1) The management accounting can be stated an extension of
A) Cost Accounting
B) Financial Accounting
C) Responsibility Accounting
a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C
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2) Which of the following statements are true about Horizontal Analysis?
A) It does not examine the periodical trend.
B) It is useful for long-term analysis.
C) It is useful for long –term planning.
a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C
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3) Which of the following statements are true?
A) Comparative financial statement is an example of horizontal analysis.
B) Trend Analysis is an example of vertical analysis.
C) Cash flow analysis is an example of horizontal analysis.
a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C
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4) Present value tables for annuity cannot be straight away applied to varied stream of cash flows.
a. True
b. False
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5) Heterogeneous cash flows can be made comparable by
a. Discounting technique
b. Compounding technique
c. Either a or b
d. None of the above
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6) General Profitability ratios are based on
a. Investments
b. Sales
c. Both A & B
d. None of the above
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7) Gross Profit ratio is also termed as
a. Gross Profit Margin
b. Gross Margin to net sales
c. Both a and b
d. All of the above
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8) While calculating Gross Profit ratio,
a. Closing stock is deducted from cost of goods sold
b. Closing stock is added to cost of goods sold
c. Closing stock is ignored
d. None of the above
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Answer
Explanation
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ANSWER: Closing stock is deducted from cost of goods sold
Explanation:
No explanation is available for this question!
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9) Which of the following are current assets?
A) Fixed investments
B) Trade Payables
C) Short-term loans and advances
D) Furniture
a. Only A
b. Only B
c. Only C
d. A, B, C and D
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10) Which of the following are Non-current assets?
a. Land, Building and Plant
b. Leasehold property
c. Computer software
d. All of the above
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11) Cash Flow Statement studies causes of change in working capital.
a. True
b. False
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12) _________ reconciles the opening cash balance with the closing cash balance of a given period on the basis of net decrease or increase in cash during that period.
a. Cash Flow Statement
b. Funds Flow Statement
c. Both a and b
d. None of the above
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13) Which of the following statements are true?
A) Cash flow statement is more useful for short term cash planning.
B) Funds Flow statement is more useful in planning medium term and long term financing.
C) Cash Flow statement discloses the position of liquidity in a better way.
a. Only A
b. Only B
c. Only C
d. A, B and C
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14) Fixed expenses decrease per unit with the increases in production and increases per unit with the decrease in production.
a. True
b. False
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15) Marginal costs is taken as equal to
a. Prime Cost plus all variable overheads
b. Prime Cost minus all variable overheads
c. Variable overheads
d. None of the above
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16) If total cost of 100 units is Rs 5000 and those of 101 units is Rs 5030 then increase of Rs 30 in total cost is
a. Marginal cost
b. Prime cost
c. All variable overheads
d. None of the above
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17) A box manufacturer discovers that while it costs Rs 6.25 per unit to make a component T the same is available in the market at Rs 5.75 each. There is reliability of regular supply. The breakdown of costs is materials is Rs 2.75 per unit, Labor is Rs 1.75 per unit, Other variable expenses is Rs 0.50 and depreciation and other fixed costs is Rs 1.25. Will you make or buy?
a. Buy the product
b. Make the product
c. Either a or b
d. None of the above
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18) In marginal costing, profitability of each product is measured on the basis of its
a. Cost
b. Profit
c. Contribution
d. None of the above
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19) Which of the following statements are true about differential cost?
a. Differential cost is also known as relevant cost
b. Differential costs are estimated future costs
c. Differential costs include only those costs which change as a result of the decision making being considered
d. All of the above
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20) Contribution and profit both are same concepts.
a. True
b. False
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21) Which of the following statements are true about contribution?
a. Contribution doesn’t include fixed cost whereas profit includes fixed cost
b. Contribution is not based on the concept of marginal cost
c. Contribution above breakeven point becomes profit
d. All of the above
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Answer
Explanation
Related Ques
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ANSWER: Contribution above breakeven point becomes profit
Explanation:
No explanation is available for this question!
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22) Profit-Volume ratio is also known as
a. Contribution ratio
b. Contribution/Sales ratio
c. Marginal Income percentage
d. All of the above
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23) Which of the following statements are true about P/V ratio?
a. P/V Ratio can never be used to measure break-even point
b. Higher the P/V ratio less will be the profit and vice versa
c. Concept of P/V ratio is also used to determine profit at a given volume of sales
d. All of the above
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Answer
Explanation
Related Ques
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ANSWER: Concept of P/V ratio is also used to determine profit at a given volume of sales
Explanation:
No explanation is available for this question!
