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Contents
1 MANAGEMENT ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 MANAGEMENT ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. MANAGEMENT ACCOUNTING
NARAYAN CHANGDER
1.1 MANAGEMENT ACCOUNTING
1. What is calculated in a Trading Account? D. Automation of presenting fuel informa-
A. closing Inventory (stock) tion and presenting BPP per engine
B. gross profit 5. Which of these describes collateral?

C. profit for the year /net profit A. damage done to someone
D. sales B. something of value used to secure a

loan
2. What does COGS stand for? C. something most people pay to the gov-
A. cost of goals scored ernment
B. cost of goods stocked D. a type of loan from a bank
C. cost of goods sold 6. The main purpose of cost Accounting is to

D. cost of goods solvent
A. Maximize profits
3. Sale of Raw Material Scrap should be sub- B. Help in inventory
tracted after calculating Works Cost.
C. Provide information to management
A. True for decision making
B. False D. Aid in the fixation of Selling price
4. What is the quick win in determining PT IP 7. Which one of the following is normally
pricing? classed as a variable cost for a ‘high
street’ photo print shop?
A. Subholdingisasi dan Cost Efficiency
A. Supervisor salary
B. Provision of comprehensive LK and
subholding B. Cost of the photo paper
C. Cost efficiency and automation of pre- C. Rent
senting fuel information D. Electricity used
1. B 2. C 3. B 4. D 5. B 6. C 7. B
1.1 MANAGEMENT ACCOUNTING 3
8. All of the following are needed to prepare 14. In flexible budgets, costs that remain
a flexible budget EXCEPT determining the: the same regardless of the output levels
within the relevant range are:

A. budgeted variable cost per output unit
B. budgeted fixed costs A. allocated costs
C. actual selling price per unit B. budgeted costs
D. actual quantity of output units C. fixed costs
9. Which product should we emphasise? D. variable costs
A. Customers
15. Internal Revenue Service (IRS)
B. Finance
A. Internal User
C. Management
B. External User
D. Marketing
10. Which item is important to consider when 16. Indirect expenses are also termed as
selecting a credit card? A. Direct Expenses
A. Annual Percentage Rate (APR) B. Administrative Expenses
B. Fees
C. Overheads
C. Both APR and fees
D. none of above
D. The look of the credit card
17. An Expense is
11. A profit centre is a centre
A. Where the manager has the responsi- A. An expense is defined as a decrease in
bility of generating and maximising profits assets which can be a distribution to the
owner
B. Which is concerned with earning an ad-
equate Return on Investment B. An expense is defined as an increase
in assets which can be a distribution to the
C. Both of the above
owner
D. Which manages cost
C. An expense is defined as a decrease
12. Indirect material used in production is clas- in assets which is not a distribution to the
sified as owner
A. Office overhead D. none of above
B. Selling overhead
18. Credit sales of Jump Ltd. for the year is
C. Distribution overhead |12, 00, 000 and debtors at the end of
D. Factory overhead year |2, 40, 000. Assuming 360 days in
a year, the average collection period will
13. What is a semi variable or semi fixed cost?
be-
A. cost which is fixed in nature
A. 60 Days
B. cost which is variable in nature
B. 72 days
C. cost which is partly fixed and partly
variablein nature C. 70 days
D. none of above D. 62 days
8. C 9. D 10. C 11. C 12. D 13. C 14. C 15. B 16. C 17. C 18. B 19. A
19. Using Absorption method, the overhead B. Can only be expressed with money
cost can be allotted to cost units. Below
C. Entire business
are the common cost unit used for absorp-
tion except D. Each business department
A. breakeven
B. unit produced 25. An unfavorable production-volume vari-
ance:
C. time basis
A. is not a good measure of a lost produc-
NARAYAN CHANGDER
D. blanket overhead
tion opportunity
20. A Profit is earned if? B. indicates that the company had re-
A. Assets exceed Expenditure duced its per unit fixed overhead cost to
B. Income exceeds Expenditure improve sales
C. Cash Inflow exceeds Cash Outflow C. measures the amount of extra fixed
costs planned for but not used
D. Income exceeds Liabilities
D. takes into account the effect of addi-
21. Which of the following is a basic feature
tional revenues due to maintaining higher
of a Management accounting system?
prices
A. Objective information
B. Highly aggregated data 26. Cost sheet does not include abnormal cost
C. Future oriented reports A. True
D. Both a and b B. False
22. The company receives cash from a bank
loan 27. Cash in hand
A. Assets (I) A. Revenue
B. Liabilities (D) B. Equity
C. Equity (D)
C. Asset
D. none of above
D. none of above
23. Marginal costing theory assumes that ev-
ery cost can be placed in one of the two 28. The labour rate variance can be calculated
categories costs or costs. by the following equation:
A. Direct, Indirect A. (Standard wage rate-actual wage rate)
B. Fixed, Variable x standard hours worked
C. Direct, Variable B. (Standard wage rate-actual wage rate)
D. Fixed, Indirect x actual hours worked
24. Information distribution management ac- C. (Standard hours-actual hours) x actual

counting: wage rate
A. Useful for economic and financial man- D. Budgeted labour costs-actual labour
agement work costs
20. B 21. C 22. A 23. B 24. D 25. C 26. A 27. C 28. C 29. B
29. Financial accounting: A. Material

A. focuses on the future and includes ac- B. Labour

tivities such as preparing next year’s op- C. Machinery
erating budget
D. Building
B. must comply with GAAP (generally ac-
cepted accounting principles) 33. The difference between net profit and
C. reports include detailed information gross profit is that net profit takes what
on the various operating segments of the into account?
business such asproduct lines or depart- A. Revenue
ments B. Expenses
D. is prepared for the use of department C. Taxes
heads and other employees
D. Assets
30. In an organization, working capital is |1,
00, 000 and current ratio 3:1. The value 34. Characteristics of responsibility accounting
of current assets is- system include all of the following except
that,
A. 1, 50, 000
A. Cost centers are responsible for rev-
B. 1, 00, 000 enues as well as common costs
C. 75, 000 B. The system should encourage em-
D. 50, 000 ployee involvement and participation
31. Diana Industries, Inc. (DII), developed C. Each level of management is respon-
standard costs for direct material and di- sible for its department’s operations and
rect labor. In 2010, DII estimated the employees
following standard costs for one of their D. Responsibility for performance accord-
major products, the 10-gallon plastic con- ing to budget must be linked to the appro-
tainer. Budgeted quantity Budgeted price priate authority
Direct materials 0.10 pounds $30 per
pound Direct labor 0.05 hours $15 per 35. The type or branch of accounting that gen-
hour During June, DII produced and sold erates reports for the use of external par-
10, 000 containers using 980 pounds of ties such as creditors, investors and gov-
direct materials at an average cost per ernment agencies is known as
pound of $32 and 500 direct manufactur- A. Financial accounting
ing labor-hours at an average wage of B. Managerial accounting
$15.25 per hour. June’s direct material
efficiency variance is: C. Tax accounting
A. $1, 860 unfavorable D. Forensic accounting
B. $600 favorable 36. In marginal costing profitability of each

C. $1, 360 favorable product is measured based on its
D. $600 unfavorable A. Cost
B. Contribution
32. Which of the following are variable costs?
Click on ALL the answers you think are cor- C. Profit
rect! D. None of the above
30. A 31. B 32. A 32. B 33. C 34. A 35. A 36. B

37. Assets = Liabilities + Owner’s Equity (Cap- in a project that would have returned a
ital) is known as which equation? total of $532, 000. In making the deci-
A. Expenses Equation sion to buy the model 240 machine rather
than the model 310 machine, the sunk cost
B. Accounting Equation was:
C. Financial Equation A. $545, 000
D. Cash Equation B. $450, 000
C. $527, 000
NARAYAN CHANGDER
38. What is the main purpose of the Dual As-
pect Convention in accounting? D. $532, 000
A. To treat the business and its owners 41. May include budgets and forecasts
as separate entities
A. Financial Accounting
B. To show assets on the balance sheet
B. Management Accounting
at their historic cost
C. To exercise caution in recognizing prof- 42. The term ‘Contribution’ refers to the
its and expected losses A. Excess of selling price over variable
D. To ensure that every financial transac- cost per unit
tion has two aspects affecting the balance B. Difference between the selling price
sheet and total cost
C. Subscription towards raising capital
39. The total profit at Break even point is
D. None of the above
A. The maximum company can ever attain
B. The minimum company can every at- 43. Which of the following principles means
tain not disclosing information to third parties
without authority
C. NIL
A. Objectivity
D. Negative
B. Integrity
40. Dominik Corporation purchased a machine C. Confidentiality
5 years ago for $527, 000 when it D. Competence
launched product M08Y. Unfortunately,
this machine has broken down and can- 44. BEP in rupees formula is
not be repaired. The machine could be re- A. Total Fixed cost/ contribution per unit
placed by a new model 310 machine cost-
B. total fixed cost /p /v ratio
ing $545, 000 or by a new model 240
machine costing $450, 000. Management C. Fc/contribution
has decided to buy the model 240 machine. D. none
It has less capacity than the model 310
machine, but its capacity is sufficient to 45. Which one in MRP is the order to delivery
continue making product M08Y. Manage- time?
ment also considered, but rejected, the al- A. production schedule
ternative of dropping product M08Y and B. lead time
not replacing the old machine. If that were
done, the $450, 000 invested in the new C. standard time
machine could instead have been invested D. none of above
37. B 38. D 39. C 40. C 41. B 42. A 43. C 44. B 45. B 46. A
46. Which of the following is an example of 50. Which 2 are characteristics of manage-
Income ment accounting?

A. Sales A. Have to be produced annually
B. Mortgage B. Analyses historic events to help pro-
C. Equipment duce forecasts
D. none of above C. Is always produced using accounting

standards
47. Determine working capital turnover ratio D. Is produced on an ad hoc basis when
if, current assets are Rs. 1, 50, 000 cur- required
rent liabilities are Rs. 1, 00, 000 and cost
of goods sold is Rs. 3, 00, 000 51. In October, Raddatz Inc. incurred $73,
A. 5 times 000 of direct labor costs and $6, 000 of
indirect labor costs. The journal entry to
B. 6 times record the accrual of these wages would
C. 3 times include a:
D. 2 times A. debit to Manufacturing Overhead of $6,
000
48. Bowden Corporation used the following
B. debit to Work in Process of $79, 000
data to evaluate their current operating
system. The company sells items for $20 C. credit to Manufacturing Overhead of
each and used a budgeted selling price of $6, 000
$20 per unit. Actual Budgeted Units sold D. credit to Work in Process of $79, 000
46, 000 units 45, 000 units Variable costs
$225, 400 $216, 000 Fixed costs $47, 52. The term fund means
500 $50, 000 What is the static-budget
variance of operating income? A. cash
A. $10, 600 favorable B. bank
B. $10, 600 unfavorable C. capital
C. $13, 100 favorable D. working capital
D. $13, 100 unfavorable 53. Purchases return is
49. . A company is planning to purchase a

machinery costing $500, 000 having use-
ful life of 5 years. Its cash flows for the
next 5 years will be as follows. Year Cash
flows 1 (200, 000) 2 300, 000 3 300,
000 4 500, 000 5 100, 000Calculate the
payback period.
A. 3 years 2 months A. Added to purchases
B. 4 years 2 months B. Subtracted from purchases
C. 3 years 9 months C. Added to revenue
D. 2 years 8 months D. Subtracted from revenue
47. B 48. C 49. A 50. B 50. D 51. A 52. D 53. B 54. D

54. If break even point in Unit is 4, 800 units C. Fixed Budget

and with budgeted sales being 5, 000 D. Production Budget
units, calculate the margin of safety? Explanation:Except Fixed Budget, Other
A. 500 units three budgets are functional budgets.
B. -800 units 59. Marketing manager
C. 800 units A. Internal User
D. 200 Units B. External User
NARAYAN CHANGDER
55. At the break-even point, 60. Target cost is $ 19, Estimated cost is $ 15.
A. total revenue equals variable cost. What is the difference $ 4 called as
B. total fixed cost equals variable cost. A. Difference
C. total contribution margin equals total B. Target cost
fixed cost. C. Target Cost gap
D. total margin of safety equals variable D. Gap
cost.
61. If Assets are $7, 300 and Liabilities are
56. Single entry system is suitable for con-
$500, how much is Capital?
cerns.
A. $7, 800
A. Big
B. $7, 300
B. Medium
C. $6, 800
C. Small
D. none of above
D. cooperatives
62. Purchased supplies on credit from XZE Sup-
57. A factory produces a single product with
plies $4400 incl. GST. Calculate the value
the following budgeted costs:Direct mate-
of GST.
rials £3.40 Direct labour £6.80 Variable
overheads £1.20 Fixed overheads £340, A. $40
000 Overheads are absorbed on the ma- B. $400
chine hour basis and it is estimated that in
C. $440
the next accounting period machine hours
will total 100, 000. Each unit requires two D. $444
hours of machine time. What is the cost
63. Cost unit is calculated as
per unit using:(a) Marginal Costing, (b) us-
ing Absorption Costing
A. £11.40b) £11.80
B. £11.80b) £11.40
C. £11.40b) £18.20
D. £18.20b) £11.40
58. Choose the odd one out

A. Sales budget
B. Labour Budget A. Total Expense/Quantity
55. C 56. C 57. C 58. C 59. A 60. C 61. C 62. B 63. C

B. Quantity/Total Cost B. Measurement

C. Total Cost/Quantity C. Forecasting

D. Quantity/Total Expense D. Ledger posting
64. What determines the degrees of freedom 69. The balance sheet shows the assets and li-
in pricing decision making? abilities of a business at a particular point
A. The price range in time.
B. The cost and demand conditions A. YES
C. The strategic objectives of the firm B. NO
D. The size and growth of the firm 70. Overhead refers to:
65. Given production is 1, 00, 000 units, fixed A. Direct or Prime Cost
cost is Rs. 2, 00, 000, Selling price is Rs.
B. All Indirect costs
10 per unit and variable cost is Rs. 6 per
unit. Determine profit C. only Factory indirect costs
A. Rs. 2, 00, 000 D. Only indirect expenses
B. Rs. 8, 00, 000
71. If margin of safety-20%, profit volume
C. Rs. 6, 00, 000 ratio-60%, Fixed cost = Rs.75, 000. Find
D. None of the above Actual sales.
A. Rs.1, 25, 000
66. A company should use cost-based transfer
prices: B. Rs. 1, 58, 000
A. when a company’s product is special- C. Rs. 1, 50, 250
ized D. Rs. 1, 56, 250
B. the market for the intermediate prod-
uct is perfectly competitive 72. The budget is prepared as a Blue Print of
activities in the period?
C. the interdependencies of subunits are
minimal A. Targeted
D. there is no benefit from market-based B. Previously
transfer price C. In progress
67. Cost of production-Administration over- D. Present and Future
head =
73. Does the following transaction result in
A. Prime Cost Change in Working Capital as per Funds
B. Cost of Sales flow statement?” Preliminary Expenses
C. Work Cost written Off”
D. Work in Progress A. Yes

B. No
68. All of the following are functions of Ac- Explanation:It neither affects current as-
counting except set nor current liability hence no change
A. Decision making in working capital.
64. A 65. A 66. A 67. C 68. D 69. A 70. B 71. D 72. A 73. B
74. Which of the following is least likely to be B. communicate financial and non-
the problem associated with payback pe- financial information to interested users
riod? so that they can make informed decisions
A. It does not consider time value of C. communicate non-financial informa-
money tion to interested users so that they can
make informed decisions
B. It does not consider whole project life
D. none of above
C. It neglects the cash flows after pay-
NARAYAN CHANGDER
back period 79. What is the difference between a loan and
D. It is difficult to calculate in practical sit- a grant?
uations A. you have to pay back a grant but not a
loan
75. Variable overhead costs can be managed
by: B. you borrow money for a loan and pay
money for a grant
A. reducing the consumption of the cost-
allocation base C. there is no difference
D. you have to pay back a loan, but not a
B. eliminating nonvalue-adding variable
grant
costs
C. planning for appropriate capacity lev- 80. Management accounting is?
els A. Subjective
D. Both A and B are correct. B. Objective
76. Which of the following groups would be C. Both A and B

least likely to receive detailed manage- D. None of the above
ment accounting reports?
81. Fixed Costs
A. Stockholder
A. are not directly linked to a particular
B. Sales head product or service
C. Production supervisor B. are directly linked to a particular prod-
D. Managers uct or service.
C. remain the same regardless of output
77. What is margin of safety if actual sales id levels
Rs. 20, 000 and BEP sales 15, 000
D. are costs that vary with the level of pro-
A. 35, 000 units duction.
B. 5000 units
82. Which of the following descriptors refers
C. Rs. 5000 to management accounting information?
D. Rs. 35, 000 A. It is verifiable and reliable
78. The purpose of accounting is to B. It is driven by rules
A. communicate information to inter- C. It is prepared for shareholders

ested users so that they can make in- D. It provides reasonable and timely esti-
formed decisions mates
74. D 75. D 76. A 77. C 78. B 79. D 80. A 81. C 82. D 83. B
83. According to Companies (Amendment) Act B. Priority Based Budgeting

2000, a company limited by share canis- C. Zero Based Budgeting
sue kinds of shares.

