Management Accounting - 3
Match The Following
Question -Correct Answer
Accounting -Process of analyzing & interpretation
Profitability statement -Indicates the amount of profit earned
Balance-sheet -Financial status
Book-Keeping -Books of Accounts
Financial statement- Profitability statement & Balance-sheet
Multiple Choice Single Answer
Question Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C is an example of_______
Correct Answer Error of Commission
Multiple Choice Single Answer
Question Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i
Correct Answer Remuneration
True/False
Question To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition.
Correct Answer False
Select The Blank
Question Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads
Correct Answer actual , estimated
True/False
Question Income received in advance transfer to current liabilities
Correct Answer True
Your Answer True
Select The Blank
Question Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match
Correct Answer reasons , pass book
Select The Blank
Question Fixed cost is the cost that tend to remain ________ irrespective of ________
Correct Answer constant , level of activity
True/False
Question A business is an activity carried out with the intention of earning the profit.
Correct Answer True
Multiple Choice Single Answer
Question If wages for the month of January, February and March are Rs.4,000, Rs.4,400 and Rs.4,600 respectively and if delay in payment of wages is ½ month , payment of wages for the month of February is
Correct Answer 4,200
Select The Blank
Question Management Accounting has a very ________ scope and it requires ________ organizational structure
Correct Answer wide , elaborate
True/False
Question Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer True
Multiple Choice Single Answer
Question For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased
Correct Answer 3,15,000
Multiple Choice Multiple Answer
Question Important advantages of Uniform Costing can be said to be
Correct Answer It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units
Multiple Choice Multiple Answer
Question P/L A/C debit side includes
Correct Answer salary , discount allowed , postage & telegram
Multiple Choice Multiple Answer
Question Actual costs may be affected due to inefficient functioning such as
Correct Answer Abnormal expenses , In efficient use of labour , In efficient use of material
Multiple Choice Single Answer
Question Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500.
Correct Answer Rs.4500/- ( Favorable )
Multiple Choice Multiple Answer
Question Sales quantity may be forecasted after taking into consideration various factors such as
Correct Answer Analysis of past trends , Market research , Reports by salesmen
True/False
Question For taking make or buy decision marginal costing technique provide useful assistance.
Correct Answer True
True/False
Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False
Multiple Choice Single Answer
Question It is an appropriate basis of apportionment of depreciation expenditure
Correct Answer value of assets
True/False
Question The variable costs are controllable at the lower level.
Correct Answer True
True/False
Question Balance sheet indicates the expenditure & income from the business.
Correct Answer False
Match The Following
Question- Correct Answer
Journal- Book of original entry
Ledger -Maintain all types of Accounts
Assets- All the properties owned by the business
Liabilities- All the amount owed by the business
Drawing -Withdrawn for personal use
Select The Blank
Question A budget manual is a document setting out the ________ of the persons and ________ required for the budget control.
Correct Answer Responsibilities , Forms and procedures
True/False
Question Credit balances in all the Personal & Real accounts appear on asset side.
Correct Answer False
True/False
Question The process of accounting split into three steams i.e. financial, cost, management accounting.
Correct Answer True
Multiple Choice Single Answer
Question Omission of posting an amount in the ledger
Correct Answer Error of Omission
True/False
Question Non-operating / financial expenses are added while calculating net profit.
Correct Answer False
True/False
Question Balance sheet indicates the financial status of the business at given period.
Correct Answer True
Multiple Choice Multiple Answer
Question A Budget Manual may contain the following particulars
Correct Answer Duties and responsibilities of various executives , Functions and duties of Budget Officer , Scope of the Budget and area to be covered
Select The Blank
Question Semi ________ overheads are neither ________ nor variable in nature.
Correct Answer fixed
Your Answer variable
Correct Answer variable
True/False
Question Due to errors of principle the arithmetical accuracy of the trial balance does not get affected.
Correct Answer True
Multiple Choice Multiple Answer
Question Direct Cost includes
Correct Answer Direct material , Direct labour , Direct expenses
Select The Blank
Question Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement
Correct Answer historical, legal
True/False
Question Bin Card is having all the information of item received and issued.
Correct Answer False
Select The Blank
Question Budgetary Control is useful for ________-and ________-as a powerful tool in the hands of management
Correct Answer Cost control , Maximization of profits
True/False
Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.
