2. As per Accounting Standard-3, Cash Flow is classified into
Correct : D. Operating activities, financing activities and investing activities
3. Which of the following is not a cash outflow?
Correct : D. Increase in creditors
4. Which of the following is not a cash inflow?
Correct : C. Decrease in creditors
5. When a fixed asset is bought as hire purchase, interest element is classified under ______ and loan element is classified under________.
Correct : B. Financing activities, investing activities
6. In the case of financial enterprises, the cash flow resulting from interest and dividend received and interest paid should be classified as cash flow from
Correct : A. Operating activities
7. As per AS-3, Cash Flow Statement is mandatory for
(a) All enterprises
(b) Companies listed on a stock exchange
(c) Companies with a turnover of more than Rs 50 crores
9. While preparing Cash Flow Statement, non-cash items and non-operating items are not required to be adjusted under________
Correct : B. Direct method
10. Cash Flow Statement is prepared from
Correct : D. All of the above
11. When the concept of ratio is defined in respected to the items shown in the financial statements, it is termed as
Correct : A. Accounting ratio
12. Profit for the objective of calculating a ratio may be taken as
Correct : D. All of the above
13. Which of the following falls under Profitability ratios?
(a) General Profitability ratios
(b) Overall Profitability ratios
(c) Comprehensive Profitability ratios
Correct : A. A and B
14. Gross Profit ratio is also termed as
Correct : C. Both a and b
15. Operating ratio is calculated by
Correct : C. (Operating cost/Net sales)*100
16. Which of the following is expenses ratio?
(a) Administrative expenses ratio
(b) Selling and Distribution expenses ratio
(c) Factory expenses ratio
(d) Finance Expenses ratio
Correct : D. A, B , C, D
17. Return on equity capital is calculated on basis of:
Correct : C. Either a or b
18. Turnover ratios are also known as
Correct : C. Both a and b
19. Debtors Turnover ratio is also known as
(a) Receivables turnover ratio
(b) Debtors velocity
(c) Stock velocity
(d) Payable turnover ratio
Correct : A. A and B
20. Liquid assets is determined by
Correct : A. Current assets-stock-Prepaid expenses
21. Comparison of financial statements highlights the trend of the _________ of the business.
Correct : D. All of the above
22. Analysis of any financial Statement comprises
Correct : D. All of the above
23. Which of the following are techniques, tools or methods of analysis and interpretation of financial statements?
Correct : D. All of the above
24. Interpretation of accounts is the
Correct : D. All of the above
25. The form of balance sheet is
Correct : D. Horizontal or vertical
26. The term current asset doesn’t cover
Correct : A. Car
27. A budgeting process which demands each manager to justify his entire budget in detail from beginning is
Correct : C. Zero base budgeting
28. Match the columns
(i) Activity Ratio -------------------- i) (Actual hours worked / Budgeted hours) * 100
(ii) Capacity Ratio ------------------ ii) (Standard hours of actual production / Actual hours worked) * 100
(iii) Efficiency Ratio ----------------- iii) (Standard hours for actual output / Budgeted hours) * 100
Correct : C. A-iii, B-i, C-ii
29. While preparing sales budget, which of the following factors are considered?
Correct : B. Environmental factors
30. _______ provides an estimate of the capital amount that may be required for buying fixed assets needed for meeting production requirements.
Correct : B. Cash budget
31. Plant utilization budget and Manufacturing overhead budgets are types of
Correct : C. Cost budget
32. _______ is designed after assessment of the volume of output to be produced during budget
period.
Correct : A. Cost budget
33. ________ is the first step of budgetary system and all other budgets depends on it.
Correct : B. Sales budget
34. _______also known as subsidiary budgets.
Correct : B. Functional budget
35. _________ is stated as a budget which is made to change as per the levels of activity attained.
Correct : B. Flexible budget
36. _______ is prepared for single level of activity and single set of business conditions.
Correct : A. Fixed budget
37. The process of budgeting helps in the control of
Correct : D. All of the above
38. Which of the following statements are not true about budget, budgeting & budgetary control?
Correct : D. None of the above
39. Which of the following statements are true about responsibility accounting?
Correct : A. Responsibility accounting results in inter-departmental conflicts
40. In profit center revenue represents a monetary measure of output emanating from a profit
center in a given period irrespective whether
Correct : C. Both a and b
41. Contribution margin center is also known as
Correct : B. Profit center
42. Which of the following is responsibility center?
Correct : D. All of the above
43. The responsibility centers, for control purposes, may be classified into _____ types.
Correct : B. Three
44. The area of focus on responsibility center is
Correct : C. Optimum utilization of resources
45. In responsibility cost accounting the costs in focus are
Correct : A. Controllable costs
46. The term standard cost refers to the:
Correct : B. budgeted unit cost of product produced in a particular period
47. The sub-variance of material usage variance, known as Material mix variance is measured as
Correct : B. Standard cost of revised standard mix - Standard cost of actual mix
48. Volume variance arises when
Correct : C. There is decrease or increase in actual output compared to the budgeted output
49. The corrective actions after the analysis of variances has to be taken by
Correct : B. Management
50. Sales margin variance due to sales quantities is measured as
Correct : B. Revised standard profit - Budgeted profit
51. .Which of the following statements are true about labor idle time?