D. Rolling Budgeting
A. 1
B. 2 89. Which branch of accounting is primarily
concerned with the preparation of specific
C. 3
purpose financial statements for the man-
D. none of above agement to base financial decisions on?
84. Which type of loan does the gov’t. pay A. Auditing
the interest on while you are in school? B. Financial accounting
A. subsidized loan
C. Cost accounting
B. unsubsidized loan
D. Tax accounting
C. a grant
E. Management Accounting
D. perkins loan
90. Operating ratio is
85. The owner contributes her personal truck
to the business A. Cost of the production + Operating ex-
penses / Net revenue from operations.
A. Assets (NE)
B. Cost of revenue from operation + Op-
B. Liabilities (NE)
erating expenses / Net revenue from op-
C. Equity (D) erations.
D. none of above C. Cost of production / Net revenue from
operations.
86. Installation of new machinery
A. Capital Expenditure D. Cost of revenue from operations +
Selling expenses / Net revenue from op-
B. Revenue Expenditure erations.
87. Which of the following could be a reason 91. What is the cost unit for electricity cost?
for a favorable material price variance?
A. Kilowatt hours
A. the purchasing manager bargaining ef-
fectively with suppliers B. Liters
B. the purchasing manager giving orders C. Tons
for small quantity to reduce storage cost D. none of above
C. the purchasing manager accepting a
bid from the highest-priced supplier to en- 92. If you sold a dresser and were paid with
sure the quality of material a check, and you took it and deposited it
in the bank, this would be a to your
D. the personnel manager hiring under
account.
skilled workers
A. debit
88. If we start preparing a budget from
B. transition
scratch i.e with no account taken of the
previous period’s budget, this is known as C. balance
A. Incremental budgeting D. credit
84. A 85. B 86. A 87. A 88. C 89. E 90. B 91. A 92. D 93. A
93. Which of the following is not relevant A. i and ii

which making further processing decision?
B. ii and iii
A. Joint Cost
C. i, ii and iii
B. Further Processing Cost
D. i, ii and iv
C. Joint Cost and further processing cost
98. Which of the following ratio measures
D. none of above short term solvency of a business?
NARAYAN CHANGDER
94. A list of activities accompanied by infor- A. Liquidity ratios
mation that describes each activity is an B. Solvency ratios
activity
C. Activity ratios
A. manifesto
B. diary D. Profitability ratios
C. journal 99. Integrity is an ethical requirement for all

D. dictionary management accountants. One aspect of
integrity requires
95. Financial Accounting is used by Externals
or Shareholders, meanwhile Management A. Performance of professional duties in
Accounting is used by Internal or Manage- accordance with applicable laws
ment. Is the difference between Financial B. Avoidance of conflict of interest
Accounting and Management Accounting in
terms of? C. Refraining from improper use inside in-
formation
A. Frequency
D. Maintenance of an appropriate level of
B. Type of Information
professional competence
C. Primary Users
D. Time Focus 100. If Selling price is 250 and desired profit
is 50, then how much is target costing?
96. I have 40 units of inventory that cost
£3.00 (total £120) and I have just re- A. 220
ceived 20 more at £3.60 per unit. What B. 200
is the total number of units I have, and
the total cost if I use the AVCO method of C. 300
valuing inventory? D. None of these
A. 60 units @ £3.60 = £216
101. What do we call the amount of money (or
B. 60 units @ £3.30 = £198
income) that a company gets from its cus-
C. 60 units @ £3.20 = £192 tomers?
D. 40 units @ £3.00 = £120 A. Profit
97. Choose the various ways to start a busi- B. Revenue
ness.i. Buying an existing businessii. Run-
C. Cashflow
ning a franchiseiii. Inheriting a family busi-
nessiv. Establishing a new business D. Salary
CHECK GOOGLE PLAY BOOKS FOR ANSWERS KEYS

102. Which term of accounting is mainly con- 108. Marginal costs is taken as equal to
cerned with the preparation of specific pur-
A. Prime Cost plus all variable overheads
pose financial statements for the manage-

ment to base financial decisions on? B. Prime Cost minus all variable over-
A. Auditing heads
B. Financial accounting C. Variable overheads
C. Cost accounting D. None of the above
D. Tax accounting
109. Worker Co employs four supervisors to
E. Management Accounting
oversee the factory production of all its
103. Companies may determine standards by products. How would the salaries paid to
evaluating their capacity to enable goal these supervisors be classified
achievement, by listening to customers, by
A. As a direct labour cost
observing competitors or by benchmarking
other companies. B. As a direct production expense
A. True C. As a production overhead
B. False
D. As an administration overhead
104. The increase or decrease in the total cost
of a production run for making one addi- 110. Given selling price Rs. 20 per unit vari-
tional unit of an item is called able cost is 16 per unit contribution is
A. Adsorption Costing A. Rs. 2 per unit
B. Marginal Costing B. Rs. 8 per unit
C. Sunk cost
C. Rs. 4 per unit
D. ABC costing
105. The company repays the suppliers
A. Assets (D) 111. EXAMPLE OF PHYSICALLY-ORIENTED
B. Liabilities (I) A. USE OF WATER AND ENERGY
C. Equity (D) B. ENVIRONMENTAL COSTS
D. none of above
C. MATERIAL COSTS
106. Management accounting is needed most D. EARNINGS AND SAVINGS
by which type of user?
A. Internal users 112. Product costs would not include
B. External users A. materials used in making a hand-bag
107. Net Profit ratio is calculated by B. sales staff salaries
A. (Gross profit / Gross Sales) * 100 C. wages of a worker installing solar
B. (Gross profit / Net Sales) * 100 water-heaters
C. (Net profit / Net Sales) * 100 D. overheads assigned to the manufac-
D. None of the above ture of computer components

113. The management of sudharma Ltd the characteristics of their functional

analysing the profitability of the company units.
with the help of income statement is D. Management accounting has the main
A. Horizontal analysis functions of controlling management and
administration, calculating product sam-
B. Short term analysis
ple prices, controlling management and
C. External analysis reporting to external parties.
D. Internal analysis
NARAYAN CHANGDER
118. It is essential to know before embarking
114. Financial risks associated with the possi- on a project that requires a lot of invest-
bility of default by a counter-party. ments.
A. Credit risk A. Analyzing the Rate of Return
B. Liquidity risk B. Helping Understand Performance Vari-

ances
C. Interest risk
C. Forecasting Cash Flows
D. Foreign exchange risk
D. Helping in Make-or-buy Decisions
115. Accounts receivable
119. Current ratio is a
A. Liability
A. Solvency ratio
B. Asset B. Activity ratio
C. Owner’s equity C. Profitability ratio
D. none of above D. Liquidity ratio
116. A profit center is a center: 120. Concept:The actual amount paid for mer-
A. which manages cost. chandise or other items purchased is
recorded, even though the value of the as-
B. which is concerned with earning an ad-
set may be different
equate Return on Investment.
A. unit of measurement
C. where the manager has the responsi-
bility of generating and maximizing prof- B. historical cost
its. C. matching expenses with revenue
D. None of the answers are true. D. consistent reporting
117. Which of the following statements is cor- 121. Sale of stock of goods
rect: A. Capital Receipt
A. The information provided by manage- B. Revenue Receipt
ment accounting does not include budgets
incurred in the operating department 122. A company has a cost structure with rela-
B. The management accountant’s report- tive high fixed costs and relative low vari-
ing period is usually one year able cost per unit, for this company it is
most important to focus on:
C. Businesses can completely design
their own international accounting infor- A. Increasing volume
mation system network compatible with B. Increasing margin

123. To calculate an activity rate, the of C. reducing capital contributions

each activity must be determined. D. increasing loan payments

A. practical capacity
128. Which of the following is false
B. expenditure level
C. processing ratio A. Contribution = Sales-Variable Cost
D. value B. Contribution = Fixed Cost-Loss

C. MOS = BEP-Sales
124. A cost that changes directly with changes
in output D. BEP = Sales-MOS
A. Fixed cost 129. Find the odd one out
B. Variable cost A. Preliminary expenses written off
C. Semi Variable cost
B. Advertisement expenditure
D. Stepped cost
C. Discount on issue of shares
125. Bernson Corporation is using a predeter- D. Patents
mined overhead rate that was based on Explanation:Patent is an Intangible asset
estimated total fixed manufacturing over- whereas the other are Fictitious assets
head of $492, 000 and 30, 000 machine-
hours for the period. The company in- 130. Land, building and Machinery are
curred actual total fixed manufacturing
A. Assets
overhead of $517, 000 and 28, 300 to-
tal machine-hours during the period. The B. Liabilities
amount of manufacturing overhead that
would have been applied to all jobs during 131. The legal process of reducing or eliminat-
the period is closest to:(Round your inter- ing an amount owed is
mediate calculations to 2 decimal places.) A. allowance
A. $464, 120 B. budget
B. $492, 000 C. finance charge
C. $487, 703 D. bankruptcy
D. $25, 000
132. Which of the following is not an objective
126. What is the expected standard for cur- of management accounting?
rent ratio?
A. To provide information for decision
A. 1:2 making.
B. 2:1 B. To provide information for planning,
C. 2:3 controlling, evaluation & continuous im-
provement.
D. 1:3
C. To provide information for costing of
127. A business may prepare for a cash deficit services, products & other objects of in-
by: terest to management.
A. reducing planned profits D. To assists shareholders in making de-
B. reducing planned cash payments cision.

133. Which are associated with Process Cost- 138. contains the picture of total plans dur-
ing? ing the budget period and it comprises in-
A. Unit cost of items determined dividing formation relating to sales, profit, cost,
costs of production by number of units pro- production etc.a. b. c. d.
duced A. Master budget
B. Cost of job accumulated on job cost B. Functional budget
sheet
C. Cost budget
NARAYAN CHANGDER
C. Companies produce large quantities of
identical items D. None of the above
D. Companies produce goods to a cus- 139. Indirect costs are costs that can be easily
tomer’s unique specifications or accurately traced to a business activity.
134. A document that records the standard A. True
cost of a single unit of product is known B. False
as
A. Materials cost card 140. Find out throughput. when Sales $ 450,
Fixed cost-$ 200, Direct material cost-$
B. Standard cost card
150.
C. Product expense card
A. $ 300
D. none of above
B. $ 250
135. If Assets are $40, 000 and Liabilities are C. $ 600
$23, 000, how much is Capital?
D. $ 800
A. $63, 000
B. $17, 000 141. Which of the following is an example of
C. $23, 000 a tangible product?
D. none of above A. law n care

B. accounting services
136. In Accounting, Goods is defined as:
C. customer service
A. Items which purchased for own con-
sumption. D. computer
B. Items which are purchased for charity.
142. What happens if the price of a product is
C. Items which are purchased for resale. too high?
D. Items without any defect. A. High markup on variable cost but low
demand quantity
137. Fixed costs are costs that remain fixed or
constant regardless of the changes in pro- B. Low markup on variable cost but high
duction units but within a relevant range. demand quantity
This cost will continue to be incurred even C. High markup on fixed cost but low de-
when there is no production. mand quantity
A. True D. Low markup on fixed cost but high de-
B. False mand quantity

143. Debentures redeemable after 10 years 147. The share capital of A Ltd. stood at Rs 20,
from the date of issue are shown as 00, 000 in 2013 and at Rs 26 lac in 2014.
As per records, the company bought asset

A. Long-term borrowings
of another company for Rs 6 lac payable
B. Other long-term liabilities in fully paid shares. These assets included
C. Short-term borrowings Goodwill Rs 2, 00, 000 Machinery Rs 1,
D. Other short-term liabilities 83, 600 and Stock Rs 2, 16, 400. What
is the fund from issue of shares?
144. What are the advantages of management
A. Rs 2, 15, 600
accounting information?
A. Budgeted costs can be compared with B. Rs 2, 16, 400
actual costs so that costs can be con- C. Rs 2, 00, 000
trolled. D. None of the above
B. Budgeting helps in the planning, and
decision-making of a company. 148. Mark up is
C. Budgeting helps assess past events A. price = cost + a fair share of profit
within the company. B. the price a competitor sets
D. The actual cost per unit can be used to
149. In non-trading concerns, excess of income
fix the selling price.
over expenditure is called
145. If a company’s total fixed cost decreases A. Profit
by $10, 000, which of the following will
be true? B. Loss
A. The break-even point will increase C. Surplus

B. The break-even point will be un- D. Deficit
changed 150. Store manager
C. The variable cost ratio will be un-
A. Internal User
changed
B. External User
D. Only Bu Yani and God know
146. Management accounting deals with 151. What is responsibility accounting various
types, except?
A. Cost Center
B. Asset Center
C. Profit Center
D. Investment Center
152. Inventory ratio is a relationship between
A. Cost of goods purchased and cost of

A. Quantitative information
average inventory
B. Qualitative information
B. Cost of goods sold and cost of average
C. Both a and b inventory, and cost of goods purchased
D. None of the above and cost of average inventory.

C. Cost of goods sold and cost of average 158. A business problem can be solved by
inventory. choosing any one of the best and most
D. None of the options is correct. profitable alternative.
A. Revaluation Accounting
153. Single entry system is based on
B. Decision-making Accounting
A. Cash book and Personal account
C. Budgetary Control
B. Cash book and Real account
D. Management Information System
NARAYAN CHANGDER
C. cash book and Nominal account
D. All the 3 accounts 159. Variable Costs
A. are not directly linked to a particular
154. Who discovered the term Management product or service
Accounting?
B. are directly linked to a particular prod-
A. R. N Carter uct or service.
B. James H Bliss C. remain the same regardless of output
C. Philip Cotler levels
D. F.W. Taylor D. are costs that vary with the level of pro-
Explanation:James discovered the term duction.
Management through accounts, and he
contributed to accounting through his 160. Which of the following items is not in-
book with the same title. cluded in factory overhead?
A. Factory depreciation and supplies
155. Which of the following would be consid-
ered Capital income? B. Costs of Marketing departments
A. Monthly rent receieved C. Costs of Maintenance departments
B. Sales of fixed assets D. Costs of service departments
C. Discounts received 161. All of the following are advantages of im-

D. Receipts from cash sales plementing activity based costing EXCEPT
A. greater costing accuracy
156. Shut down point= fixed cost /P/v
ratio B. greater understanding of overhead
cost
A. Minimum fixed cost
C. allocate service center costs to pro-
B. Variable cost duction center
C. contribution D. easy interpretation of cost for internal
D. Semi-variable cost management
157. How does the company’s profitability 162. Which of the following is NOT a function
compare to other companies? of management?
A. Creditors A. Analyzing
B. Finance B. Directing
C. Management C. Organizing
D. Investors D. Planning

163. Debt to equity ratio establishes the rela- A. Costs that have not been planned for
tionship between B. Is not charged to the cost of produc-

A. Long-term debt (external equities) and tion; transferred to profit and loss ac-
current assets (internal equities). count
B. Long-term debt (external equities) and C. Is part of production costs
equity (internal equities), and long-term D. Not normally incurred at a given level
debt (external equities) and current as- of production
sets (internal equities).
C. Long-term debt (external equities) and 167. Select the characteristics of services.
equity (internal equities). (You can select more than one option)
D. None of the options are correct. A. Non-transferability
B. Homogeneous
164. carriage inward is recorded in
C. Heterogeneous
A. trading account credit side
D. Perishability
B. trading account debit side
C. profit and loss account debit side 168. What is a W-2?
D. profit and loss account credit side A. A cleaning solution
165. Management accountancy is a structure B. Form showing how much money you’ve
for made so far this year
C. Form from your employer that tells you
how much you’ve made and how much
you’ve paid in taxes in the last year
D. Form from the government for your ac-
countant
169. There are the relation between Financial

