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- Management Accounting Test Questions - Set 3
MCQs 1: Using equation method, Break-even point is calculated as
Sales = Variable expenses + Fixed expenses + Profit
Sales = Variable expenses + Fixed expenses - Profit
Sales = Variable expenses - Fixed expenses + Profit
None of the above
MCQs 2: 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?
MCQs 3: Contribution is also known as
MCQs 4: Given selling price is RS 20 per unit, variable cost is Rs 16 per unit contribution is
MCQs 5: Standard Costing is more widely applied in job order industries and not suitable for engineering industries.
MCQs 6: Which of the following statements are true about Standard Costing?
A) It controls certain elements of cost affecting production and sales.
B) It creates cost consciousness among workers.
C) It plays no role in forecast of production cost, profit and sales.
D) It follows principle of management by exception at operational level.
MCQs 7: As per J. Batty, Standard Cost represents ______under given conditions.
MCQs 8: In forecast, there is a promise or commitment to achieve estimates.
MCQs 9: Which of the following are not the objectives of Budgeting?
A) To express the objectives of the firms in qualitative terms.
B) To prepare base for evaluation of work performance.
C) To co-ordinate organizational and managerial units of the firm.
D) To develop a strong appraisal of objectives and policies of firm.
MCQs 10: The process of budgeting does not establish a system of decentralization of authority.
MCQs 11: Cash budget is more helpful in those business concerns where there are
MCQs 12: While preparing a cash budget the focus should be on
Sources of cash inflow during a particular period
Amount of cash to be received from cash inflow sources
Timing of cash inflow
All of the above
MCQs 13: Flexible budget is that budget which presents __________ at various levels of business activity.
MCQs 14: Flexible budget is also known as
MCQs 15: When the actual cost is less than the standard cost, the difference is termed as
MCQs 16: The controllable variances are related with the
Internal and external policies of organization
External policies of organization
Internal polices of organization
None of the above
MCQs 17: The events like government policies, price rise etc have an impact on controllable variances.
MCQs 18: Management audit is useful for
MCQs 19: Responsibility Accounting is also known as
MCQs 20: Internal reporting provides financial statement and annual accounts.
MCQs 21: The use of management accounting is
MCQs 22: Which of the following statements are true?
A) Vertical Analysis is also termed as dynamic analysis.
B) Horizontal analysis is also termed as dynamic analysis.
C) Static Analysis is not extremely useful for the long-term financial planning.
MCQs 23: Which of the following statements are true?
A) Funds Flow statement is one of the ways to analyse & interpret financial statements.
B) Cash Flow Statement is one of the ways to analyse & interprets financial statements.
C) Common-size statement is one of the ways to analyse & interpret financial statements.
MCQs 24: Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum. The first installment will be paid at the end of year 5. Determine the amount of equal annual installments if Mr. X wishes to repay the amount in five installments.
MCQs 25: If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25% per annum, determine the frequency of compounding:
MCQs 26: Profit for the objective of calculating a ratio may be taken as
Profit before tax but after interest
Profit before interest and tax
Profit after interest and tax
All of the above
MCQs 27: Which of the following are limitations of ratio analysis?
A) Ratio analysis may result in false results if variations in price levels are not considered.
B) Ratio analysis ignores qualitative factors.
C) Ratio Analysis ignores quantitative factors.
D) Ratio Analysis is historical analysis.
MCQs 28: Which of the following falls under Profitability ratios?
A) General Profitability ratios
B) Overall Profitability ratios
C) Comprehensive Profitability ratios
MCQs 29: Which of the following transactions will result in inflow of funds?
A) Issue of debentures
B) Conversion of debentures into equity shares
C) Redemption of long term loan
D) Creation of General Reserve
MCQs 30: During the year, a business was bought by issue of Rs 25,000 debentures and Rs 25,000 shares. The business bought had machine worth Rs 20,000, Debtors Rs 15,000, Stock Rs 5,000 and Creditors Rs 5,000. Determine the effect of this transaction on flow of funds.
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