Correct Answer True
Multiple Choice Multiple Answer
Question The material Requisition note contains
Correct Answer Number and date , Department demanding the material , Signature of the authority approving the demand
Multiple Choice Multiple Answer
Question Following error affect the trial balance
Correct Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger
Select The Blank
Question Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management
Correct Answer uncontrollable, lower
True/False
Question Budget is prepared for a fixed period of time.
Correct Answer True
Multiple Choice Single Answer
Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________
Correct Answer 12750
Multiple Choice Single Answer
Question This is not the non monetary incentive.
Correct Answer Co-partnership
Multiple Choice Multiple Answer
Question P/L A/C debit side includes
Correct Answer salary , discount allowed , postage & telegram
Select The Blank
Question Along with financial accounting, ________ and ________ are the other streams of accounting
Correct Answer Cost Accounting, Management Accounting
True/False
Question A very wide scope of Management Accounting is the limitation by itself.
Correct Answer True
Management Accounting - 2
True/False
Question
Credit balances in all the Personal & Real accounts appear on asset side.
Correct Answer
False
Multiple Choice Multiple Answer
Question
Contents of Uniform Cost Manual are
Correct Answer
Organization , Cost Accounting system , Presentation of information
Multiple Choice Multiple Answer
Question
Uniform Costing Methods may be advantageously applied to . . .
Correct Answer
Single organization having number of branches. , Number of companies in same industry , Similar Industries such as cotton, jute etc.
True/False
Question
1) Financial statements are basically in two forms i.e. profitability statement and balance sheet.
Correct Answer
True
Multiple Choice Multiple Answer
Question
The process of accounting has three streams of accounting ---------------,--------and ----------------------.
Correct Answer
Financial Accounting , Cost Accounting , Management Accounting
True/False
Question
Long term loan borrowed from financial institution comes under the heading of long term liabilities.
Correct Answer
True
Match The Following
Question
Correct Answer
Book-Keeping
Books of Accounts
Financial statement
Profitability statement & Balance-sheet
Accounting
Process of analyzing & interpretation
Profitability statement
Indicates the amount of profit earned
Balance-sheet
Financial status
Multiple Choice Single Answer
Question
Judge the statement according to the criteria given : ' The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January,
Correct Answer
The statement and its reason are both incorrect
Multiple Choice Multiple Answer
Question
Features of money measurement concept are . . .
Correct Answer
Only those transactions and facts are included expressed in terms of money are considered , Imposes severe restrictions on the kind of information available from financial statements , Works as a major drawback of financial accounting
Multiple Choice Single Answer
Question
The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations
Correct Answer
Management
Select The Blank
Question
________account can be defined as the record of all the transactions pertaining to a person, asset, liability income or expenditure which have taken place in a specified period.
Correct Answer
Ledger
Match The Following
Question
Correct Answer
Sunk Cost
Historical Cost
Cost Centre
Facilitate the fixation of responsibility
Cost Control
Process of controlling costs of operations
Differential Cost
Increase or Decrease in cost
Multiple Choice Multiple Answer
Question
Which of the following transactions should be excluded while preparing a cost sheet ?
Correct Answer
Interest on loan , Bad debts , Expenses on criminal law suit
True/False
Question
In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities.
Correct Answer
True
True/False
Question
Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein.
Correct Answer
False
True/False
Question
Primary distribution is effected on the basis of service rendered to the service departments by the production departments.
Correct Answer
False
Multiple Choice Multiple Answer
Question
Marginal costing is found to be unsuccessful in the following situations :-
Correct Answer
Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature
True/False
Question
Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein.
Correct Answer
False
Multiple Choice Multiple Answer
Question
Labour efficiency variance arises due to:
Correct Answer
Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material
True/False
Question
Financial Accounting discloses the financial performance & financial statements of the business as a whole.
Correct Answer
True
True/False
Question
Balance sheet indicates the expenditure & income from the business.
Correct Answer
False
Select The Blank
Question
The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________.
Correct Answer
Overhead
Select The Blank
Question
A person in charge of a ________ may be held responsible for its proper functioning and cost control.