Accounting and Management Accounting,
except
A. Costing A. Controlling Financial Report
B. Accounting B. Classifying and Recording Transac-
C. Decision making tions
D. Management C. Information For Management Deci-
sion Making
166. Which of the following information is not
TRUE about abnormal cost? D. Preparing and Publishing Financial
Statements
170. Budgeting provides all of the following

EXCEPT:
A. a means to communicate the organiza-
tion’s short-term goals to its members
B. support for the management functions
of planning and coordination

C. a means to anticipate problems 176. Choose the correct option

D. an ethical framework for decision mak-
ing
171. Costs that remain fixed or constant, al-

though there are changes in output in a
given relevant range: A. 10410
B. 10440
A. variable cost
NARAYAN CHANGDER
C. 13410
B. fixed cost
D. 13440
C. mixed cost
177. There are the purpose of Management Ac-
D. semi-variable cost
counting, except
172. What are direct expenses also known A. To provide information to make in-
as? formed judment and decisons
A. Overhead expenses B. To provide information for control pur-
poses
B. Sundry expenses
C. To report financial information
C. Chargeable expenses D. To provide financial report
D. Major expenses
178. The process of identify, classify, record-
173. A budget prepared for variuos levels of ing and communicating business transac-
capacity is called tion is called as book-keeping.
A. True
A. fixed
B. False
B. cash
179. Tender is an estimation of units to be pro-
C. Master
duced
D. Flexible A. True
174. At break even point there is B. False
A. Minimum profit 180. Cost estimates are made on the basis of
B. Minimum loss A. Past experience
C. Maximum Profit B. Future anticipation
C. Both
D. No Profit nor loss
D. Intention
175. If Assets are $19, 500 and Capital is
181. Which of the following is not a non-
$14, 300, how much are Liabilities?
current asset
A. 33, 800
A. Fixed assets
B. $5, 200 B. Share capital
C. $19, 500 C. Long-term loans and advances
D. none of above D. Non-current investments

182. In the cost sheet, income from sale of C. Trading acccont

empty containers used for dispatch of the D. Income and expenditure account
goods produced shall be

A. Added to cost of production 188. Which of these statement on semi vari-
able cost is false
B. Deducted from cost of production
A. Semi-variable costs have properties of
C. Added to sales both variable and fixed elements attached
D. Ignored to the total cost
183. Which of the following is not a business B. High/low method is a ‘method of esti-
transaction? mating cost behaviour by comparing the
total cost associated with two different
A. Bought furniture of |10, 000 for busi- level of outputs.
ness
C. For semi-variable costs, the distinc-
B. Paid for salaries of employees |5, 000 tion between the fixed and variable costs
C. Paid son’s fees from her personal bank element is not important for decision-
account |20, 000 making purposes.
D. Paid son’s fees from the business |2, D. Cost estimation methods such as high-
000 low method, scatter diagram and re-
gression analysis are used to separate
184. Debtors is an element of
the fixed and variable elements in semi-
A. Current Asset variable costs.
B. Current Liabilities
189. Which of the following is a basic feature
C. Debt of a managerial accounting system?
D. CRR A. External audience
185. Funds Flow Statement holds significance B. Reports are current and future ori-
for ented
A. Shareholders C. Objective data only
B. Financiers D. Reports on the entire organization
C. Government 190. Budget is in nature
D. All of the above A. Prediction
186. Following is the role of management ac- B. Definitely
countant Except: C. Historical
A. Planning D. All true
B. Controlling
191. Among the following are non-funding
C. Coordinating sources.
D. Executing A. Issue of shares
187. Summary of assets and liabilities B. Sale of property
A. Profit and loss account C. Payment of tax
B. Balance Sheet D. Increase in debt

192. Cost of Goods Sold = Beginning Finished D. items that are purchased for long-term
Goods + Cost of Goods Manufactured- use by a business
Ending Finished Goods
198. A business provides the following infor-
A. True mation.What is the cost of sales?
B. False
C. none
D. both
NARAYAN CHANGDER
193. Management accounting is considered
successful when it
A. helps creditors evaluate the com-
pany’s performance
B. helps managers improve their deci-
sions A. $2000
C. is accurate B. $2100
D. is relevant and reported annually C. $7200
D. $8200
194. If total expenses exceed total revenue, a
net loss is reported 199. Given Net profit for the year Rs 2, 50,
000 Transferred to general reserves Rs
A. True
40, 000 and old machinery bought for Rs
B. False 50, 000 was sold for Rs 20, 000. Calcu-
late funds from operations.
195. Direct costs are costs that can be easily
traced to a business activity, for example, A. Rs 2, 80, 000
direct material cost or direct labour cost. B. Rs 2, 20, 000
A. True C. Rs 2, 90, 000
B. False D. Rs 3, 00, 000
196. Prepaid expenses is an element of 200. Please select the most appropriate an-
A. Quick Assets swer for the statement.A cost center and
a cost unit are the same
B. Non-quick Assets
A. YES. Both are used to ascertain cost
C. Quick Liabilities
B. YES. Both are used for cost control
D. Non-quick Liabilities
C. NO. Cost center is a section of the busi-
197. What are assets? ness to which costs are charged. Cost unit
helps to ascertain cost for a product or
A. items that are expected to be turned service.
into cash in the near future
D. none of above
B. items that are owned by or owed to a
business 201. This budget shows the units that must be
C. items that are owned by or owed by a produced to meet anticipated sales.
business A. Direct materials

B. Master B. Office Employees Salary

C. Sales C. Material Cost

D. Production D. All of the above
202. Income and expenditure Account is pre- 207. cost is decided scientifically.
pared A. Actual
A. By Non-for-profit Organization B. Standard
B. By Business Organization C. Flexed
C. By Industrial Organization D. Marginal
D. By All Organizations
208. Subscriptions received in cash during
203. The balance of property at cost has been the year |.5, 000. Amount received
Rs 20, 000 and Rs 17, 000 in 2013 and in advance for the next year is |.300
2014 respectively. The profit on sale of amount outstanding for current year was
property of Rs 2000 is credited to Capital |.400.The amount to credited to the in-
Reserves Account. New property costing come and Expenditure A/C
Rs 5000 bought in 2014. Determine sale A. |.4, 600
of proceeds from land.
B. |.4, 100
A. Rs 3000
C. |.4, 000
B. Rs 10, 000
D. |.5, 100
C. Rs 7000
D. Rs 15, 000 209. Budget is prepared for following period
A. Monthly
204. general reserve is created on the basis of
convention of B. 6 months
A. conservatism C. 12 months
B. uniformity D. for any period
C. materiality 210. Turnover ratios measure

D. full disclosure A. profitability
205. Under a job-order costing system, the B. solvency

dollar amount transferred from Work in C. activity levels
Process to Finished Goods is the sum of D. sales turnover
the costs charged to all jobs:
A. started in process during the period. 211. It is used to management in the discharge
of its basic functions of forecasting, plan-
B. in process during the period. ning, coordination, communication and con-
C. completed and sold during the period. trol.
D. completed during the period. A. Statistical Techniques
206. Which of the following is not a period B. Ratio Analysis

cost? C. Historical Cost Accounting
A. Rent D. Decision-making Accounting

212. Prepare of cash flow statement 217. Which of the following is a period cost?
A. Mandatory A. the production supervisor’s salary
B. Recommendatory B. direct labor
C. Required under the companies act C. property taxes on the office building
D. property taxes on the production facil-
D. None of these.
ities
213. Current assets does not include 218. The wealth maximization to the share-
NARAYAN CHANGDER
A. Cash holders will be delivered by:
B. Preliminary expenses A. Dividend payments
B. Increase in market value of shares
C. Prepaid expenses
C. Both of the above
D. Bank
Explanation:Preliminary expenses is a Fic- D. None of the above
titious asset. 219. Sale of office equipment
214. What is the third level of pricing decision A. Revenue Receipt
making? B. Capital Receipt
A. Operational decision making 220. Which of the following statements are
B. Strategic decision making true?
C. Tactical decision making
D. Market strategy decision making
215. Financial Failures such as Wirecard, Enron A. 1 and 2 only

and WorldCom are result of: B. 1 and 3 only
A. failure in the corporate governance C. 2 and 3 only
structure. D. 1, 2 and 3
B. faults in the Public Accounting Profes-
221. An important aspect of CIA is the recogni-
sion.
tion that cash flows received in later years
C. greedy professionals and manage- have value than those received in ear-
ment. lier years.
D. All options are correct. A. Less
B. Equal
216. Management accounting
C. More
A. is more concerned with the future than
D. none of above
is financial accounting.
B. is less concerned with segments of a 222. Litres were used to ascertain cost of
company than is financial accounting. A. Sugar
C. is more constrained by rules and regu- B. Flour
lations than is financial accounting. C. Cooking oil
D. all of the above are true. D. Petrol

223. Unskilled 12000 hours required for a A. Decision Making

new contract. Current Workforce is fully B. Planning
utilised.Rate per hour is Rs.2.What is rel-

evant labour cost? C. Control
D. All of the Above
A. nil
B. 24000 228. capital + drawings =net capital
recorded in liablities
C. 6000
A. gross profit
D. 12000
B. net profit
224. What are the 4 activities involved in man- C. dividend
agement accounting?
D. purchases
A. Planning, Controlling, Organising, De-
cision Making 229. Which is not the limitation of manage-
ment accounting?
B. Planning, Organising, Decision Making,
Controlling A. Lack of Knowledge
B. Effect of time factor
C. Planning, Organising, Controlling, De-
cision Making C. need of continuity
D. Organising, Planning, Controlling, De- D. Determination of objects
cision Making 230. The success of any business depends
225. The following statements have been upon the proper
made about Cost-Volume-Profit analy- A. Organizing
sis:(1) CVP analysis allows for fluctuating B. Planning
selling prices. (2) CVP analysis assumes
C. Timing
productivity remains unchanged. (3) CVP
analysis assumes that the only factor af- D. none of above
fecting cost is volume. Which of the above 231. The ascertainment of costs after they
statements is/are true? have been incurred is known as
A. only A. Marginal costing
B. only B. Historical costing
C. , (2) and (3) C. Sunk cost
D. and (3) only D. Notional cost
226. One method of absorption of overheads 232. The net profit of a company is |2, 00,
is 000, preference dividend |25, 000, and
A. cost sheet taxes paid |15, 000. The number of eq-
uity shares is 1, 00, 000. The earnings
B. machine hour rate per share (EPS) is-
C. apportionment A. 1.6
D. ratio analysis B. 1.7
227. Management accounting assists the man- C. 1.8
agement D. 1.9

233. Which TWO of the following statements based on direct labor-hours. At the be-
about qualities of good information are ginning of the current year, the company
true? had made the following estimates:(see the
A. It should be relevant for its purposes picture)The amount of overhead applied in
the Machining Department to Job A803 is
B. It should be communicated to the right closest to:(Round your intermediate calcu-
person lations to 2 decimal places.)
C. It should be completely accurate
NARAYAN CHANGDER
D. It should be provided whatever the
cost
234. Drawings
A. $828.00
A. Expense
B. $792.00
B. Asset
C. $171.00
C. Owner’s Equity
D. $174, 800.00
D. none of above
238. Which of the following is NOT a benefit
235. Which method of budgeting is usually of using a budget?
used to manage indirect costs within pro- A. A budget can help you decide the im-
duction? portance of your expenses.
A. Priority Based Budgeting B. A budget can help you keep track of
your money.
B. Incremental Budgeting
C. A budget can help you make plans to
C. Zero Based Budgeting
reach your financial goals.
D. Activity Based Budgeting D. A budget can help you purchase any-
thing you want.
236. Liquid assets are determined by
A. Current Assets-Stock-prepaid ex- 239. Financial accounting includes bookkeep-
penses ing; management accounting includes cost-
ing
B. Current Assets + Stock + prepaid ex-
A. True
penses
B. False
C. Current Assets + prepaid expenses
240. purchasing an asset would be an example
of
237. Vanliere Corporation has two produc- A. cash inflow
tion departments, Machining and Finish- B. cash outflow
ing. The company uses a job-order cost-
ing system and computes a predetermined 241. The sum of all direct expenses is called
overhead rate in each production depart- A. chargeable cost
ment. The Machining Department’s pre-
B. cost of goods sold
determined overhead rate is based on
machine-hours and the Finishing Depart- C. prime cost
ment’s predetermined overhead rate is D. overaheads

242. Sales return is B. Expense

C. Asset

D. Liability
246. At the point of break-even

A. Contribution = Fixed Costs
B. Profit = Revenue
C. Fixed Costs = Variable Costs
D. Contribution = Profit
A. Added to purchases 247. Management accounting assists the Man-

B. Subtracted from purchases agement
C. Added to revenue A. In planning, direction and control
D. Subtracted from revenue B. Only in planning
C. Only in direction
243. Which is not included in the recognizing
and measuring impacts of using Environ- D. Only in control
mental Management Accounting (EMA)
248. Increase in amount of prepaid expense re-
A. ECONOMIC IMPACTS sult in
B. COSTS IMPACTS A. Increase in cash
C. ENVIRONMENTAL IMPACTS B. Decrease in cash
D. SOCIAL IMPACTS C. No change in cash
244. Which of the following statements is/are D. none of above
correct?(i) A management control system
is a term used to describe the hardware 249. What is a W-4 used for?
and software used to drive a database A. shoot deer
system which produces information out- B. withhold 4 paychecks for employees
puts that are easily assimilated by man-
agement.(ii) An objective is a course of ac- C. employees to fill out number of with-
tion that an organisation might pursue in holdings for taxes
order to achieve its strategy.(iii) Informa- D. employers to fill out on employees
tion is data that has been processed into a
form meaningful to the recipient. 250. The scare factors is also known as
A. (i), (ii) and (iii) A. Key factor
B. (i) and (iii) B. Abnormal factor
C. (ii) and (iii) C. Linking factor
D. (iii) only D. None of the above
245. What is the classification of Rent Ex- 251. The purpose of management accounting is
pense? to
A. Revenue A. Help banks make decisions

B. Past orientation A. When you need a loan, you’ll have

C. Help investors make decision more loan offers to pick from.
D. Help managers make decisions B. You’ll get better interest rates on your
loans.
252. A report analyzing the changes in the fi- C. It will be easier to get an apartment.
nancial condition of a business between
two periods on the basis of working capi- D. You’ll get accepted to better education
tal is called institutions.
NARAYAN CHANGDER
A. Comparative reports 257. liquid assets mean
B. Analysis of Ratios A. current assets-stock-prepaid ex-
C. Funds flow reports penses
D. Which is not B. only stock

C. cash + marketable securities
253. Managerial accounting may be thought of
as the reporting of past financial perfor- D. all of the above
mance and financial accounting as the esti-
258. Tera manufacturing expenses 50% capac-
mation of future financial outcomes.
ity produces 10000 units for 80 % capac-
A. TRUE ity what will be the units?
B. FALSE A. 15000
254. Cash and cash equivalents does not in- B. 20000

clude C. 16000
A. Cheques D. 18000
B. Balance with banks
259. Who is responsible to ensure that finan-
C. Bank deposits with more than 12 cial statements are free from material mis-
months maturity statements
D. Inventories A. External Auditors
255. THE FOLLOWING IS INFORMATION TO B. Independent Directors

