1. Quick assets do not include
I)Prepaid Expense
II)Advance Tax
III)Marketable securities
IV)Inventory
Correct : A. Only I,II and IV
2. If debt equity ratio exceeds ,it indicates risky position.
Correct : B. 2:1
3. Which of these is false?
Correct : C. Current Liabilities=Workin g capital -CA
4. If average T/R are 1,00,000 ,Closing T/R are 3 times that of opening T/R .What is Closing T/R?
Correct : C. 150000
5. A firm that issues stocks and bonds to raise funds results in in cashflow.
Correct : C. Increased Equity
6. Which are not Investing activity?
I)Receipts from sale of fixed asset
II)Interest received
III)Dividend paid
IV)Cash Payment to acquire share of other Companies
Correct : C. Only III
7. Which of the following is not the objective of budgetary control?
I)Control
II)Danger of rigidity
III)Motivation
IV)Based on estimates
Correct : B. Only II and IV
8. Which statement is true.I)Fixed budget assumes Changing business conditions. II)Flexible budget is prepared for only one level of activity.
Correct : A. None is true
9. The wages due from Mar 20 ,Apr 20 and May 20 are Rs8000,Rs9000 and Rs 10,000 respectively.There is delay in payment of wages of 2 months.What will be the wages paid in May 20 in the Cash Budget.
Correct : B. Rs 8000
10. Which of the following is/are the responsibilty centres.
I)Cost centre
II)Investment Centre
III)Profit center
IV)Revenue Centre
Correct : A. All
11. Total Actual material is 1250 Kg.The Standard qty of Material A=800Kg and B=400Kg.What is the revised Std qty of A and B respectively.
Correct : C. 833Kg,417Kg
12. SH=800 Hours,AR=Rs 7 ,SR=6,AH=750 Hours.Calculate labour rate variance(LRV).
Correct : A. 750 A
13. Yr 2019 :sales 1,20,000 and Profit8,000 ;Yr 2020:Sales 1,40,000 an profit 13,000.Calculate P/v ratio.
Correct : A. 25%
14. Calculate Break Even Point in units if Fixed cost is 15,000
,SP=15 and VC=12
Correct : D. 5000 units
15. Actual Sales=40,000 and Break Even Point =25,000.Calculate Margin of safety(MOS).
Correct : B. 15000
16. What are the sales required to earn a profit of 12,000 if Fixed cost are 22,000 and P/V ratio is 25%.
Correct : A. 136000
17. Actual Sales=80,000,P/V ratio=20% and Fixed cost=10,000.Calculate Profit.
Correct : D. 6000
18. The cost that tends to remain constant irrespective of the level of activity is called
_______.
Correct : B. Fixed cost
19. Cost Accounting restrict itself with _______ transactions.
Correct : C. Historical
20. Following is (are) the method(s) of measuring labour turnover.
Correct : D. All of the above
21. Following is (are) the example(s) of semi-variable overheads.
Correct : D. All of the above
22. _________ indicates the financial status of the business at given period.
Correct : A. Balance sheet
23. In Cash budget, Non operating cash inflow include(s)
Correct : D. All of the above
24. Sales Budget is a forecast expressed in -
Correct : C. Both (a) and (b)
25. Following is used as tool for Cost Control
Correct : C. Standard cost
26. Management accounting assists the management
Correct : D. In planning, direction and control
27. Management accounting is deals with -
Correct : C. Both (a) and (b)
28. Which of the following is an advantage of standard costing?
Correct : D. All of the above
29. Which of the following is not a functional budget?
Correct : A. Labour budget
30. Which is the mostly likely purpose of budgeting?
Correct : A. Planning and control of an organization's income and expenditure
31. __________ Accounting becomes a source of information for Management Accounting.
Correct : C. Both (a) and (b)
32. Calculate the production budget from the following data: sales 89,350 units; opening inventory 23,864 units; closing inventory 33,156 units.
Correct : D. 98,642 units
33. Fixed budget is useless for comparison when the level of activity -
Correct : B. Fluctuates both ways
34. The budget committee consists of -
Correct : B. Budget officers
35. A budget centre is -
Correct : A. Department or part of the department
36. The main objective of budgetary control is -
Correct : C. To plan to achieve its goals
37. Production budget is -
Correct : B. Dependent on sales budget
38. Sales budget shows the sales details as -
Correct : D. All of the above
39. An example of long period budget is -
Correct : A. R & D budget
40. The budgets are classified on the basis of -
Correct : D. All of the above
41. Budget relating to the key factor is prepared -
Correct : C. Before other budgets
42. Key factor is also known as -
Correct : D. All of the above
43. In responsibility accounting system -
Correct : D. All of the above
44. The responsibility accounting emphasizes the performance of -
Correct : B. Men
45. The responsibility accounting is also called -
Correct : C. Both (a) and (b)