Correct Answer
Cost centre
Multiple Choice Multiple Answer
Question
The organization chart shows the following aspects :
Correct Answer
Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers
True/False
Question
Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries.
Correct Answer
False
True/False
Question
P&L statement which is a period statement & relates to a certain period tells about results of operations.
Correct Answer
True
Select The Blank
Question
Depreciation charged on office furniture on straight line basis is an example of ________.
Correct Answer
Administration overheads
True/False
Question
Under time rate system a worker is paid on the basis of production achieved by him in a given time.
Correct Answer
False
Select The Blank
Question
Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting.
Correct Answer
Management
True/False
Question
Danger level for inventory of materials means the safety stock of inventory.
Correct Answer
False
True/False
Question
The role of the budget committee may be taken as an advisory role to the Chief Executive.
Correct Answer
True
Multiple Choice Multiple Answer
Question
The main advantages of profit sharing are :
Correct Answer
Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency
Select The Blank
Question
________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives.
Correct Answer
Management
Multiple Choice Multiple Answer
Question
Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost?
Correct Answer
The level of control of the used of material in the production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores
Multiple Choice Multiple Answer
Question
Management accounting is concerned with the following activities :
Correct Answer
Decision making , Safeguarding assets , Planning and controlling activities
Multiple Choice Multiple Answer
Question
Features of double entry accounting system are . . .
Correct Answer
Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit
Select The Blank
Question
Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.
Correct Answer
90% to 100%
True/False
Question
Maintenance Department is a service cost centre.
Correct Answer
True
True/False
Question
The process of accounting split into three steams i.e. financial, cost, management accounting.
Correct Answer
True
Select The Blank
Question
The difference between sales and cost of sales is termed as ________.
Correct Answer
Net Profit
Select The Blank
Question
The final result disclosed by trading account is the ________profit earned by the organization.
Correct Answer
Gross
Multiple Choice Multiple Answer
Question
Select the accounts to be disclosed on the liability side of the Balance sheet.
Correct Answer
Loan , Outstanding expenses , Creditors
True/False
Question
Penalty paid for delay in payment to creditors represents uncontrollable cost.
Correct Answer
False
Multiple Choice Single Answer
Question
Which document facilitates estimating material cost of a particular job, before completion of that job?
Correct Answer
Bill of material
Multiple Choice Single Answer
Question
Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit.
Correct Answer
The net profit will not be affected
Multiple Choice Single Answer
Question
It is said that adoption of uniform costing creates customer confidence because . . .
Correct Answer
Prices are reliable
Multiple Choice Single Answer
Question
An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004.
Correct Answer
The net profit will not be affected
Management Accounting - 1
Select The Blank
Question
Furniture account will always have a ________ balance.
Correct Answer
Debit
Multiple Choice Multiple Answer
Question
Accounting is the art where transactions are …
Correct Answer
Summarized , Classified , Recorded
True/False
Question
The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account.
Correct Answer
False
Select The Blank
Question
The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.
Correct Answer
Total variable overhead
True/False
Question
Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.
Correct Answer
True
Select The Blank
Question
The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc.
Correct Answer
Accounting period
True/False
Question
Standard costs are used for external reporting.
Correct Answer
False
True/False
Question
It is said that the income statement represents wealth increase /decrease for the organisation.
Correct Answer
True
Multiple Choice Single Answer
Question
Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads ?
Correct Answer
Rs.300,000/-
Multiple Choice Multiple Answer
Question
The factors to be considered while preparing the direct materials budget are :
Correct Answer
Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes
Multiple Choice Multiple Answer
Question
In which of the following situations, the flexible budget should be preferred?
Correct Answer
Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity
Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
Match The Following
Question
Correct Answer
Profit and loss account
Commission received
Dividend paid
Manufacturing account
Work in Progress
Land & Building
Balance Sheet
Land & Building
Closing stock of finished goods
Trading account
Closing stock of finished goods
Work in Progress
True/False
Question
While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored.
Correct Answer
False
Multiple Choice Multiple Answer
Question
If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional profits, then following steps can be taken to achieve the target profit
Correct Answer
Increase the selling price , Reduce cost of sales , Increase the selling efforts
Multiple Choice Multiple Answer
Question
From the following, select intangible assets:
Correct Answer
Goodwill , Patents , Trade Marks
True/False
Question
Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.