BE BASED IN MANAGEMENT DECISION C. Board of Directors
MAKING PRESENTED IN ENVIRONMEN-
D. Stakeholders
TAL MANAGEMENT ACCOUNTING, EXCEPT
260. The formula for Margin of Safety is?
A. INFORMATION BASED ON MATERIAL A. Profit/PV Ratio
AND ENERGY FLOWS
B. Fixed Cost/PV Ratio
B. INFORMATION BASED ON ENVIRON-
MENTAL COSTS C. BEP/PV Ratio
C. MEASURABLE INFORMATION D. None of the above
D. UNMEASURABLE INFORMATION 261. Financial Institution
256. What is NOT a benefit of having a good A. Internal Users

credit score? B. External Users

262. Concept:When a business activity is large C. B, A, C

enough to impact business decisions, it D. C, A, B
should be recorded clearly in the financial

statements 268. This method of budgeting can ignore pre-
vious budgets and it looks at the main aims
A. realization of revenue
of the businesses and focuses on those.
B. materiality This is
C. unit of measurement A. Incremental Budgeting
D. consistent reporting B. Activity Based Budgeting
263. discount allowed will be recorded in C. Zero Based Budgeting
A. trading account debit side D. Priority Based Budgeting
B. trading account credit side 269. Plant utilization budget and Manufactur-
C. profit and loss account debit side ing overhead budgets are types of
A. Production budget
D. profit and loss account credit side
B. Sales budget
264. The statements are produced for share-
C. Cost budget
holders
B. Management Accounting 270. Which of the following is not the tool of
Management accounting?
265. Every transaction that records both debit A. Human Resources accounting
and credit entry is:
B. Budgetary Control
A. Single entry system of book-keeping
C. Standard Costing
B. Double Entry system of book-keeping
D. Decision accounting
C. Cash basisof accounting
271. Management accounting is mostly ap-
D. accrual basis
plied in which of the following organiza-
266. The salary paid to the president of a com- tions:
pany would be classified on the income A. Organization with revenue potential.
statement as a(n): B. Feature governance bodies
A. administrative expense. C. Humanitarian deployment organiza-
B. direct labor cost. tions
C. manufacturing overhead cost. D. All of the above implementing organi-
zations
D. selling expense.
272. The company purchases equipment with
267. Available Machine Hours are 2000 hours.
its cash
Product A, B and C gives contribution of
Rs.2, 6 and 4 per MH respectively. Rank A. Assets (NE)
them in preference of production. B. Liabilities (I)
A. B, C, A C. Equity (I)
B. A, C, B D. none of above

273. Which TWO of the following are primary 277. Which of the following is not included in
sources of data? the operating budget?
A. Historical records of transport costs A. Sales Budget
to be used to prepare forecasts for bud- B. Cost of good sold budget
getary planning C. Direct labor budget
B. The Annual Abstracts of Statistics, pub- D. Cash inflow budget
lished by the Office for National Statistics
in the United Kingdom 278. Machinery
NARAYAN CHANGDER
C. Data collected by a bank in a telephone A. Owner’s Equity
survey to monitor the effectiveness of the B. Asset
bank’s customer services C. Liability
D. Focus group feedback about potential D. none of above
flavours of a new biscuits
279. 1) Which one of the following is a with-
274. Identify the following characteristics of drawal account?
management in business which isNOT A. Cash account
TRUE. B. Dividend account
A. It is a process or series of continuing C. Salaries account
and related activities. D. Capital account
B. It involves and concentrates on reach-
280. When the Marriott decided to improve
ing organizational goals.
the quality of service it offered its cus-
C. It reaches these goals by working with tomers, it asked special corporate guests
and through people and otherorganiza- to comment on the good and bad issues of
tional resources their stay and also to advise what the com-
D. It includes every form of trade, competition is doing better than the Marriott.
merce, craftsmanship, occupation, pro- The Marriott used:
fession or other activities that is carried A. information processing
out B. mirroring
275. The primary objective of just-in-time pro- C. data decentralisation

cessing is to D. benchmarking
A. accumulate overhead in activity cost 281. Choose the correct option
pools
B. eliminate or reduce all manufacturing
inventories
C. identify relevant activity cost drivers
D. none of them
A. Simple bar chart
276. Revenue DECREASES owners equity. B. Multiple bar chart
A. True C. Component bar chart
B. False D. Warhead

282. Which of the following relates to manage- 000InvetoriesJune 1:Finished Goods P68,
ment advisory services by CPAs? 000Work in Process P110, 000Direct Ma-
terials P52, 000June 30:Finished goods

A. Cost analysis of major investment de-
cisions P56, 000Work in Process P135, 000Di-
rect Materials P44, 000Annabelle Com-
B. Design and/or installation of account- pany applied factory overhead to produc-
ing systems tion at 80% of direct labor cost. Over-or
C. Financial analysis for project feasibil- underapplied overhead is closed to cost of
ity studies goods sold at year-end. The company’s ac-
counting period is on the calendar year ba-
D. All of the above
sis.The cost of goods sold for the month of
283. A flexible budget is June should be increased or decreased by
the amount of over/under applied factory
A. Budget for different Departments
overhead of
B. Budget for different capacity levels
A. 20, 000 increase
C. Budget for receipts and payments B. 20, 000 decrease
D. none of above C. 120, 000 decrease
284. 1 Which of the following does not rep- D. 0
resents the characteristics of Management
Accounting? 287. Audit fees paid to auditors is part of
A. Helps in finding out cost of products A. Administration Cost

and control costs B. Production cost
B. Measures the operating efficiency of C. Selling & Distribution cost
the enterprise D. Not shown in cost sheet
C. Helps in identifying the financial posi-
288. When preparing Financial Statements
tion of the business
which monetary measurement basis states
D. Process of determining and accumulat- that the accounting records should be
ing the cost of products or activity based on the original cost of the transac-
tion.
285. Which method of budgeting uses the pre-
vious period’s budget as a base for the cur- A. Current Value
rent budget? B. Replacement Value
A. Zero Based Budgeting C. Realisation Value
B. Activity Based Budgeting D. Historical Cost
C. Incremental Budgeting
289. Owner’s capital and sales decrease with
D. Rolling Budgets a
286. Data about Anabelle Company’s produc- A. debit

tion and inventories for the month of June B. credit
are as follows:Purchases-direct materials
P143, 440Freight in P5, 000Purchase re- 290. closing stock is recorded in trading ac-
turns and allowances P2, 440Direct Labor count and
P175, 000Actual Factory Overhead P120, A. balancesheet liablity side

B. balancesheet asset side 295. The use of management accounting is

C. profit and loss account
D. trading account debit side
291. A series of fixed budget set for different

levels
A. Set of Fixed budget
NARAYAN CHANGDER
B. Fixed budget sets A. Optional
C. Flexible budget B. Compulsory
D. Master budget C. Legally obligatory

D. Compulsory to some and optional to
292. Oerther Corporation reports that at an ac- others
tivity level of 5, 000 units, its total vari-
able cost is $131, 750 and its total fixed 296. Formula for Gross profit ratio
cost is $31, 200. What would be the aver- A. Gross profit/Gross sales X100
age fixed cost per unit at an activity level
of 5, 200 units? Assume that this level of B. Gross profit/Net sales X100
activity is within the relevant range. C. Operating profit/Net sales X100
A. $6.24 D. Gross profit/Operating profitX100
B. $6.00 297. Costs are subdivided into what two ma-
C. $14.94 jor functional categories?
D. $32.59 A. opportunity and allocation

B. fixed and variable
293. Which of these is not an objective of Cost C. product and non-production
Accounting?
D. direct and indirect
A. Ascertainment of Cost
298. Which would appear in a Statement of Fi-
B. Determination of Selling Price
nancial Position?
C. Cost Control and Cost reduction
A. closing inventory
D. Assisting Shareholders in decision B. cost of sales
making
C. opening inventory
294. Choose the most appropriate answer for D. sales
the question.Why management of a com-
pany need to know the cost of a product? 299. Crich Corporation uses direct labor-hours
in its predetermined overhead rate. At the
A. To make the products famous
beginning of the year, the estimated di-
B. To determine the selling price rect labor-hours were 21, 800 hours and
the total estimated manufacturing over-
C. To determine the GST
head was $497, 040. At the end of the
D. To promote the product in social media year, actual direct labor-hours for the year

were 21, 500 hours and the actual manu- A. RM72, 000
facturing overhead for the year was $492, B. RM90, 000
040. Overhead at the end of the year

C. RM108, 000
was:(Round your intermediate calculations
to 2 decimal places.) D. RM180, 000
A. $6, 840 overapplied 304. The term standard cost refers to the
B. $6, 840 underapplied A. average unit cost of product produced
C. $1, 840 underapplied in the previous period
B. budgeted unit cost of product pro-
D. $1, 840 overapplied
duced in a particular period
300. What is the meaning of objectivity based C. average unit cost of product produced
on IMA code of ethics? by other companies
A. Communicate informations fairly and D. average unit cost of product produced
disclose all information that might be use- in the current period
ful to management
305. As discussed in the class, Profit and Loss
B. Communicate informations fairly and account is like a photograph of a person
don’t disclose all information that might
A. True
be useful to management
B. False
C. Communicate informations slowly and
disclose all information that might be use- 306. Management accounting maintains
ful to management A. Journal
D. Communicate informations fastly and B. Ledger
disclose all information that might be use-
C. Trial Balance
ful to management
D. None of these
301. The control process begins when man-
agers set goals. 307. Direct Costs
A. True A. are not directly linked to a particular

product or service
B. False
302. Profit on sale of machinery is uct or service.
A. Operating expense C. remain the same regardless of output
levels
B. Non-operating expense
D. are costs that vary with the level of pro-
C. Operating Income duction.
D. Non-operating Income
308. Opening balance of debtors |.30, 000
303. Jexerlin Berhad’s activity cost pools is cash received |.1, 00, 000 credit sales
machine hours, with estimated overhead |90, 000 closing balance of debtors is
of RM180, 000. The company produces A. |.30, 000
coffee tables (400 machine hours) and din-
B. |.1, 30, 000
ing tables (600 machine hours). How
much of the overhead should be assigned C. |.40, 000
to coffee table? D. |.20, 000

309. Management Accounting is useful for tak- C. Qualitative data are data that cannot
ing be measured
A. Operational Decisions D. Population data are data arising as a
B. Routine Decisions result of investigating a group or objects
C. Policy Decisions 315. Management accounting deals with
D. All the Above
A. Qualitative
310. In Management accounting, an emphasis
NARAYAN CHANGDER
B. Quantitative
and focus must be
C. Both A and B
A. future oriented
B. past oriented D. None of the Above
C. Communication oriented 316. Miguel is a wholesaler who sells furni-

D. bank oriented ture to retailers. Which of the following
is a revenue receipt?
311. Which of the following is NOT a level of
Maslow’s hierarchy of needs? A. Income received from the sale of furni-
ture
A. Self-actualization
B. Income received from the sale of old
B. Self-esteem
office equipment
C. Personal interest
C. Capital introduced into the business by
D. Safety the owner
312. The overheads cost of a firm at 12, 000 D. A loan received from the bank for ex-
output is Rs. 1, 00, 000 and at 14, 000 pansion of the showroom
is Rs. 1, 20, 000. Whats type of cost is
this based on behaviour? 317. The following information is available
A. fixed for plastic grade RX3:* Annual demand-
225, 000 kilograms * Annual holding cost
B. variable per kilogram-£0.50 * Fixed ordering cost-
C. semi variable £2.50
D. none of above A. 1, 600 kg
313. Furniture B. 1, 500 kg
A. Expense C. 1, 420 kg
B. Asset D. 1, 300 kg
C. Liability
318. The accounting standard for Cash flow
D. none of above
statement
314. Which TWO of the following statements A. AS-2
regarding different types of data are true?
B. AS-4
A. Secondary data are data collected es-
pecially for a specific purpose C. AS-3
B. Discrete data can take on any value D. AS-5

319. Prime cost is calculated as: C. Economics Order Quantity

A. Direct Material+Direct Labour+Direct D. Ergonomics Order Quantity

Expense
324. Management’s operating & financial
B. Direct Labour-DirectExpense plans for a specified period, including
C. Direct Expense+overheads budged financial reports is expressed in:
D. Direct Cost + Indirect Cost A. Cash Budget
B. Master Budget
320. Valvano Corporation uses a job-order
costing system with a single plantwide C. Production Budget
predetermined overhead rate based on D. Sales Budget
machine-hours. The company based its
325. At a sales volume of 40, 000 units, Lon-
predetermined overhead rate for the cur-
nie Company’s total fixed costs are $40,
rent year on total fixed manufacturing
000 and total variable costs are $60, 000.
overhead cost of $440, 000, variable man-
The relevant range is 30, 000 to 50, 000
ufacturing overhead of $2.20 per machine-
units. If Lonnie were to sell 42, 000 units,
hour, and 50, 000 machine-hours. The es-
the total expected cost would be:
timated total manufacturing overhead is
closest to: A. $105, 000
A. $440, 000 B. $100, 000
B. $110, 000 C. $103, 000
C. $440, 002 D. $102, 000
D. $550, 000 326. Drawings by Proprietor in cash out flow

from
321. Manaement accounting is highley sensi-
A. Operating
tive to-
B. Financing
A. Government needs
C. Investing
B. Investors needs
D. Trading activities
C. Management needs
D. Towards all these needs 327. Concept:Revenue is recorded at the same
time goods or services are sold.
322. The P/V Ratio is 40% and the Selling A. realization of revenue
Price per unit 40, then the Variable cost
B. the revenue principle
per unit is
C. going concern
A. 16
D. historical cost
B. 24
C. 54 328. The use of Management accounting is-
A. Compulsory
D. 10
B. Legally obligatory
323. What is EOQ?
C. optional
A. Economics Order Quality D. compulsory to some and optional to
B. Economics Output Order other

329. Cash flows include 334. Capital is the money invested by the
A. Cash receipts only owner of the business. But it is shown in
the liability side of Balance sheet because
B. Cash payments only of
C. Cash receipts and payment A. Conservatism Concepts
D. Cash and non-cash incomes and ex- B. Separate Entity Concept
penses.
C. Cost Concept
NARAYAN CHANGDER
330. Quick assets are equal to
D. Going Concern Concept
A. Current Assets
335. if the total cost of 100 units is Rs. 5,
B. Current Assets less stock and prepaid
000 and those of 101 units is Rs. 5, 040
expenses
then increase of Rs. 40 in total cost is
C. Current Assets plus Stock and prepaid
A. Marginal cost
expenses
B. Prime cost
D. Stock and prepaid expenses
C. Fixed cost
331. If Capital is $31, 400 and Liabilities are
$15, 500, how much are Assets? D. None of the above
A. $46, 900 336. sale of finished goods will be recorded in

B. $15, 500 A. trading account debit side
C. $15, 900 B. profit and loss account debit side
D. none of above C. profit and loss account credit side
332. is / are cash inflows D. trading account credit side
A. Decrease in debtors 337. Which 2 are characteristics of manage-
B. Increase in creditor ment accounting?
C. Decrease in stock A. Must be presented as specified in the
D. All of the above Companies Act and accounting standards
B. Helps managers run the business on a
333. Find out the missing phase in life cycle day to day basis
stages.
C. Used as the basis for the calculation of
the organisation’s tax charge
D. Can include anything that managers
feel is useful for the business
338. Which of the following statements would

be best suited to represent the relation-
ship between a company’s advertising ex-
A. Saturation penditure and its sales revenue? 1 A pie
B. Launch chart2 A bar chart3 A scatter graph
C. Growth A. 1 only
D. Peak B. 2 only

C. 3 only 344. Opening payables are £10, 000, in-

D. 2 and 3 only voices received are £25, 000 and closing
payables are £7, 000. What is the pay-

339. Purchases from a supplier on credit is a ments to suppliers in our cash budget?
liability. A. £42, 000
A. True B. £28, 000
B. False C. £22, 000
D. £25, 000
340. For the financial year ended 31st March
2015, the figures extracted from the bal- 345. Information users of management ac-
ance sheet of Excel Ltd. are as un- counting are mostly:
der:Opening stock |29, 000 Closing stock A. Managers at all levels of the Enter-
|31, 000 Purchases |2, 42, 000 The stock prise
turnover ratio will be-
B. State administrative agencies
A. 12 Times
C. Tax authorities
B. 8 Times
D. All of the above implementing organi-
C. 4 Times zations
D. 2 Times 346. Break-even revenue for the multiple-
product firm can be calculated by
341. At break Even Point is equal to fixed
cost A. dividing segment fixed cost by the
overall contribution margin ratio
A. Profit
B. dividing total fixed cost by the overall
B. Loss contribution margin ratio
C. Contribution C. dividing total fixed cost by the overall
D. Sales variable cost ratio
D. multiplying total fixed cost by the con-
342. To prepare a flexible budget statement,
tribution margin ratio
the actual costs must be flexed to the ac-
tivity level of the budget 347. What is CSR?
A. True A. 1. Corporate social responsibility
B. False B. 2. Customer satisfaction research
C. 3. Customer service responsibility
343. Which of the following best defines Cap-
ital expenditure? D. 4. Corporate skills research
A. Amount spent on purchase of fixed as- 348. The role of financial management does
sets not usually include responsibility for
B. Amount spent on running the day to A. risk management
day working of the business B. corporate finance
C. Amount invested by the owner C. compliance with accounting standards
D. Amount spent on maintenance of ma-
chinery D. none of above

