3. _______ is devoted to providing information for external users.
Correct : B. Financial accounting
4. Financial accounting is primarily concerned with providing financial reports to all of
the following EXCEPT
Correct : D. management of the firm.
5. Management accounting and financial accounting differ in that management accounting
information is prepared
Correct : B. using whatever methods the company finds beneficial.
6. The primary objective of management accounting is
Correct : C. to provide management with information useful for planning and control of operations.
7. Management accounting is the branch of accounting concerned with reporting to
Correct : A. internal managers.
8. Management accounting reports are prepared
Correct : A. to meet the needs of decision makers within the firm.
9. Cost accounting
Correct : D. All of the above descriptions are true.
10. Which of the following costing activities is associated with the financial accounting
system?
Correct : B. determining the cost of goods sold for financial statements
11. Which of the following activities is NOT associated with the financial accounting information system?
Correct : A. reporting on the cost of quality
12. Which of the following cost management tools supports the firm's concentration on the delivery of value to the customer?
Correct : D. value-chain analysis
13. Factors that have led to a global market for manufacturing and service firms are
Correct : A. improved transportation and communications systems.
14. Which of the following activities is NOT significant to the advancement of information
technology?
Correct : C. theory of constraints
15. Software that has integrated system capability using real time data is
Correct : A. enterprise resource planning software.
16. Automation of the manufacturing environment is associated with increases in
Correct : B. capacity.
17. Total quality management emphasizes
Correct : D. all of the above.
18. Which of the following emerging themes in cost accounting deals with managers striving to create an environment that will enable workers to manufacture perfect (zero-defect) products?
Correct : D. total quality management
19. Competitive advantage is established by
Correct : C. providing greater customer value for less cost than competitors.
20. Improvement in time performance is most likely NOT enhanced by
Correct : B. adding processes in production.
21. Which of the following statements is NOT true about world-class firms?
Correct : A. World-class firms are firms that are poor in customer support.
22. Monitoring the number of defects produced is an example of the management function of
Correct : B. control.
23. Performance reports are accounting reports that compare
Correct : A. planned data with actual data.
24. Which of the following statements correctly distinguishes between financial and
management accounting?
Correct : D. Management accounting is oriented more toward the planning and control
25. Setting the company's profit targets for the upcoming year is an example of the management function of
Correct : A. planning.
26. The planning process includes
Correct : D. all of the above.
27. Management accounting is concerned with which kind of decision?
Correct : D. all of the above
28. Management accounting:
Correct : D. all of the above
29. Management accounting is primarily concerned with:
Correct : C. providing managers with relevant information to help achieve organizational goals.
30. Vertical analysis is made to review and analyze the financial statements of -----------------accounting period.
Correct : A. One
31. Comparison of financial variables of a firm over a period of time is known as--------------
Correct : C. Trend analysis
32. Interpretation requires analysis and ----------------------------------
Correct : A. Comparison
33. The process of deriving conclusions from the analysis is commonly termed as ----------------
Correct : D. Interpretation
34. Common size Income Statement present the various items as a percentage of ----------------
Correct : A. Sales
35. External analysis is based on ------------- financial statements
Correct : B. Published
36. Financial Statements provide a summary of --------------------------
Correct : A. Accounts
37. When financial statements for a number of years are reviewed and analyzed, the analysis is known as ---------------------
Correct : C. Horizontal analysis
38. When ratios are calculated from the financial statements of one year, it is known as ---------------------
Correct : B. Vertical analysis
39. Horizontal analysis is also known as -----------------------
Correct : C. Dynamic analysis
40. Trend analysis is significant for
Correct : A. Forecasting and budgeting
41. In trend percentage the base year is ----------------------------
Correct : A. The first year
42. Comparative statements are a form of ---------------------------
Correct : A. Horizontal analysis
43. The term financial analysis include both --------- and interpretation
Correct : B. Analysis
44. Vertical analysis is also known as ------------------
Correct : B. Static analysis
45. The statement prepared to disclose accounting information are known as-----
Correct : C. Financial statements
46. ------------- gives a diagnosis of the profitability and financial position
Correct : A. Analysis of financial statements
47. ------------------------ helps in drawing inferences of conclusions
Correct : B. Interpretation
