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MCQs 1: The term management accounting was first coined in

1960 1950 1945 1955
Answer Explanation

MCQs 2: The second term for Horizontal Analysis is

Dynamic Analysis Inter-firm Analysis Time-series Analysis All of the above
Answer Explanation

MCQs 3: Vertical analysis is also known as

Static analysis Structural analysis Cross-sectional analysis All of the above
Answer Explanation

MCQs 4: Time value of money indicates that

A unit of money obtained today is worth more than a unit of money obtained in future A unit of money obtained today is worth less than a unit of money obtained in future There is no difference in the value of money obtained today and tomorrow None of the above
Answer Explanation

MCQs 5: Time value of money supports the comparison of cash flows recorded at different time period by

Discounting all cash flows to a common point of time Compounding all cash flows to a common point of time Using either a or b None of the above
Answer Explanation

MCQs 6: When the concept of ratio is defined in respect to the items shown in the financial statements, it is termed as

Accounting ratio Financial ratio Costing ratio None of the above
Answer Explanation

MCQs 7: The definition, “The term accounting ratio is used to describe significant relationship which exist between figures shown in a balance sheet, in a profit and loss account, in a budgetary control system or in a any part of the accounting organization” is given by

Biramn and Dribin Lord Keynes J. Betty None of the above
Answer Explanation

MCQs 8: The relationship between two financial variables can be expressed in:

Pure ratio Percentage Rate or time Either of the above
Answer Explanation

MCQs 9: Which of the following statement is true about Funds Flow Statement?

A) It highlights change in funds of a firm at different point
B) It highlights change in funds of different firms at a single point
C) It highlights change in funds of different firms at different point
D) It doesn’t highlights change in funds

Only A Only B Only D A, B, C, D
Answer Explanation

MCQs 10: In the context of Funds Flow Analysis, the word “funds” is used to define

Net Working capital Total current assets-Total current liabilities Both a and b None of the above
Answer Explanation

MCQs 11: As per Accounting Standard-3, Cash Flow is classified into

Operating activities and investing activities Investing activities and financing activities Operating activities and financing activities Operating activities, financing activities and investing activities
Answer Explanation

MCQs 12: Cash Flow Statement is also known as

Statement of Changes in Financial Position on Cash basis Statement accounting for variation in cash Both a and b None of the above
Answer Explanation

MCQs 13: The objectives of Cash Flow Statement are

A) Analysis of cash position
B) Short-term cash planning
C) Evaluation of liquidity
D) Comparison of operating Performance

Both A and B Both A and C Both B and D A, B, C, D
Answer Explanation

MCQs 14: Which of the following is a conventional method of ascertaining cost?

Absorption costing Full Costing Both a & b None of the above
Answer Explanation

MCQs 15: Under absorption costing, profit is ascertained

On the basis of difference between sales and total cost By computation as per desired rate of profit on sales or cost Both a and b None of the above
Answer Explanation

MCQs 16: All costs are classified under ______ segments under absorption costing.

Five Six Four Three
Answer Explanation

MCQs 17: In make or buy decision, marginal costs as well as additional fixed costs are the factors to be considered.

True False
Answer Explanation

MCQs 18: If the marginal cost is _________ buying price, additional requirement of the component should be met by making rather than buying.

Equal to More than Less than None of the above
Answer Explanation

MCQs 19: __________ refers to changes in total costs that occur due to changes in volume of production or sales, product system, product mix or from the adoption of an alternative course of action.

Differential costs Marginal costs Absorption costs None of the above
Answer Explanation

MCQs 20: The Break-even Point of a company is that level of sales income which will equal the sum of its fixed cost.

True False
Answer Explanation

MCQs 21: Which of the following are characteristics of B.E.P?

There is no loss and no profit to the firm Total revenue is equal to total cost Contribution is equal to fixed cost All of the above
Answer Explanation

MCQs 22: Which of the following are assumptions for break-even analysis?

A) Elements of cost cannot be divided in different groups.
B) Fixed cost remains certain from zero production to full capacity.
C) Behavior of different costs is linear.
D) Selling per price unit remains constant.

A, B, C B, C, D A, C, D A, B, D
Answer Explanation

MCQs 23: While measuring break-even analysis, it is considered that during a specific period there will be no change in general price level, i.e., labor, cost of material and other overheads.

True False
Answer Explanation

MCQs 24: Which of the following are limitations of break-even analysis?

Static concept Capital employed is taken into account Limitation of non-linear behavior of costs Limitation of presence of perfect competition
Answer Explanation

MCQs 25: ___________ can be defined as a system which intends to control the cost of each unit through prior determination of what should be the cost and then its comparison with actual cost.

Standard costing Absorption costing Marginal costing None of the above
Answer Explanation

MCQs 26: Standard costing is the preparation of standard costs and their comparison with _______ and the analysis of ________.

Marginal costs, Variances Variances, Marginal costs Actual costs, Variances Variances, Actual costs
Answer Explanation

MCQs 27: For the application of standard costing, it is necessary to meet which of following conditions?

A) A sufficient volume of standard components or products should be manufactured
B) Methods and procedures cannot be controlled
C) A sufficient number of costs should be able to be controlled

A and B B and C A and C None of the above
Answer Explanation

MCQs 28: Which of the following statements are true?

Budget is prepared for an indefinite period Budget can be expressed in form of physical units It is no way related with the management plans and policies to be pursued in future It provides a base for measuring the success of expected results
Answer Explanation

MCQs 29: The process of budgeting includes

Preparation of budget Budget Control Budget co-ordination All of the above
Answer Explanation

MCQs 30: Which of the following statements are true for forcast and budget?

Forecast and budget are one and same thing Budget is prepared after the forecast Forecast and budget both can be expressed in financial form All of the above
Answer Explanation

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