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24) The P/V ratio can be improved by
a. Decreasing the selling price per unit
b. Increasing variable cost
c. Changing the sales mix
d. None of the above
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25) Standard costs are better than historical costs because
a. Determination of standard costs is economical in terms of money as well as time
b. They facilitate delegation of responsibility
c. They help in timely action against extravagances
d. All of the above
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26) Which of the following statements are true about Estimated Costs and Standard Costs?
a. Standard costs are based on scientific analysis and engineering studies while estimated costs are based on historical
b. Standard cost emphasis is on ‘what cost will be’ while estimated costs emphasis is on ‘What cost should be’
c. Standard costs are more frequently revised compared to estimated costs
d. Estimated costs are more stable than standard costs
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Answer
Explanation
Related Ques
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ANSWER: Standard costs are based on scientific analysis and engineering studies while estimated costs are based on historical
Explanation:
No explanation is available for this question!
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27) Which of the following statements are true about Standard Costs and Budgetary Control System?
a. Both are the important techniques of management control
b. Under both the techniques targets are decided beforehand
c. Both are based on presumption that cost is controllable
d. All of the above
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28) Which of the following statements are true about budget, budgeting & budgetary control?
a. Budgeting is business estimates for future periods
b. Budget is the process of preparing business estimates
c. Budgetary control is the means to achieve performance on the basis of budget
d. None of the above
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Answer
Explanation
Related Ques
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ANSWER: Budgetary control is the means to achieve performance on the basis of budget
Explanation:
No explanation is available for this question!
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29) Budgetary control is used to make cost accounting systematic and reliable.
a. True
b. False
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30) Which of the following statements are not true about budget, budgeting & budgetary control?
a. Budgetary control works on the basis of best option
b. Budget is one of the important mediums of communication
c. Budgeting develops the quality of objectivity in planning
d. None of the above
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31) The receipts from dividends, refund of tax, rent, interest etc. are
a. Receipts from Non-business operations
b. Receipts from business operations
c. Receipts from capital transactions
d. None of the above
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32) The receipts from issue of shares, issue of debentures and sale of fixed investments are
a. Receipts from Non-business operations
b. Receipts from business operations
c. Receipts from capital transactions
d. None of the above
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33) Flexible budgeting is used when the supply of material and labor required for production is _____.
a. Uncertain
b. Certain
c. Either a or b
d. None of the above
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34) Flexible budget is used when
a. Demand remains static even when there is change in taste and fashion of customers
b. When the business unit is new
c. Whenever there is change of activity due to change in government policies
d. All of the above
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35) The material usage variance which results due to the difference between standard quantities specified is measured as
a. Total standard cost - Total actual cost
b. Standard cost of revised standard mix - Standard cost of actual mix
c. (Standard unit price - Actual unit price) * Actual quantity used
d. (Standard quantity - Actual quantity) * Unit standard price
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Answer
Explanation
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ANSWER: (Standard quantity - Actual quantity) * Unit standard price
Explanation:
No explanation is available for this question!
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36) In a manufacturing firm, the standard quantity of material was set at 10 kg and standard price was fixed at Rs. 2 per kg. The actual quantity consumed was 12 kg and the actual price paid was Rs 1.90 per kg. Determine material usage variance.
a. Rs 4 favorable
b. Rs 4 unfavorable
c. Rs 2.80 unfavorable
d. Rs 1.20 favorable
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37) A standard cost card reveals that one unit of Product A needs 2 kg of material X at Rs 10 per kg. During February 800 units of Product A were produced. Actual price paid for material X is Rs 9 per kg and total cost Rs 15,300. Determine material cost variance.
a. Rs 700 favorable
b. Rs 700 unfavorable
c. Inadequate data
d. None of the above
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38) The management auditor’s work begins
a. After the work of a statutory auditor ends
b. Before the work of a statutory auditor begins
c. Varies from firm to firm
d. None of the above
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39) In responsibility cost accounting the costs in focus are
a. Controllable costs
b. Uncontrollable costs
c. Both a and b
d. None of the above
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40) The principle of exception with respect to reporting suggests that
a. Information presented should cover only those matters which are not under control of the user of the report
b. Concentration should be on trivial data
c. The volume of data and report are considerably reduced to the bare minimum
d. None of the above
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Answer
Explanation
Related Ques
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ANSWER: The volume of data and report are considerably reduced to the bare minimum
Explanation:
No explanation is available for this question!
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