Correct : C. Labour idle time variance is always unfavorable or adverse
52. The formula used for calculation of labor rate variance is
Correct : B. (Standard rate per hour - Actual rate per hour) * Actual Hours
53. Idle time variance arises when
Correct : C. Both a and b
54. Material price, mix, usage and revised quantity variances are measured on _______ basis, whereas material yield variance is measured on _______ basis.
Correct : C. Input, Output
55. Marginal cost is computed as
Correct : A. Prime cost + All Variable overheads
56. Marginal costing is also known as Direct costing
Correct : C. None of the above
57. Which of the following statements are true?
(a) Marginal costing is not an independent system of costing.
(b) In marginal costing all elements of cost are divided into fixed and variable components.
(c) In marginal costing fixed costs are treated as product cost.
(d) Marginal costing is not a technique of cost analysis.
Correct : A. A and B
58. While computation of profit in marginal costing
Correct : A. Total marginal cost is deducted from total sales revenues
59. Under High and Low Point method, the output at two different levels is compared with the amount of __________ incurred at these two points.
Correct : B. Total costs
60. Which of the following statements related to Contribution Analysis are ture?
Correct : A. If contribution is zero, there is loss equal to fixed costs
61. When contribution is negative but less than fixed cost,
Correct : C. There will be loss less than fixed costs
62. When contribution is positive but equal to fixed cost,
Correct : D. There will be neither profit not loss
63. Absorption costing is also known as
Correct : C. Both a and b
64. In context of net operating profit, which of the following statements are true?
Correct : C. Both a and b
65. Under absorption costing, managerial decisions are based on
Correct : A. Profit
66. Managers utilizes marginal costing for
Correct : D. All of the above
67. ___________ is not suitable where selling price is determined on the basis of cost-plus method.
Correct : B. Marginal costing
68. Which of the following are characteristics of B.E.P?
Correct : D. All of the above.
69. Which of the following are limitations of break-even analysis?
Correct : A. Static concept
70. Using equation method, Break-even point is calculated as
71. 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?
Correct : C. 1,250 units
72. Contribution is also known as
Correct : A. Contribution margin
73. Determine Contribution if Sales is Rs 1,50,000 and P/V ratio is 40%.
Correct : A. Rs 60,000
74. Which of the following statements are true?
Correct : C. Contribution above breakeven point becomes profit.
75. Profit-Volume ratio is also known as
Correct : D. All of the above
76. Which of the following statements are true?
Correct : C. Concept of P/V ratio is also used to determine profit at a given volume of sales
77. The P/V ratio can be improved by
Correct : C. Changing the sales mix
78. P/V ratio can be calculated on the basis of variable cost ratio as
Correct : A. 1 - Variable Cost Ratio
79. Sales for desired profit is measured as
Correct : A. (Fixed cost + profit)/ (P/V Ratio)
80. Margin of safety is equal to
Correct : A. Actual sales – Sales at Breakeven point
81. Angle of incidence is the angle at which
Correct : A. Total revenue line intersects the total cost line
82. Direct material cost + direct labor cost + other variable costs is equal to…
Correct : A. Contribution
83. The factor which limits the volume of output of different products of an understanding at a particular point of time is known as…
Correct : A. Key factor
84. The break even chart helps the management in…
Correct : D. All of the above
85. In management accounting, an emphasis and focus must be
Correct : B. Future oriented
86. In financial accounting, investors, banks, suppliers and government agencies are classified as
Correct : A. External parties
87. If the actual output is more than the budgeted output, volume variance is
Correct : A. Favourable
88. To get to labour efficiency variance, the formula to be applied is
Correct : C. (Standard time - Actual time) * Standard rate per hour
89. Which of the following is technique of financial statement analysis?
Correct : D. All
90. For calculating trend percentages any year is selected as:
Correct : C. Base year
91. 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
Correct : A. Marginal cost
92. Which of the following statements are true?
Correct : C. Both a and b
93. In case of other enterprises cash flow arising from interest paid should be classified as cash flow from ________ while dividends and interest received should be stated as cash flow from ____.
Correct : B. Financing activities, investing activities
94. Determine Contribution if Fixed cost is Rs 50,000 and loss is Rs 20,000.
Correct : C. Rs 30,000
95. Which of the below is an Accounting Concept
Correct : B. Separate Legal Entity
96. The Carl Care Company established the following direct labour cost standards for one unit of product Z:
•Standard hours: 1.5 hours
•Standard rate: $20 per hour
•Standard cost: $30 (1.5 hours @ $20 per hour)
During the month of July, 20,000 direct labour hours were worked, and 12,500 units of
product Z were manufactured. The total wages related to direct labour in July were
$405,000. The direct labour rate variance for July was:
Correct : A. $5,000 unfavourable
97. Which of the following is an example of Semi-Variable Costs
Correct : C. Telephone Expenses
98. Long Term Solvency is indicated by:
Correct : B. Debt / Equity Ratio
99. A department makes a product whose contribution per unit is £1,000, and which takes 20 hours machine time. A component used in this product with a marginal cost of £300 (taking 5 hours of machine time) could be purchased from an external supplier. The department is working at full capacity. What is the maximum price that the company may pay to buy the component from an external supplier?
Correct : A. £550
100. A document which provides for the detailed cost centre and cost unit is _______.