349. Management account is highly sensitive 355. This refers to an accounting method used
to to allocate the cost of a tangible or physi-
A. Governments need cal asset over its useful life.
B. Investor needs A. Depreciation
C. Management Needs B. Amortisation
D. Towards all needs 356. Accounting is all about

A. Recording entries
NARAYAN CHANGDER
350. In production of Pen which of the follow-
ing will be direct material B. Calculating profit
A. Plastic C. providing relevant financial informa-
tion for decision makers
B. Ink
D. calculating asset values
C. Nib
D. All of the above 357. Current assets are equal to
A. Current liabilities
351. provides comparative data for anal-
ysis and interpretation for effective deci- B. Quick assets + Stock
sion making and policy formulation C. Stock
A. Financial accounting D. None of these
B. Cost accounting
358. A factor that causes or leads to a change
C. Management accounting in a cost or activity is a(n)
D. Corporate accounting A. intercept
352. Budgets can be created in periods B. driver
A. Yearly C. slope
B. Monthly D. cost object
C. Fiscal 359. Which of these help increase your credit
D. All True score? (select all that apply)
A. Having a credit card and paying it off
353. The profit and loss account shows the
on time
trading position of a business at the end
of a specified accounting period. B. Paying bills on-time that are in some-
one else’s name.
A. YES
C. Paying bills on-time that are in your
B. NO name
354. Fixed cost Rs.9600, Sales Rs.25200, D. Having a lot of money
ProfitRs.3000 calculate p/v ratio?
360. Which of the following are sources of
A. 20% funds?
B. 25% A. Issue of bonus shares
C. 50% B. Issue of shares against the purchase
D. 10% of fixed assets

C. Conversion of debentures into shares C. research and development, design,

supply, production, marketing, customer
service, distribution

361. Management Accounting can be viewed D. supply, research and development, de-
as sign, production, marketing, distribution,
A. Marketing oriented accounting customer service
B. Management oriented accounting 365. Cash equivalents are the short-term in-
C. Accounting oriented management vestments that can be readily converted
into cash.What is the maturity period of
D. Manager oriented accounting these Investments?
362. Alen is recently employed by a multina- A. 3 months or less
tional company and he is asked to appraise B. More than 3 months to 6 Months
a project. He has the following two opin-
C. Less than 1 year but more than 6
ions about discounting, Which are correct;
months.
1. Discounting is to use future value and
convert it into present value 2. Discount- D. More than 1 year
ing is to use present value and convert
it to future value 3. Discounting tells us 366. Which of the following words complete
how much worth the given project has in the statement below? accounts are
today’s term 4. Discounting tells us how prepared for external users. Managerial
much worth the given project has in future. accounts are prepared for users.
A. 1 and 2 above A. Internal, budget
B. 1 and 3 above B. Shadow, internal
C. 2 and 4 above C. Financial, internal
D. 1 and 4 above D. Financial, external
363. In evaluating different alternatives, it is 367. Financial statements are legally required
useful to concentrate on: in
A. variable costs A. Financial accounting

B. Management accounting
B. fixed costs
C. total costs 368. A budget is prepared for period
D. relevant costs A. Present
B. Past
364. Which of the following is the correct se-
quence of the value chain? C. Future
A. design, research and development, D. All the above
production, supply, marketing, customer
service, distribution 369. The first step in implementing target pric-
ing and target costing is
B. research and development, design,
supply, production, marketing, distribu- A. choosing a target price
tion, customer service B. determining a target cost.

C. developing a product that satisfies A. It should be relevant for its purposes

needs of potential customers.
B. It should be communicated to the right
D. performing value engineering person
370. The accounting rate of return is better C. It should be completely accurate
measured; D. It should be provided whatever the
A. Total annual accounting profit ex- cost
pressed as a percentage of estimated av-
NARAYAN CHANGDER
erage investment 374. An unfavorable variable overhead effi-
ciency variance indicates that:
B. Average annual accounting profits ex-
pressed as a percentage of Estimated av- A. variable overhead items were not used
erage investment efficiently
C. Average accounting annual profits ex- B. the price of variable overhead items
pressed as a percentage of total funds in- was less than budgeted
vested.
C. the variable overhead cost-allocation
D. None base was not used efficiently
371. The Meaning of Social Impacts D. the denominator level was not accu-
rately determined
A. Impact of an organization’s activities
on society including community, employ-
375. An example of variable cost would be
ees, customers and suppliers.
B. Financial measures, such as profit A. depreciation of factory machinery
based measure and cost performance B. shop rent
government
C. sales staff commission
C. Impact of an organization’s activities
on the environment D. factory manager’s salary
D. Economic impact such organization im- 376. A company’s actual performance should
pact on the economy and the organization be compared against budgeted amounts
relationship with the for the same accounting period so that:
372. What is the main objective of manage- A. adjustments for future conditions can
ment accounting? be included
A. To identify and analyse the result of B. no feedback is possible
business operations
C. no feedback is possible
B. To study business transactions
D. rolling budget can be implemented
C. To check and maintain accounting
records 377. Validity of current ratio
D. To remind the amount due to cus- A. 2:1
tomers
B. 1:1
373. Which TWO of the following statements
C. 1:2
about qualities of good information are
true? D. 4:1

378. Continuous improvement is synonymous C. Composite unit for bus operation

with: D. Composite unit for oil and natural gas

A. process benchmarking
384. Cost accounting systems provide informa-
B. total quality management tion to support decision making. Which of
C. management by objectives the following is not true?
D. management by exception A. Planning and control functions.
B. Determining unit manufacturing costs.
379. The primary benefit of activity-based
costing is to provide C. Assessing the efficiency and effective-
ness of operations.
A. more cost pools
D. All answers are true.
B. more accurate product costing
385. Companies may choose to use variable
C. better management decisions
costing because it
D. enhanced control over overhead costs
A. accords with GAAP
380. The total Profit @ sale of INR 25, 000 B. is useful for external reporting
is INR 5000 and profit for INR 40000 is C. is most useful for management deci-
INR 8000. What is the PV Ratio? sion making
A. 80% D. provides the gross margin
B. 20%
386. Which principle/guideline requires the
C. 40% company’s financial statements to have
D. 60% footnotes containing information that is
important to users of the financial state-
381. Marginal cost is computed as ments?
A. Prime cost + all variable overheads A. Historical Principle
B. Direct materials + Direct labor + Di- B. Business Entity
rect expenses C. Accrual Principle
C. Total costs D. Adequate disclosure Principle
D. All fixed overheads
387. Cost incurred in its efforts to create rev-
382. Which of the following is the most rele- enue
vant accounting information for taxation A. Expense
authorities?
B. Revenue
A. Cash balance of the firm C. Withdrawal
B. Book value of the fixed assets D. Liability
C. Credit sales of the year
388. What is the type of Drawings Account?
D. Profit generated during the year
A. (a) Personal
383. Absolute Tonne-km. is an example of: B. (b) Real
A. Composite units in power sector C. (c) Nominal
B. Composite unit of transport sector D. Expenses

389. The role of management accounting does C. remain the same regardless of output
not normally include the function of levels
A. cash management D. are costs that vary with the level of pro-
B. planning and control duction.
C. decision-making
395. Fixed cost + profit =
D. none of above
A. Semi-variable cost
NARAYAN CHANGDER
390. The following terms relate to ABC con-
B. Margin of safety
cept except
A. Marginal Cost C. Contribution
B. Cost Driver D. Standard profit
C. Cost Pool
396. Management Accounting provide data to
D. Cost Driver Rates
A. Only management
391. Which of the following are tools of man-
agement accounting? B. Both management and itself
A. Decision accounting C. Lower level of employees
B. Standard costing D. Outside stakeholders
C. Budgetary control
397. Current ratio is 2.7:1, quick ratio is 1.8:1
D. Human Resources Accounting
and current liabilities are Rs. 60, 000 or
E. A, B, C so confirm the value of the consignment
392. Minimum price is calculated as A. Rs. 54, 000
A. Variable cost + Fixed cost B. Rs. 60, 000
B. Marginal cost + Contribution C. Rs. 1, 62, 000
C. Marginal cost-Contribution
D. Rs. 1, 08, 000
398. The rule “Debit all expenses and losses
393. Budgets can be used as
and credit all gains and incomes” is appli-
A. All true cable to Personal Account
B. Predict financial plans A. True
C. Management planning and control
B. False
D. Unit and individual performance as-
sessment 399. Which one of these is a period cost?
394. Indirect Costs A. Finance costs
A. are not directly linked to a particular B. Admin costs
product or service
C. Selling & distribution
uct or service. D. Production overheads

400. Which one of the above graphs illus- 405. If Capital is $27, 500 and Liabilities are
trates the costs described in the ques- $5, 400, how much are Assets?
tion?A fixed cost-when the vertical axis

A. $32, 900
represents cost incurred
B. $27, 500
C. $22, 100
D. none of above
406. The of a business firm is measured by

its ability to satisfy its short-term obliga-
tions as they become due.
A. Graph 1
A. Liquidity
B. Graph 2
B. Debt
C. Graph 3
D. Graph 6 C. Profitability
D. Activity
401. The branch of accounting that generates
reports and information for the use of in- 407. What is the term used to describe what
ternal management is known as the company needed to spend in order to
A. Tax accounting generate its Net Sales?
B. Managerial or management account- A. Sales Statement
ing B. Sales Optimization
C. Auditing
C. Cost of Sales
D. International accounting
D. Sales Profit
402. Absorption costing is also known as
408. What is the decrease side of Accounts
A. Historical costing Payable Clark Company?
B. Total costing
A. Debit
C. Both a & b
B. Credit
409. Management accounting deals with
403. target price is
A. Quantitative information
A. price = cost + a fair share of profit
B. Qualitative information
B. the price a competitor sets
C. Both a and b
404. Which of the following normally have a
debit balance? D. None of the above
A. Liability accounts 410. Owner’s capital and sales increase with

B. Equity or capital accounts a
C. Income or revenue accounts A. debit
D. Asset accounts B. credit

411. Find the current liability from the follow- 416. Which of the following is true about Stan-
ing:Current ratio-2:5 Liquid ratio-1:5 Pre- dard Costing?
paid expenses-Nil Stock-7 4, 000 A. It is a technique of implementing cost
A. 20, 000 control within the organisation
B. 40, 000 B. It helps in planning out business activ-
ities within the organisation
C. 80, 000
C. Both are incorrect
D. 4, 000
NARAYAN CHANGDER
D. Both are correct
412. Planning, recording, analyzing, and inter-
preting financial information 417. The total of all direct costs
A. accounting A. Indirect cost
B. ethics B. Prime cost
C. transaction C. Total cost
D. revenue D. Cost unit
418. helps to classify, analyze, summa-

413. How does information technology help ac-
rize, and record financial transactions of
counting?
the company.
A. Contact quickly
A. Financial accounting
B. Collect data well
B. Cost accounting
C. Difficult to analyze and measure
C. Management accounting
D. Load more information
D. none of above
414. A manufacturing firm is very busy and 419. The person most likely to use manage-
overtime is being worked. How would the ment accounting information is a(n)
amount of overtime premium contained in
direct wages normally be classed? A. Banker evaluating a credit application.
A. Part of prime cost B. Shareholder evaluating a stock invest-

ment.
B. Factory overheads
C. Governmental taxing authority
C. Direct labour costs
D. Assembly department supervisor
D. Administrative overheads
420. Calculate value of closing stock from the
415. Decision to buy an article should be taken following:Opening stock of finished goods
when: (500 units):Rs. 2, 000 Cost of production
A. Purchase price is more than marginal (10000 units):Rs. 50, 000 Closing stock
cost (1000 units):?
B. Purchase price is less than marginal A. Rs. 4, 000

cost B. Rs. 4, 500
C. Purchase price is more than total cost C. Rs. 5, 000
D. Purchase price is less than total cost D. Rs. 6, 000

421. Which is the determinants of Capital 427. Controlling is the process of ensuring
Structure? that management plan is successfully im-
plemented.

A. Government Policy
B. Control A. TRUE
C. Tax B. FALSE
D. Requirement of Investors
428. Which is Fixed Cost?
422. Budgetary Control helps in implementa-
A. Changes in proportion to changes in
tion of
volume or activity (no change per unit)
A. Standard Costing
B. Changes per unit (no changes in pro-
B. Marginal Costing portion to changes in volume or activity)
C. Ratio Analysis
C. both
D. Technical Analysis
D. None
423. If the balance sheet of Maruthi Ltd is
analysing by sunil a prospective investor 429. Budget is
to invest in shares of maruthi is anal-
ysis A. Creation of an activity plan expressed
in monetary and non-monetary measures.
A. Horizontal
B. Creation of an activity plan expressed
B. Vertical
in financial terms.
C. External
C. creation of an activity plan expressed
D. Internal in unit size.
424. Sales D. creation of an activity plan expressed
A. Revenue in non-financial measures.
B. Expense
430. Which of the following financial institu-
C. Liability tions typically have the highest fees?
D. none of above A. Check cashing and payday loan compa-
425. Interest and dividend received in cash nies
flow from Activities B. Credit unions
A. Financing C. Brick-and-mortar banks
B. Operating
D. Internet banks
C. Investing
D. Non Financing 431. If Liabilities are $15, 425 and Assets are
$32, 350, how much is Capital?
426. Imputed cost is also know as
A. $16, 925
A. Sunk Cost
B. Notional Cost B. $15, 425
C. Opportunity Cost C. $47, 775

D. Marginal Cost D. none of above

432. The sources of finance can be broadly clas- 437. The difference between actual sales and
sified into two categories-Debt and break even sales is
A. Loans A. Contribution
B. Sale of old assets B. Profit volume Ratio
C. Investments C. Margin of Safety
D. Equity D. Gross margin
NARAYAN CHANGDER
433. Working capital ratio is also known as: 438. Operating ratio is calculated by
A. Quick ratio A. (Operating cost/ Gross Sales) * 100
B. Debt-Equity ratio B. (Operating cost/ Gross Sales) + 100
C. Current ratio C. (Operating cost/ Net Sales) * 100
D. Liquid account D. None of the above
434. Which one of the following statements is 439. Which of below users considered as Inter-
not true in relation to incomplete records? nal user?
A. It is an unscientific method of record- A. Owner

ing transactions B. Middle management
B. Records are maintained only for cash C. Bank
and personal accounts
D. Buyer
C. It is suitable for all types of organisa-
tions 440. 1) Which of the following is correct about
double entry system of accounting?
D. Tax authorities do not accept
A. Every business transaction brings at
435. Net profit is the surplus, if any, from least two financial changes in business
sales revenues after all expenses are ac- B. Financial changes are recorded as deb-
counted for. its or credits in two or more accounts
A. false C. Every debit entry has a corresponding
B. true credit entry.
D. All of the above
436. Wyeco Ltd makes one product, which
he sells at £55 per unit with the fol- 441. Tenant paid $300 for rent
lowing costs:Variable direct materials £18
per unit Variable direct labour £12 per A. Capital Receipt
unit, Fixed overheads £180, 000 per B. Revenue Receipt
year.What is the Break Even Point units?
442. Over-Absorption is Debited to the Over-
A. 6, 000 Units
heads Control Accounts Credited to Profit
B. 10, 000 Units and Loss Accounts
C. 7, 200 Units A. True
D. 3, 273 Units B. False

443. The difference between marginal costing 449. A responsibility center where managers
profit and that of the absorption costing are held responsible for both revenues and
profit is usually the fixed cost included in costs of the segment

the inventory valuation.
A. Cost center
A. True
B. Profit center
B. False
C. Revenue Center
444. Management Accounting Focuses on Ex-
ternal reporting D. Investment Center
A. True
450. COST ACCOUNTING IS USEFUL TO
B. False
A. CONTROLLING COST
445. Total cost of a product:Rs. 10, 000
Profit:25% on Selling Price Profit is B. ASCERTAINMENT OF FINANCIAL POSI-
TION
A. Rs. 2, 500
B. Rs. 3, 000 C. FIND OUT PROFIT OR LOSS
C. Rs. 3, 333 D. ALL THE ABOVE

