historical data
It sets financial goals

Question 6
___________ represents any difference between the budgeted amount and
the actual outcome.
Budget projection
Budget variance
Financial forecasting
Strategic planning

Question 7
Cash budget depends upon cash forecasts
False
True

Question 8
Production budget and labour budget are interrelated
False
True

Question 9
Favorable variance means the actual cost is more than the standard cost
False
True

Question 10
Material variance is calculated to know difference between standard
labour cost and actual labour cost.
False
True