48. ---------------- establishes the relationship of different individual items which same common items
Correct : A. Common size statements
49. Under ------------------------ each item of expenses taken as a percentage on net sales
Correct : D. Common size Income Statement
50. ----------- helps to disclose financial position
Correct : C. Balance sheet
51. Disclose accounting information
Correct : D. Financial statements
52. Afford full diagnosis of the profitability and financial position
Correct : D. Analysis of financial statements
53. Study of the trend of the same items of two or more balance sheets
Correct : D. Comparative Balance Sheet
54. Expressed as a percentage of each asset to total
Correct : B. Common size Balance Sheet
55. Ratios of different items for various periods are calculated and compared
Correct : D. Ratio analysis
56. Yard stick which measures relationship between two variables
Correct : B. Ratio
57. 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
Correct : D. Debtors Turn over Ratio
58. The ratio of liquid asset to current liabilities
Correct : A. Quick ratio
59. Equity includes --------------
Correct : C. Equity capital + Preference share capital + reserves And surplus-fictious asset
60. The ratio which shows the relationship b/w share holder’s fund and total assets
Correct : B. Proprietary ratio
61. Long term solvency of a firm can be measured by
Correct : D. Debt equity ratio
62. The ratio that shows the relationship between fixed asset to share holders fund
Correct : A. Fixed asset to net worth
63. The index of efficiency and profitability of the business
Correct : D. Net profit ratio
64. The ratio that includes whether investment in inventory is efficiently used or not
Correct : A. Inventory turnover ratio
65. Comparison and interpretation of ratio is known as ---------------------
Correct : C. Ratio analysis
66. Powerful tool for analyzing financial statement is ----------
Correct : B. Ratio analysis
67. The relationship between two amount or variables is measured with the help of ------------
Correct : A. Ratio
68. The main aim of the ratio analysis is to help the ----------of the firm
Correct : D. Management
69. Ratios help the management in evolving market strategies through -----------
Correct : A. Inter firm comparison
70. Ratios may be used as a measure of -------------
Correct : A. Efficiency
71. An example of Balance Sheet ratio is ---------------
Correct : C. Current ratio
72. Income statement ratios are also called -----------
Correct : A. Operating ratio
73. Leverage ratios are also known as -------------- ratios
Correct : B. Long term solvency ratios
74. The ratios that shows the capacity of the business unit to meet its short term obligation out of its short term resources is known as --------------
Correct : C. Liquidity ratio
75. The ratio that highlight the end result of business activities are known as ---------------- ratios
Correct : D. Profitability
76. The efficiency of the management can be measured with the help of ------------------
Correct : A. Activity ratio
77. The ratio of current asset to current liability is known as --------------
Correct : B. Current ratio
78. The asset, the amount of which can be realized within a period of one year are known as ----------------
Correct : B. Current asset
79. The ideal current ratio is -------------
Correct : A. 2:1
80. The ratio which shows the relationship between borrowed funds and owners capital is ---------------
Correct : B. Debt equity ratio
81. Proprietary ratio measures the relationship between share holder fund and ------------------
Correct : A. Total asset
82. The relationship between total outside liabilities and total assets can be indicated through ------------
Correct : B. Solvency ratio
83. Debt service ratio is also known as --------------
Correct : A. Interest coverage ratio
84. Debt equity ratio is an example of ---------------- ratios
Correct : A. Balance sheet ratio
85. Income tax payable come under ------------------
Correct : C. Current liability
86. Stock and prepaid expanses are not included in ----------------
Correct : D. Quick asset
87. In a sound business, acid test ratio ------------------- is considered satisfactory
Correct : C. 1:1
88. Cost of good sold+operating expanses=-------------------------
Correct : D. Operating cost
89. Example of activity ratios ------------------------
Correct : D. Stock turn over ratio
90. Example of leverage ratio
Correct : D. Solvency ratio
91. Current ratio is an example of --------------------
Correct : B. Liquidity ratio
92. Stock turn over ratio is an example of -------------------
Correct : D. Activity ratios
93. Ratio analysis is a study of relationship among various --------------- factors in a business
Correct : C. Financial
94. Liquidity ratios measure the --------- solvency of a firm
Correct : B. Short term
95. By computing current ratio ---------------- solvency of a concern is assessed
Correct : A. Short term
96. ---------------- ratio studies the firm’s ability to meet its long term financial position
Correct : D. Leverage
97. Satisfactory level of debt equity ratio is --------------------
Correct : C. 2:1
98. Operating ratio establishes the relationship between --------------- and net sales
Correct : D. Operating cost
99. For dividend yield ratio -------------- price of the equity shares is taken into consideration
Correct : A. Market
100. Coverage of fixed assets by shareholder’s equity is a good tests of----------------