D. Rs. 2, 000
451. Lee bought a printer for office use
446. The content of the management account- through an e-commerce website. He also
ing explanatory report is provided by: paid for the cost of delivering the printer,
maintenance for one year and printing pa-
A. Ministry of Economy, Finance and Law
per. What would be included in Lee’s in-
B. Administration of the Board of Direc- come statement?
tors of Law
A. delivery cost, printing paper, mainte-
C. Legal Business Administrator
nance.
D. Management accountant designs his
own style B. delivery cost, printing paper, mainte-
nance, printer.
447. Financial accounting provides a histori-
C. maintenance, printing paper.
cal perspective, whereas management ac-
counting emphasizes D. delivery cost, printer.
A. the future
452. Given Net profit for the year Rs 2, 50,
B. past transactions
000 transferred to general reserves Rs
C. a current perspective 40, 000 and old machinery bought for Rs
D. reports to shareholders 50, 000 was sold for Rs 20, 000. Calcu-
late funds from operations.
448. Outstanding expenses are part of
A. Rs 2, 80, 000
A. Current Asset
B. Rs 2, 20, 000
B. Current Liability
C. Debt C. Rs 2, 90, 000
D. CRR D. Rs 3, 00, 000

453. Which of these is the correct order for the months Gross profit ratio:25% Gross
accounting cycle? profit for the year ended 31st March
A. Prepare unadjusted trial balance; cre- 2014:|1, 00, 000 Closing stock for the
ate work papers to support the need for period-|20, 000 more than it was at the
an adjustment; post adjusting entries; beginning of the year.
prepare an adjusted trial balance; pre- A. 1, 60, 000
pare financial statements; post closing en-
B. 1, 40, 000
tries; prepare closing trial balance
NARAYAN CHANGDER
C. 1, 30, 000
B. Create work papers to support an ad-
justment; prepare an adjusted trial bal- D. 1, 20, 000
ance; prepare unadjusted trial balance;
prepare closing trial balance; prepare fi- 457. Which of the following is an indirect cost?
nancial statements; post adjusting entries A. The cost of restriping the parking lot at
C. Prepare unadjusted trial balance; cre- a perfume factory
ate work papers to support the need for B. The cost of bottles in a shampoo fac-
an adjustment; prepare closing trial bal- tory
ance; prepare financial statements; post
C. The cost of denim in a jeans factory
adjusting entries; prepare a large ad-
justed trial balance D. All of the above
D. None. An accounting cycle is like a bi- 458. Two basic measures of liquidity are
cycle with 1 extra large wheel and 1 extra
small wheel. A. Current ratio and Quick ratio.
B. Gross Profit ratio and Operating ratio.
454. There are 500 members in a club each
paying |.100 as annual subscription. Sub- C. Current ratio and Average collection
scription due but not received for the cur- period.
rent year is |.200 Subscription received D. Inventory turnover and Current ratio.
in advance is |.300 find out the amount
of subscription to be shown in the income 459. In management accounting, an emphasis
and expenditure account and focus must be
A. |.50, 200 A. Past oriented
B. |.50, 000 B. Future oriented
C. |.49, 900 C. Bank oriented
D. |.49, 800 D. Communication oriented
455. Select all examples of asset accounts. 460. A favorable direct materials price vari-
A. accounts receivable ance occurs when:
B. accounts payable A. actual rate of direct materials is equal

to standard rate of direct materials
C. prepaid insurance
B. actual rate of direct materials is less
D. sales than standard rate of direct materials
456. From the following information find the C. actual rate of direct materials is higher
value of closing stock Stock velocity:6 than standard rate of direct materials

D. actual rate of direct materials is less the year 2014 a machinery costing Rs 60,
than previous year’s rate of direct materi- 000 was sold. Determine the purchase of
als fixed assets.

461. Which of the following is not a limitation A. Rs 1, 04, 500
of financial statement analysis B. Rs 1, 40, 500
A. Ignores the qualitative elements C. Rs 1, 64, 500
B. Not free from personal bias
C. Intra-firm comparison
D. Ignores the price level changes 467. Jentayu Sdn Bhd has identified an ac-
tivity cost pool to which it has allocated
462. Which one of the following is not a limi- estimated overhead of RM960, 000. It
tation of Financial Accounting has determined the expected use of cost
A. It ignores qualitative aspects drivers for that activity to be 80, 000 in-
spections. Cameras require 20, 000 in-
B. Window Dressing spections, and printers require 60, 000 in-
C. It ignores quantitative aspects spections. The overhead assigned to each
D. It ignores Price level changes product is
A. cameras RM240, 000; printers RM720,
463. To prepare a flexible budget can be ad-
000
justed to recognize multiple cost drivers,
which cost driver may not be needed to B. cameras RM720, 000; printers RM240,
adequately of the cost in organization? 000
A. Wages and salaries C. cameras RM1, 280, 000; printers RM3,
B. Gasoline and supplies 840, 000
C. Office and shop rent D. cameras RM3, 840, 000; printers RM1,
280, 000
D. Equipment maintenance
464. Income from long term investments is 468. Cash Budget is Prepared from
A. source of cash A. Cash Forcast
B. application of cash B. Fixed budget
C. cash inflow from operations C. flexible budget
D. none of these D. Master budget
465. Audit committee is an effective means for
469. How do you account for wages in terms
corporate governance that reduces the po-
of work done on DIRECT tasks?
tential for fraudulent financial reporting
A. True A. Dr Wages Control, Cr Bank
B. False B. Dr Production Overheads, Cr Wages

Control
466. The balance of fixed assets of Y Ltd. at
C. Dr WIP, Cr Bank
cost at the end of 2013 and 2014 were
Rs 5, 70, 800 and Rs 6, 15, 300. During D. Dr WIP control, Cr Wages Control

470. Gaven owns a car dealership, which of A. Total marginal cost is deducted from
the following items would be revenue re- total sales revenues
ceipt? B. Total marginal cost is added to total
A. Money received from selling an old of- sales revenues
fice equipment C. Fixed cost is added to contribution
B. The purchase of car parts for the deal- D. None of the above
ership
475. Liability accounts decrease with a
NARAYAN CHANGDER
C. Money received from commissions on
sale of vehicles A. debit
D. Rent paid for the premises that is used B. credit
for the dealership
476. The chief objective of management ac-
471. Contribution margin is also known as counting is to server
A. Marginal income A. Public at large

B. Management
B. Gross Profit
C. Government
C. Net Profit
D. Employees
D. All of the above
477. is it a Capital receipt or revenue receipts
472. Financial Accounting is where as Man-
agement Accounting is
A. voluntary, voluntary
B. voluntary, compulsory
A. Capital receipts
C. compulsory, voluntary
B. Revenue receipts
D. compulsory, compulsory
478. Which of the following would be capital
473. Who stated the definition of manage- receipts?
ment accounting as “Management Ac- A. Purchase of goods for sale in a busi-
counting is concerned with accounting in- ness
formation which is useful to manage-
ment”? B. Purchase of equipment for use in a
business
A. Robert Anthony
C. Sale of stock in a business
B. Michael Porter
D. Sale of fixed asset by a business
C. J. Batty
479. Is the process of preparing reports about
D. James H Bliss
business operations that help managers
Explanation:Robert Anthony has intro-
make short-term and long-term decisions.
duced the hierarchy of management in an
organisation and created a framework re- A. Financial Planning
lated to managerial accounting. B. Forecasting Cash Flows
474. While computation of profit in marginal C. Cash Flow Analysis

costing D. Management Accounting

480. Management accounting renders useful C. 2 times

information to management in performing D. 8 times

A. Business functions
487. Revenue from operation is not taken
B. Co-ordination functions as100 in preparing common-size state-
C. All management functions ment of profit and loss.
D. Control functions A. True
481. Management accounting is B. False
A. A) Subjective 488. What is the primary goal of environmen-
B. B) Objective tal cost analysis in EMA?
C. Only A A. To demonstrate regulatory compliance
D. Only B B. To track and reduce environmental
costs
E. Both A and B
C. To obtain certification
482. The statements are produced annually.
D. To prepare sustainability reports
489. The high-low method uses cost and activ-
ity data from just two data points to es-
483. Customers tablish the formula for a mixed cost.
A. Internal User A. True
B. External User B. False
484. Relation of Management Accounting is- 490. Determine contribution if fixed cost is Rs.
40, 000 and Profit is Rs. 30, 000
A. Recording of Actual Data
A. Rs. 60, 000
B. Recording of cost data
B. Rs. 70, 000
C. Presentation of Accounting data
C. Rs. 30, 000
D. None of these
485. Bank loan
491. The amount of cash moving into and out
A. Liability
of a business
B. Expense
A. Cash Flow
C. Asset
B. Net Worth
D. none of above
492. Select the financial statement that dis-
486. Determine Debtors turnover ratio if, clos- plays the revenues and expenses of a com-
ing debtors is Rs 40, 000, Cash sales is pany for a period of time.
25% of credit sales and excess of clos-
ing debtors over opening debtors is Rs 20, A. Balance sheet
000. B. Income statement
A. 4 times C. Cash flow statement
B. 6 times D. Statement of stockholder’s equity

493. Which personnel of a financial firm play 498. Financial accounting is concerned primar-
a key role in management accounting? ily with:
A. Suppliers A. external reporting to investors, credi-
tors, and government authorities
B. Investors
B. cost planning and cost controls
C. Managers
C. profitability analysis
D. Customers
D. providing information for strategic and
NARAYAN CHANGDER
494. The purpose of financial accounting is to tactical decisions
provide information for
499. When in a transaction, if both the aspects
A. Assessing the profitability and finan- involved are either a current or non cur-
cial position of the firm rent, is there a flow of fund?
B. Fixing prices A. YES
C. Locating factors leading to wastages B. NO
and losses
D. cost control 500. Above picture explains
495. is the practice of identifying, measur-

ing, analyzing, interpreting, and commu-
nicating financial information to managers
to achieve the organization’s goals.
A. Management Accounting
B. Financial Accounting
C. Cost Accounting A. Target cost
D. none of above B. Life cycle cost

C. ABC cost
496. Concept:When a source document is pre-
D. Throughput
pared for each transaction
A. going concern 501. formula for net profit ratio
B. materiality A. Net profit-gross profitX100
C. realization of revenue B. Net profit after tax/Net sales X100
D. objective evidence C. Net profit before tax /Net sales X 100
D. none of above
497. Which of the following is not a character-
istic of a management account 502. Composite cost unit for a hospital is:
A. Planning, control and decision making A. Per patient
B. Look at both past and present B. Per patient-day
C. Not legally required C. Per day
D. External reporting D. Per bed

503. Management accounting B. YES. Both are used for cost control
A. Focuses on estimating future rev- C. NO. Cost center is a section of the busi-

enues, costs, and other measures to fore- ness to which costs are charged. Cost unit
cast activities and their results. helps to ascertain cost for a product or
B. Provides information about the com- service.
pany as a whole. D. none of above
C. Reports information that has occurred
in the past that is verifiable and reliable. 508. According to the Dual Aspect Concept Cap-
ital + Assets = Liability
D. . Provides information that is gener-
ally available on a quarterly or annual ba- A. True
sis.
B. False
504. This is one of the most useful financial
indicators, since it represents the amount 509. Staff positions are those which do not
that is being paid to finance the business support line positions.
through its own resources. Through its A. TRUE
metrics, a key reference point is achieved
to improve the value of the company B. FALSE
A. Debt ratio
510. Short term financial position will improve
B. Acid Ratio with
C. Capital Cost A. Increase in current assets
D. Inventory Rotation B. Decrease in current assets in current
505. Product (or manufacturing) costs consist assets
of C. Increase in current Liabilities
A. direct materials, direct labor, and sell- D. None of theses
ing costs
B. prime costs and manufacturing over- 511. A company began its operations by start-
head ing 40, 000 units in production. During
the month, 22, 000 were completed and
C. administrative costs and conversion
transferred out while the remaining units
costs
were 45% complete. The total equivalent
D. selling and administrative costs units of production were
506. What is the classification of the owner’s A. 22, 000 units
capital account?
B. 30, 100 units
A. Revenue
C. 30, 000 units
B. Expense
D. 25, 600 units
C. Owner’s Equity
D. Asset 512. Labor Unions
507. A cost center and a cost unit are the same A. Internal User
A. YES. Both are used to ascertain cost B. External User

513. What is the thing that makes the Finan- 518. Financial analysis is used only by the cred-
cial Manager one of the scope of manage- itors.
ment accounting? A. True
A. Recording Financial Transactions & B. False
Company Activities that Require Funding
519. What is the increase side of Accounts Re-
B. Details of Costs
ceivable Little Tykes Nursery?
C. Data containing all Cost Components A. Debit
NARAYAN CHANGDER
D. Company Financial Information B. Credit
514. A company has Purchases of $1, 46, 000 520. Helps managers run the business
and account payable of $1, 10, 000. What A. Financial accounting
is its creditors turnover ratio?
A. 0.2 times
521. Which of the following will not impair the
B. 1.327 times
independence of a CPA in the rendition of
C. 5 times Management Services?
D. 10 times A. The CPA performs decision-making
services for his client
515. The formal process of choosing between B. The CPA performs services wherein he
alternatives is known as a(n): is in effect, acting as an employee of the
A. relevant model client
B. decision model C. The CPA losses his objectivity and acts
in a manner as if he is advocating for the
C. alternative model interest of his client
D. prediction model D. The CPA does not extend his services
beyond the presentation of recommenda-
516. The tool for evaluating the performance tion or giving advice
of two or more firms in same industry
A. Average analysis 522. Purchase of property for new office
A. Capital Expenditure
B. Intra firm comparison
B. Revenue Expenditure
C. Inter firm comparison
D. Comparative analysis 523. Repayment of long term borrowings is
shown in
517. sales revenue variance based on a A. Financial activity
flexed budget could arise when goods are
B. Operational activity
sold above budgeted prices
C. Investing activity
A. A favourable
D. None
B. An Adverse
524. is stated as a budget which is made
C. A Balance
to change as per the levels of activity at-
D. none of above tained.

A. Fixed budget C. FinancialLeverage Metrics

B. Flexible budget D. AccountsReceivable (AR) Manage-

C. Both a and b ment
D. None of the above 529. Current assets (minus) current liabilities
is the
525. Following the Code of Ethics is really
important within management accounting; A. Current ratio
name all 5 of them B. Net worth
A. Professional Behaviour, Integrity, Pro-
C. Working capital
fessional competence and due care, Con-
fidentiality and Objectivity D. Quick ratio
B. Professional Behaviour, Integrity, Pro-
530. Which are associated with Job Order
fessional due care and attention, Confi-
Costing?
dence and Objectivity
A. Cost accumulate by each operation
C. Professional Bad Behaviour, Integrity,
Professional competence and due care, B. Unit cost of items determined dividing
Confidentiality and Objection costs of production by number of units pro-
duced
D. none of above
C. Companies produce large quantities of
526. What is UnFavorable (U)? identical items
A. Revenue Increased, Spending In- D. Companies produce goods to a cus-
creased tomer’s unique specifications
B. Revenue Increased, Spending De-
creased 531. Which TWO of the following would be
data rather than information?
C. Revenue Decreased, Spending In-
creased A. Sales increase/decrease per product
D. Revenue Decreased, Spending De- in last quarter
creased B. Total sales value per product
527. Direct costs are C. Total material usage
A. Costs that do not change with output D. Sales staff commission as a percent-
age of total sales
B. Costs directly involved with making the
product 532. What information is shown by a busi-
C. Costs that are essential but not di- ness’s Trading Account?
rectly related to manufacturing
A. if the business assets equal the liabili-
D. money spent on a regular basis ties
528. It refers to a company’s use of borrowed B. if the business has made a gross profit
capital in order to acquire assets and in- C. if the business has made a profit for
crease its return on investments. the year
A. InventoryTurnover Analysis D. if the business income exceeds expen-
B. ConstraintAnalysis diture

533. Which of the following types of informa- A. Steel Triangle

tion are used in management accounting? B. Iron Triangle
A. Financial information. C. Gold Triangle
B. Non-financial information D. None of the above
C. Information focused on the long term
538. Consumption of raw material is based on
D. All of the above budget
NARAYAN CHANGDER
534. Direct costs are those which A. Flexible budget
A. can be accurately traced to a product B. Cost budget
B. are significant in the production pro- C. Sales budget
cess D. Production budget
C. are incurred in a specific period
539. Which of the following is a Revenue Ex-
D. include only purchase of materials penditure
535. Juanita Corporation uses a job-order A. Interest Received on Savings
costing system and applies overhead B. Rent Received from Tenant
on the basis of direct labor cost. At
the end of October, Juanita had one C. Purchasing Start-up Machinery
job still in process. The job cost sheet D. Purchasing Raw Materials
for this job contained the following in-
formation:Direct materials:$480Direct 540. Element/s of Cost of a product are
labor:$150Manufacturing overhead ap- A. Material only
plied:$600An additional $100 of labor B. Labour only
was needed in November to complete this
job. For this job, how much should Juanita C. Expenses only
have transferred to finished goods inven- D. Material, Labour and expenses
tory in November when it was completed?
541. Current ratio is also known as
A. $1, 330
A. Working capital ratio
B. $500
B. Quick ratio
C. $1, 230
C. Liquid account
D. $1, 730
D. Acid test ratio
536. The person MOST likely to use manage-
ment accounting information is a(n): 542. Accounts receivable turn over ratio mea-
sures
A. banker evaluating a credit application
A. number of times inventory is sold dur-
B. shareholder evaluating a stock investing the year
ment
B. how quickly a firm collects its Debtors
C. governmental taxing authority
C. howmuch in total assets a firm must
D. assembly department supervisor have to generate its sales
537. The three parameters are quality, cost D. The proportion of receivables in ac-
and time are called counts

543. It provides the detailed cost data that over if all the current liabilities were paid
management needs to control current op- off by current assets.
erations and plan for the future.