Correct Answer
True
Multiple Choice Single Answer
Question
Find the budget which is inadequate as a cost control technique :
Correct Answer
Fixed budget
True/False
Question
Predetermined rate of absorption of overheads helps in quick preparation of cost estimates and quoting prices.
Correct Answer
True
Multiple Choice Single Answer
Question
Net sales Rs,7,50,000/-, opening stock Rs.1,14,375/-, purchases Rs.483,375/- and closing stock Rs.1,47,750/-. Calculate the Gross Profit.
Correct Answer
Rs.3,00,000/-
Select The Blank
Question
________ is an example of intangible asset.
Correct Answer
Goodwill
True/False
Question
Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer
True
True/False
Question
Goods sent to the customers on approval basis should be treated as sales.
Correct Answer
False
Multiple Choice Multiple Answer
Question
Features of Sunk cost are . . .
Correct Answer
Indicates historical cost , Not relevant in decision making process , Incurred in past
True/False
Question
Profitability statement indicates the amount of assets & liabilities.
Correct Answer
False
True/False
Question
A business is an activity carried out with the intention of earning the profit.
Correct Answer
True
Multiple Choice Multiple Answer
Question
Identify the steps involved in selecting the optimum product mix, when the limiting factor is number of labour hours and sales demand.
Correct Answer
For each product find the contribution per unit and per labour hour , Award ranks to each of the products based on contribution per limiting factor , Priority is given to fulfill the market demand of the product which gives maximum contribution per labour hour.
Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
True/False
Question
The ideal budget period for a company engaged in generation and distribution of electricity is one year.
Correct Answer
False
Select The Blank
Question
The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year.
Correct Answer
Depreciation
True/False
Question
According to Reducing Balance Method, the depreciation is provided at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged.
Correct Answer
True
Select The Blank
Question
Crane expenses should be apportioned on the basis of ________.
Correct Answer
Number of hours crane worked in the department
Multiple Choice Multiple Answer
Question
Essentials for effective implementation of budgetary control system are
Correct Answer
Commitment of top management , Clearly defined objectives , Continous budget education
Multiple Choice Single Answer
Question
Commission payable to General Manager is 10 % of the net profits. If the net profit before charging commission is Rs.29,200/-, then what will be the amount of his net profit after commission?
Correct Answer
Rs.26,545.45
Select The Blank
Question
A forecast is mere estimate of what is likely to happen, but ________ is the action plan to be followed.
Correct Answer
Budget
True/False
Question
A very wide scope of Management Accounting is the limitation by itself.
Correct Answer
True
Select The Blank
Question
The combination in which different products are sold by a company is known as ________.
Correct Answer
Sales mix
Multiple Choice Single Answer
Question
The reporting method used in the costing system should be based on the principle of
Correct Answer
Management by exception
True/False
Question
Balance sheet indicates the financial status of the business at given period.
Correct Answer
True
Multiple Choice Single Answer
Question
The wages paid to maintenance department workers who do repair work principally for production departments but also on the vehicles in the distribuiton department shoud be charged as:
Correct Answer
Service costs
Multiple Choice Single Answer
Question
M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as
Select The Blank
Question
Measurement of ________ gives an idea of the degree of mobility of labour.
Correct Answer
Labour turnover
Multiple Choice Single Answer
Question
Net profit for the year before charging commission to the manager, is Rs.111,775/-. The manager of the company is entitled to commission @ 8% on net profits after charging commission. Find the amount of commission due to the manager.
Correct Answer
Rs.8,279.63
Match The Following
Question
Correct Answer
Total cost
Cost of finished goods
Non operating income
Profit on sale of investment
Selling and distribution overheads
Advertisement expenses
Factory overheads
Repair for factory building
True/False
Question
Control on purchase of material is exercised by the storekeeper.
Correct Answer
False
Multiple Choice Single Answer
Question
A company wishes to earn a 15% profit margin on selling price when quoting for a job. Which of the following is the profit margin of cost which will achieve the required profit margin ?
Correct Answer
0.1765
Select The Blank
Question
Economical use of labour, materials and facilities can achieved with the help of ________.
Correct Answer
Budgetary control
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