46. The responsibility accounting is the part of -
Correct : B. Management accounting
47. The responsibility accounting is a controlling tool for -
Correct : A. Top‐level management
48. Which of the following system emphasizes on cost control ?
Correct : B. Responsibility accounting
49. The responsibility centres come under the responsibility of -
Correct : C. Responsibility managers
50. The subdivision of responsibility centre is -
Correct : D. All of the above
51. The accounting department in an organization is -
Correct : A. Investment centre
52. What is the main advantage of responsibility accounting ?
Correct : D. All of the above
53. The responsibility accounting is a system by which the responsibility is assigned to the
concerned persons -
Correct : B. To control cash
54. The contribution of accounting department in an organization -
Correct : A. Cannot be measured in monetary terms
55. According to responsibility accounting, the entire organization is divided into various -
Correct : C. Responsibility centre
56. It may not be ______ to measure exactly the output of service departments in an
organization.
Correct : C. Either (a) or (b)
57. Internal transfer of process at profit _________ of the company.
Correct : A. Will not increase the asset
58. The success of budgetary control system depends upon the willing cooperation of ….…
Correct : D. All the functional areas of management
59. A key factor is one which restricts ……
Correct : A. The volume of production
60. The classification of fixed and variable cost is useful for the preparation of ……
Correct : B. Flexible budget
61. In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s
price is below the firm’s own ___________.
Correct : B. Variable Cost
62. __________ is a detailed budget of cash receipts and cash expenditure incorporating
both revenue and capital items.
Correct : A. Cash Budget
63. Sunk costs are __________.
Correct : B. Not relevant for decision making
64. Abnormal cost is the cost ___________.
Correct : B. Cost not normally incurred at a given level of output
65. Responsibility Centre can be categorised into ___________.
Correct : D. All of the above
66. A profit centre is a centre ___________.
Correct : A. Where the manager has the responsibility of generating and maximising profits
67. Management Accounting is and financial accounting differ in that management
accounting information is prepared –
Correct : B. Using whatever methods the company finds beneficial
68. Purpose of Management Accounting is to –
Correct : C. Help managers make decisions
69. Management Accounting is the branch of accounting concerned with reporting to –
Correct : A. Internal Managers
70. Which of the following does NOT describe management accounting?
Correct : C. Externally focused
71. Management accounting reports are prepared
Correct : A. To meet the needs of decision makers within the firm
72. Management accounting is primarily concerned with -
Correct : C. Providing managers with relevant information to help achieve organizational goals.
73. Which matters are taken into consideration while preparing production budget ?
Correct : A. The estimate of the number of units to be produced during the budget period.
74. Which of the following matter is to be taken into account which preparing Material
Purchase Budget ?
Correct : D. The maximum and minimum quantities of materials to be purchased.
75. Which of the following matter is relevant with cash receipts and disbursement method of
preparing Cash Budget ?
Correct : C. Debtors Ratio is used to estimate the timings when cash collections would be obtained from credit sales.
76. Budget period depends upon -
Correct : D. All of the above
77. Usually the production budget is stated in terms of -
Correct : C. Both (a) and (b)
78. Recording of actual performance is -
Correct : B. A step in budgetary control
79. Budgetary control system helps the management to eliminate -
Correct : C. Both (a) and (b)
80. Budgetary control facilitates easy introduction of the -
Correct : C. Standard costing
81. Budgetary control system acts as a friend, philosopher and guide to the -
Correct : A. Management
82. Budgetary control system defines the objectives and policies of the -
Correct : D. Subjective matter
83. A budget is tool which helps the management in planning and control of -
Correct : A. All business activities
84. In responsibility centre, the output is called as -
Correct : A. Revenue
85. If the responsibility centre gets more revenue from output, then it is called -
Correct : C. Profit centre
86. Cost Unit is defined as -
Correct : A. Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed
87. Fixed cost is a cost -
Correct : C. Which do not change in total during a given period despise changes in output
88. Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking. -
Correct : A. can not
89. Element/s of Cost of a product are -
Correct : D. Material, Labour and expenses
90. Overhead refers to -
Correct : B. All Indirect costs
91. Which of the following is not a method of cost absorption?
Correct : D. Repeated distribution method
92. A Local Authority is preparing cash Budget for its refuse disposal department. Which of
the following items would not be included in the cash budget?
Correct : B. Depreciation of the machinery
93. Which of the following characteristics does NOT pertain to management accounting?
Correct : D. Has externally imposed standards
94. A budget which is prepared in a manner so as to give the budgeted cost for any level of
activity is known as -
Correct : D. Flexible budget
95. ___________ is a summary of all functional budgets in a capsule form.
Correct : B. Master Budget
96. When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000,
the P/V ratio is -
Correct : C. 25%
97. From following which is not a principle of good reporting ?
Correct : B. Accountability
98. From day to day operation which report is prepare ?
Correct : A. Routine
99. Any special event happen into the business then which report is prepared ?