A. current ratio
A. Cost Accounting B. working capital
C. acid test/ quick ratio
C. Financial Accounting
D. asset turnover ratio
D. Financial Analysis
549. Which of the following is used to calcu-
544. is the study of managerial aspects of late the average collection period of a com-
financial accounting pany?
A. Cost accounting A. Debtors turnover ratio
B. Financial accounting B. Creditors turnover ratio
C. Management accounting C. Inventory turnover ratio
D. Business accounting D. None of the above
545. What do you mean by Cost Manage- 550. Lordship Ltd has annual budgeted over-
ment? heads of £15, 000 and annual budgeted
A. Managing Cost machine hours of 30, 000. What is the
B. Managing Fund budgeted overheads absorption rate?
C. Managing Asset A. £0.50
D. Managing Liabilities B. £0.55

C. £0.65
546. planning and forecating, modification of
data is a D. £2
A. Objectives of management 551. ABC co is planning to undertake a project

B. functions of management with initial outlay of $ 600, 000 and it will
yield annual profits (after depreciation) of
C. scope of management $40000 per year for next 5 years. The
D. none residuals value of projects asset will be $
60000.calculateARR
547. Opening receivables are £1, 000, sales
invoices raised are £5, 000 and closing re- A. 1.48%
ceivables are £600. What is the receipts B. 7.41%
from sales in our cash budget?
C. 12.12%
A. £5, 000
D. 2.42%
B. £6, 600
552. Marketable securities are part of
C. £4, 600
A. Fixed Assets
D. £5, 400
B. Investments
548. The difference between current assets
and current liabilities at a point in time. C. Current Assets
The amount of money that would be left D. None

553. Stakeholders are: B. Bills receivable account

A. Customers. C. Bills payable account
B. Suppliers. D. Total creditors account
C. Shareholders. 559. The profit and loss account (or the income
D. Creditors. statement) is a financial statement of a
E. All of the above firm’s trading activities over a period of
time, usually one month.
NARAYAN CHANGDER
554. What are the instruments/ tools related A. TRUE
to management accounting?
B. FALSE
A. Marginal costing
B. Standard costing 560. Purchase of delivery van
C. Budget control A. Capital Expenditure
D. All of the above B. Revenue Expenditure
555. Sales= Rs.500000, Variable Cost= 561. A partnership must have more than one
Rs.200000, Fixed Cost= Rs.50000. What owner.
is the BEP Sales? A. True
A. 83333 B. False
B. 125000
562. Choose the correct option
C. 500000
D. 300000
556. What is the classification of Accounts

Payable Staples?
A. Asset A. joint product
B. Liability B. by product
C. Owner’s Equity
563. Depreciation of Plant and Machinery will
D. Expense come under
557. Management Accounting is: A. Factory Overhead
A. Concerned with the provision of infor- B. Office and Administrative Overhead
mation to people within the organization C. Selling and Distribution Overhead
to help them to make better decisions
D. Prime cost
B. Extension of financial accounting
C. Extension of financial management 564. The zero-based budget is the best
method of budgeting because:
D. Accounting for management
A. This type of budget is less complicated
558. The amount of credit sales can be com- than other types of budgets
puted from B. Sticking to a zero-based budget re-
A. Total debtors account quires less discipline

C. A zero-based budget allows less 570. A budgeted income statement can be used
money for wants by the business to predict:

D. The zero-based budget ensures that A. profit
every dollar you make is assigned a spe-
cific purpose B. expenses
C. revenue
565. A managing director must be an individ-
ual (a real person) and can be appointed D. all of the above
for a maximum period of five years.
571. What is the main objective of manage-
A. True
ment accounting?
B. False
A. To identify and analyse the result of
566. An unfavorable sales-volume variance business operations.
could result from:
A. an inappropriate assignment of labor
or machines to specific jobs C. To study business transactions
B. competitors taking market share D. To remind the amount due to cus-

tomers
C. an inefficiency of a purchasing man-
ager in bargaining with suppliers 572. Statement prepared to show the relation-
D. a decrease in actual selling price com- ship of different individual item with total
pared to anticipated selling price
A. Comparative statement
567. Which type of bank account typically of- B. Common size statement
fers the least (if any) interest?
C. Ration analysis
A. Money market account
B. Savings account D. Fund flow statement
C. Certificate of deposit 573. Sales return occurs when
D. Checking account
568. Management Accounting is
A. mandatory
B. futuristic
C. historical
D. concurrent
569. Good information should have certain
qualities. Which two of the following are A. Suppliers sell goods to the business
required as qualities of good management B. Customers return goods to the busi-
information? ness
A. Complete
C. Business return goods bought from
B. Extensive suppliers
C. True and Fair D. Business return goods sold by suppli-
D. Accurate ers

574. In Flexible budget Works overhead is C. 10%

(60% fixed) for Rupees 10.00 rs per unit D. 50%
what is the remaining value under semi
variable over head. 579. Management accounting assists the man-
A. 4 Rs agement
B. wedding
C. 5Rs
NARAYAN CHANGDER
D. Keen
575. Standard material cost depends on speci-

fication, consumption and
A. quality
A. Only in control
B. quantity
B. Only in direction
C. price
C. Only in planning
D. nature
D. In planning, direction and control
576. In Toll Road costing, the repetitive costs
580. Step Fixed Costs
includes:
A. ESB Bill, Telephone
A. Maintenance cost
B. Rent
B. Annual operating costs
C. Raw materials
C. None of the above
D. none of above
D. Both (a) and (b)
581. Managerial accounting is an important
577. The basic difference between a flexible aid to assist the management in
budget and fixed budget is that a fixed
budget is A. Decision making
A. is concerned with fixed expenses B. Control
whereas flexible budget deals with vari- C. Both dcision making and control
able expenses. D. None
B. cannot be changed whereas flexible
budget can be easily changed 582. Contribution Margin Ratio is calculated
C. is a budget for single measure of activ- A. (Sales-Variable costs)/Fixed costs
ity whereas flexible budget is on different B. Contribution margin/Fixed costs
activity levels. C. (Sales-Variable costs)/Sales revenue
D. none of above D. Contribution margin/Variable costs
578. If sales are Rs. 10, 00, 000 sales re- 583. Gross profit ratio is calculated by
turns are Rs. 50, 000 profit before tax is
Rs. 2, 00, 000 Income tax is 40%, Net A. (Gross profit / Gross Sales) * 100
profit ratio is B. (Gross profit / Net Sales) * 100
A. 12.63% C. (Net profit / Gross Sales) * 100
B. 20% D. None of the above

584. Which of the following is not a functional D. none of above

budget?
590. Which of the following is NOT in CIMA

A. Sales Budget code of Ethics
B. Purchasing Budget A. Integrity
C. Production Budget B. Confidentiality
D. Budgeted Balance Sheet C. Loyalty
585. The trading account is the first section D. Objectivity
of the P&L account and shows the differ-
ence between a firm’s sales revenue (the 591. A one-time-only special order decision
valueof products sold to customers) and A. has no role in segregating special and
its costs of producing or purchasing those regular customers
products to sell. Hence, the trading ac- B. must involve unused plant capacity to
countshows the gross profit of a firm. avoid lost profits on regularly priced items
A. no C. allows a company to sell products at
B. yes prices that only cover fixed costs
586. Objectives, tend to be narrow, specific D. involves selling products at a percent-
statements. age over retail price due to the short time
period involved
A. TRUE
B. FALSE 592. Income earned from normal business ac-
tivities are
587. Management carelessness in making the
budget is called
A. Budget Slack
B. Padding the Budget
C. Pseudoparticipation
D. All Correct
588. While sending the goods for distribution,

packing the goods in Carton box will be
considered
A. Direct Material
B. Primary Packing A. Sales returns
C. Secondary Packing B. Purchases
D. Direct Expenses C. Revenue
589. Revenue and expenses are recorded un- D. Purchases returns

der: 593. Choose the following terms that is NOT
A. assets fixed assets.
B. liabilities A. Vehicles
C. owner’s equity B. Leasehold

C. Debtors A. $50
D. Office equipment B. $500
594. Gilchrist Corporation bases its predeter- C. $550

mined overhead rate on the estimated D. $555
machine-hours for the upcoming year. At
598. Which of the following does NOT appear
the beginning of the most recently com-
in the Trading Account.
pleted year, the Corporation estimated
the machine-hours for the upcoming year A. Closing Stock
NARAYAN CHANGDER
at 79, 000 machine-hours. The esti- B. Manager’s Salary
mated variable manufacturing overhead
C. Wages
was $7.38 per machine-hour and the esti-
mated total fixed manufacturing overhead D. Purchase Returns
was $2, 347, 090. The predetermined
599. The sum of actual cost and the standard
overhead rate for the recently completed
cost is known as variance analysis.
year was closest to:
A. True
A. $37.09 per machine-hour
B. False
B. $36.07 per machine-hour
C. $7.38 per machine-hour 600. Financial Accounting is for Manage-
ment Accounting
D. $29.71 per machine-hour
A. Output
595. The accounting period of a business is sep- B. Outcome
arated into activitiess that help the busi-
ness keep its accounting records in an or- C. Input
derly fashion. D. None of the Above
A. Accounting Period Cycle 601. Which of the following statements are
B. Source Document false? A) Cash Flow Statement is helpful
in the formation of policies. B) Cash Flow
C. Fiscal Year
Statement is useful for external analysis
D. None of the Above C) Cash Flow Statement is helpful in esti-
mating future cash flow
596. Poor adoptation with Management Ac-
counting Information System (MAIS) is A. Both A and B
lead to B. Both A and C
A. profit minimization C. Both B and C
B. inaccurate forecasting D. None of the above
C. poor inventory management 602. Management accounting helps the man-
D. All of the above agement in the performance of the
business
597. Given the GST Clearing Ledger account
shown, calculate the amount paid for Elec- A. Controlling
tricity excluding GST. B. Planning
C. Time saving
D. Decision making

603. carriage outward is recorded in 609. Absorption of overheads may be done on

A. trading account debit side the following basis:

A. Data from previous or historical
B. trading account credit side
B. Anticipated volume or unit produced
C. profit and loss account debit side
C. Classification of major activities and
D. profit and loss credit side
pooling their costs.
604. FINANCIAL ACCOUNTING PURPOSE IS D. Normal volume of output or capacity
A. FIND OUT COST 610. Government
B. CONTROL COST A. Internal users
C. ASCERTAINMENT OF FINANCIAL PO- B. External users
SITION & PROFIT/LOSS
611. Which of the following statements con-
D. BUDGETING cerning Big Data analytics is correct?
605. Which one of the following is not an ex- A. Big Data analytics relies on digital in-
ternal user of accounting information? formation
A. Investor B. Big Data analytics relies on written in-
formation
B. Creditor
C. Big Data analytics relies on verbal in-
C. Manager formation
D. Customer D. Big Data analytics relies on confiden-
tial information
606. Depreciation is
A. An external sources of funds 612. Content can include anything useful
B. A non fund item A. Financial Accounting
C. An application funds B. Management Accounting
D. None of these 613. Which TWO of the following would be

classed as indirect labour?
607. The treasurer’s major duties in-
A. Assembly workers in a company man-
clude:providing operating capital for long-
ufacturing televisions?
term financing; maintaining shareholder
relations; short-term financing. B. A stores assistant in a factory store
A. TRUE C. Factory cleaning staff
B. FALSE D. Plasterers in a construction company
E. A consultant in a firm if management
608. play a key role in management ac- consultants
counting
614. Over which TWO of the following is the
A. Investors
manager of a profit centre likely to have a
B. Managers control?
C. Customers A. Selling prices
D. Suppliers B. Controllable costs

C. Apportioned head office costs 619. Conversion costs comprise of

D. Capital investment in the centre A. Direct labour cost
B. Manufacturing overhead cost
615. An Asset is
C. Product Cost
A. An asset is a resource currently owned
D. Period Cost
and controlled by a business as a result of
a past transaction 620. In an organization, profit after interest,
NARAYAN CHANGDER
B. An asset is a resource owned by a busi- tax, and dividend on preference shares is
ness as a result of a past transaction |4, 00, 000. The number of equity shares
is 40, 000 and the dividend payout ratio
C. An asset is something that costs is 40%. The dividend per share is
money
A. 4
D. none of above
B. 8
616. The ethical standards established for C. 5
management accountants are in the areas D. 7
of
621. The fixed cost is
A. competence, licensing, reporting, and
education.
B. budgeting, cost allocation, product
costing, and insider trading.
C. competence, confidentiality, integrity, A. Rs 4500
and objectivity. B. Rs 5500
D. disclosure, communication, decision C. Rs. 5000
making, and planning.
D. Rs. 4000
617. Follows applicable laws, regulations, and 622. It is used to fix the selling price, selec-
standards is the characteristics of tion of best sales mix, best use of scarce
Based on IMA code of ethics. raw materials or resources, to take make
A. Integrity or buy decision, acceptance or rejection of
bulk order and foreign order and the like.
B. Competence
A. Financial Statement Analysis
C. Confidentiality
B. Fund Flow Analysis
D. Objectivity C. Standard Costing
618. Given sales is 1, 20, 000 and gross profit D. Marginal Costing
is 30, 000 the gross profit ratio is
623. A company manufactures a single product
A. 24% with a variable cost per unit of Rs. 110.
The P/V Ratio is 45%. Monthly fixed
B. 25%
costs are Rs. 9, 90, 000. What is the
C. 40% break-even point in units
D. 44% A. 4950

B. 9000 629. The Accounting Equation is:

C. 11000 A. Assets = Liabilities + Capital

D. 20000 B. Liabilities = Assets-Capital
C. Assets-Labilities = Owners Equity
624. Qualitative information does not help in
taking better quality decisions. D. All of the above
A. True 630. Ensure thats the subordinates do not dis-
B. False close confidential information is the char-
acteristics of Based on IMA code of
C. May be ethics.
D. None A. Integrity
625. Legacies should be treated as B. Objectivity
A. A Liability C. Confidentiality
B. A Revenue Receipts D. Competence
C. An Income 631. All of the following statements are cor-

rect, except for?
A. Businesses can claim back GST on any
626. Semi-variable costs contain both a fixed purchases of supplies and equipment
element and a variable element B. Businesses owe the ATO GST collected
A. True on service fees
B. False C. GST Clearing can either be an asset or
a liability
627. Ahmad has an idea for a new business.
D. GST Clearing is always a liability
He wants to start the business as soon as
possible with the minimum amount of ex- 632. The statements are produced monthly
penses. He also wants to be the boss and
keeps all of the expected profits earn for
him.Identify the type of business owner- B. Management accounting
ship that Ahmad would prefer to set up
633. The chief accountant of an organization
A. Sole proprietorship with responsibility for financial planing
B. Partnership and analysis, cost control and financial re-
porting is the explanation of
C. Private limited
A. An accountant
D. Public limited
B. A treasurer
628. Investors are C. A president director
A. Suppliers D. A controller
B. Owners
634. is the process of collecting, recording,
C. Banks classifying and summarising financial data
D. Customers A. Reporting

B. Accounting 639. Bad debts in cost accounting will come un-

C. Writing der
A. Factory overhead
D. Auditing
B. Office and Administrative Overhead
635. Place the following steps from the five-
C. Selling and Distribution Overhead
step decision process in order:A = Make
predictions about future costs B = Evalu- D. Prime Cost
ate performance to provide feedback C =
NARAYAN CHANGDER
Implement the decision D = Choose an al- 640. is an indicator of a company’s short-
ternative term liquidity position and measures a
company’s ability to meet its short-term
A. A D B C obligations with its most liquid assets.
B. C D A B A. Current Ratio
C. A D C B B. Quick Ratio
D. D C B A C. Debt Ratio
636. Which of the following statements are D. Gearing Ratio

true about labour idle time?
641. Which is a capital receipt for the owner
A. Labour idle time variance is not caused of the bicycle shop?
by non-availability of raw material
A. purchase of bicycle delivery vehicle by
B. Labour idle time variance is measured cheque
as:Abnormal idle hours * Actual hourly B. sale of old bicycle delivery vehicle for
rate cash
C. Labour idle time variance is always un- C. sale of bicycles for cash
favorable or adverse
D. purchase of bicycles by cheque
D. All of the above
642. The following would appear in which sec-
637. What is not included in the budget bene- tion of the cash flow statement? Cash pay-
fits is ment made to bank to pay down principal
A. Control on long-term loan
B. Planning A. Operating
C. Motivation B. Investing
D. Convergence C. Financing
D. none of above
638. A company has a creditors turnover ratio
of 4 times per year. What is the average 643. Target for launching Fuel Information Pre-
payment period of the company? sentation Automation:
A. 45 days A. July 01, 2022
B. 60 days B. July 31, 2022
C. 91.25 days C. 30 Sept 2022
D. 120 days D. 15 Sept 2022

644. Below statements are correct for ABC ex- 648. Given the budgeted output in second
cept quarter is 8, 000 units. In the first quarter,
Fixed overheads were Rs 40, 000 Vari-

A. ABC stands for Activity Based Con-
sumption able overheads were Rs 5 per unit ( Rs
40, 000) and semi variable were 20, 000 (
B. costs to be traced back to the activities 60% varying @ Rs 3 per unit). Determine
that drive the costs. the total manufacturing overhead budget
C. ABC is based on the concept that prod- for the second quarter.a. b. c. d.
ucts consume activities A. Rs 1, 12, 000
D. Recognizing a few classification of ma-
B. 1, 12, 000 units
jor activities and pooling their costs
C. Insufficient data
645. How is gross profit calculated
649. What is one of the most important deci-

sions made by management?
A. Pricing
B. Marketing
C. Accounting
D. Economics
A. Opening inventory + Purchases- 650. Which of the following is a part of the

Closing inventory formal management control system?
B. Revenue-Sales return
A. mutual commitments among the mem-
C. Revenue-Cost of sales bers of the organization
D. Sales return + Cost of sales B. the accounting information system
provides metrics about costs, revenues,
646. The liquid ratio should be around
and contribution margins
A. 4
C. shared values and loyalties among the
B. 2 members of the organization
C. 5
D. general understanding about accept-
D. 1 able behavior for managers
647. What does Environmental Management 651. Operating costs include the cost of goods
Accounting (EMA) primarily focus on? sold and
A. Environmental sustainability only
A. purchases
B. Financial performance only
B. sales
C. Integrating environmental and eco-
nomic information C. gross profit
D. Social impact assessment D. other operating expenses

652. A semi variable cost totals £1, 000 for 657. Which of the following are Non-current
100 units. The variable cost per unit is £8 assets?
per unit. How much is the fixed element A. Land, Building and Plant
of this semi variable cost?
B. Leasehold property
A. £800
C. Computer software
B. £200
D. All of the above
C. £1, 000
NARAYAN CHANGDER
658. Summary budget may be regarded as
D. £250
A. Cash Budget
653. Which of the following funds are long B. Flexible Budget
term sources of funds?
C. Master Budget
A. Bank Overdraft
D. Flexible Budget
B. Creditors
659. Which of these cost is not considered as
C. Term Loans prime cost for manufacturing
D. Public Deposits A. Direct material
B. Direct labor
654. What role does financial data play in En-
vironmental Management Accounting? C. Direct expense
A. It is irrelevant to EMA D. Administration expense
B. It is integrated with environmental 660. THE FOLLOWING ARE THE PURPOSES
data OF ENVIRONMENTAL MANAGEMENT AC-
C. It is used only for external reporting COUNTING, EXCEPT
A. REDUCE RISKS TO THE ENVIRONMENT
D. It is tracked separately from environ-
mental data B. IMPROVING COMPANY MANAGEMENT
RESULTS
655. The use of management accounting is C. REDUCE THE ENVIRONMENTAL IM-
A. Compulsory PACTS OF COMPANY OPERATIONS, PROD-
UCTS AND SERVICES
B. Legally obligatory
D. COMPENSATE ENVIRONMENTAL LOSS
C. Compulsory to some and optional to CAUSED BY THE COMPANY
other
D. Optional 661. Why are budgets useful in the planning
process?
656. What is the system introduced by Luca A. They provide management with infor-
Pacioli? mation about the company’s past perfor-
A. Bookkeeping mance.
B. They help communicate goals and pro-
B. Accounting
vide a basis for evaluation.
C. Double Enter
C. They guarantee the company will be
D. Double Entry profitable if it meets its objectives.

D. They enable the budget committee to 666. Fixed cost is also referred to as in the
earn their paycheck. marginal costing technique.

662. Which of the following describes the flow A. Total cost
of overhead costs in an activity-based B. Product cost
costing system? C. Period cost
A. overhead cost>products D. None of the above
B. overhead cost>machine hours>products
667. Every department of the organization
prepares for management within spec-
C. overhead cost>direct labour cost or ified period-
hours>products
A. House
D. overhead cost>activity cost
pools>cost drivers>products B. Guest House
C. New Office
663. Difficulties in recognize economic, envi-
ronmental, and social impacts except D. Reports
A. future ecological and social issues are 668. Which one of the following is not a real
not always known account?
B. many costs and benefits are external A. Machinery account
to the organization
B. Sales account
C. many costs and benefits are difficult to
C. Goodwill account
measure in financial terms
D. Equipment account
D. mostly costs are internal
669. An important assumption of cost-volume-
664. When capital in the beginning is |.10,
profit analysis is that
000 drawings during the year is |.6, 000
profit made during the year is |.2, 000 A. both costs and revenues are linear
and the additional capital introduced is |.3, functions
000 find out the amount of capital at the B. the sales mix remains constant
end
C. all of the above are assumptions of
A. |.9, 000 cost-volume-profit analysis
B. |.11, 000 D. there is no change in inventories
C. |.21, 000
670. John’s 8-year-old Toyota Inova requires
D. |.64, 000 repairs estimated at $6, 000 to make it
roadworthy again. His wife, Sherry, sug-
665. Decision to make should be taken when-
gested that he should buy a 5-year-old
A. Marginal cost is more than purchase used Honda CRV instead for $6, 000 cash.
cost Sherry estimated the following costs for
B. marginal cost is less than purchase the two cars:Toyota Inova Honda CRV Ac-
cost quisition cost $25, 000 $6, 000 Repairs
$ 6, 000 Annual operating cost $ 2, 280
C. Total cost is more than purchase cost $2, 100 The cost NOT relevant for this de-
D. total cost is less than purchase cost cision is the:

A. acquisition cost of the Toyota Inova D. Provision of information to manage-

B. acquisition cost of the Honda CRV ment
Explanation:Management accounting
C. repairs to the Toyota Inova analyses and creates reports related to
D. annual operating costs of the Honda the financial performance management
CRV of a company with the help of available
information.
671. The is an operational concept linked
to the generation of new wealth. 675. For accounting purpose, the proprietor is
NARAYAN CHANGDER
The refers to the amount and participa- a separate and distinct entity from the
tion of the income that reaches those who business.
provide their own capital to the private A. True
company
B. False
A. Utility, Profitability
676. Quick ratio is also known as
B. Profit, Administration
A. Monetary ratio
C. Profitability, Utility
B. Acid test ratio
D. Maximization, Wealth
C. Chemical test ratio
672. At a volume of 5, 000 units, Pwer-
D. All of the above
son Company incurred $32, 000 in fac-
tory overhead costs, including $14, 000 in 677. The reason we create Bad debt Reserve
fixed costs. If volume increases to 6, 000 in the books of accounts is due to the
units and both 5, 000 units and 6, 000
A. Materiality Concept
units are within the relevant range, then
the company would expect to incur total B. Convention of Consistency
factory overhead costs of:(Round interme- C. Realisation Concept
diate calculations to 2 decimal places.) D. Convention Conservatism
A. $35, 600
678. Production cost is the sum of all manufac-
B. $21, 600 turing costs
C. $32, 000 A. True
D. $18, 000 B. False
673. royalty on production will be recorded in 679. Under ABC costing method, What are
A. trading account debit side these called as
B. trading account credit side
674. What is the main function of management

accounting? A. Overhead pool
A. Decision making B. Overheads
B. Planning C. Cost Drivers
C. Direction D. Overhead drivers

680. Shows the total change in cash from op- B. Company Financial Information
erating, investing, and financing activities C. Recording Financial Transactions &

A. Beginning Cash Balance Company Activities that Require Funding
B. Net Cash Flows D. Data containing all Cost Components
C. Ending Cash Balance 685. Ideally, the net cash flow should be
D. none of above A. positive
681. Planning and control are B. negative
A. different names for the same thing. 686. The creditors turnover ratio is used to
B. the basic functions of management. measure:
C. described equally well by the terms A. The average time taken by debtors to
“decision making” and “performance eval- pay their debts
uation.” B. The average time taken by creditors to
D. exemplified by, respectively, financial pay their debts
statements and budgeting. C. The profitability of a company
682. The owner invests personal cash in busi- D. The liquidity of a company
ness.
687. Which branch of accounting deals with
A. Asset (I) the calculate the profit or loss of a busi-
B. Liabilities (I) ness during a period and to provide an ac-
C. Equity (NE) curate picture of the financial position of
the business as on a particular date to in-
D. none of above vestors or banks?
683. Juan Dela Cruz is the marketing man- A. Auditing
ager for a local recreational sports com- B. Cost accounting
plex. Juan’s role in the marketing depart-
ment is to advertise events, meet poten- C. Financial Accounting
tial clients, and plan future events. Juan D. Management accounting
is responsible for revenues and costs for E. Tax accounting
each event and reports to the sport’s com-
plex manager. Juan’s marketing depart- 688. The process of decreasing the time and
ment is an example of which type of re- resources required by an activity is known
sponsibility center? as
A. Cost center A. activity reduction.
B. Profit center B. activity output measure.
C. Revenue center C. activity attributes.
D. Investment center D. activity analysis.
684. What is the thing that makes the Corpo- 689. The financial risks that arise because of
rate Investors one of the scope of Manage- possible losses due to changes in future
ment Accounting? market prices or rates.
A. Details of Costs A. Credit risk

B. Liquidity risk B. efficiency ratios

C. Market risk C. leverage ratios
D. Financing risk D. profitability ratios
690. Current ratio indicates 695. The use of fixed costs to extract higher
percentage changes in profits as sales ac-
A. Ability to meet short term obligations
tivity changes involves
B. Efficiency of Management
A. operating leverage
NARAYAN CHANGDER
C. Profitability
B. degree of operating leverage
D. None of these.
C. margin of safety
691. What would a savings & loan institution D. variable cost reduction
likely focus on?
696. sale of fixed assets are included in cash
A. investments and business loans
flow from
B. ways to save money and ways to
A. Operating
charge fees
B. Financing
C. offering ways to save money and loan-
ing money C. investing
D. biscuits & gravy D. None of the above
692. Which system of accounting is more pop- 697. Which of the following statements are
ular not true about budget, budgeting & bud-
getary control?
A. Double entry system
A. Budgetary control works on the basis
B. single entry system
of best option
C. both a and b B. Budget is one of the important medi-
D. none of these ums of communication
693. Which of the following is an advantage C. Budgeting develops the quality of ob-
of decentralization? jectivity in planning
A. leads to gains from rapid decision mak- D. None of the above

ing by subunit managers 698. is the first step of budgetary system
B. focuses manager’s attention on the or- and all other budgets depends on it.
ganization as a whole A. Cost budget
C. does not result in a duplication of ac- B. Sales budget
tivities
C. Production budget
D. reduces the cost of gathering informa-
tion D. None of the above
694. Financial ratios that tell how well a com- 699. The purpose of management accounting is
pany can pay off its short-term debts and to
meet unexpected needs for cash. A. Help banks to take decision
A. liquidity ratios B. Help investors make decision

C. Help managers make decision 705. Consider the following data produced
D. None of the above by a company over the last two years.
Activity level (000 units) Total produc-

700. MA Stands for tion cost ($000)20X1Q1 15 30020X1
A. Management Accounting Q2 45 61520X1 Q3 25 47020X1 Q4
55 68020X2 Q1 30 52020X2 Q2 20
B. Master Accounting 35020X2 Q3 35 59020X2 Q4 60 740Us-
C. Management Accountancy ing regression analysis calculate r2
D. None of the above A. .98
701. The Accounting Equation must always be B. .93
in balance?
A. True C. .92
B. False D. .96
702. If product 2 is dropped, which of the fol-

706. Financial Accounting is summarised bal-
lowing is true?
ance sheet, profit and loss, and cash flow,
meanwhile Management Accounting is a
range very detailed and speacifically fo-
cused reports. Is the difference between
Financial Accounting and Management Ac-
A. Sales will increase by $300, 000 counting in terms of?
B. Overall operation income will increase A. Frequency
by $2, 600
B. Format of Accounting Government by
C. Overall operating income will de-
crease by $25, 000 C. Primary Users
D. Only God knows D. Type of Information
703. When are loans a good option to use?
707. Which is the correct formula to calculate
A. To pay for airline tickets to your dream
the Cost of materials consumed?
vacation
B. When paying for higher education A. Opening raw materials + Purchase
of raw materials + Carriage inwards-
C. To buy that new television Closing raw materials
D. For a dream wedding
B. Closing raw materials-Purchase of
704. The financial statement that reports raw materials + Opening raw materials-
whether the business earned a profit and Carriage outwards
also lists the revenues and expenses is
called the: C. Opening raw materials + Purchase
of raw materials + Carriage outwards-
A. Balance Sheet Closing raw materials
B. Statement of Retained Earnings
D. Closing raw materials + Raw ma-
C. Statement of Cash Flows terials purchase + Carriage outwards-
D. Income Statement Closing raw materials

708. Which of the following is true: B. Dr Insurance $3300 Cr Wages $3300

A. When a second hand asset is pur- C. Dr Wages $3300 Cr Insurance $3300
chased than any expenditure incurred on D. Dr Bank $3300 Cr Wages $3300
it to put it into working condition is a cap-
ital expenditure 713. A combination of all the functional bud-
B. Carriage cost paid on purchase of gets of an organisation is
goods is classified as revenue expendi- A. Sales budget
ture.
NARAYAN CHANGDER
B. Cash budget
C. Cost of demolishing an old building to C. Functional budget
replace it with a new one is a capital ex-
penditure. D. Master budget
D. All are true 714. Patents and copyright is an
709. Which cost is more useful for decision A. Intangible fixed asset
making? B. Tangible fixed asset
A. Marginal cost C. Current asset
B. Fixed cost D. Investments
C. Total cost 715. Year 2009 Sales =120000 profit =
D. Opportunity cost 8000year 2010 sales = 140000 Profit =
130000 Find BEP, MOS of 2010
710. Fixed cost is also referred to as in the
A. 35%50000
marginal costing technique.
B. 25%52000
A. Total cost
C. 30%36000
B. Product cost
D. none of above
C. Period cost
D. Marginal Cost 716. The wages lost when you give up your
job to attend school full-time is an exam-
711. EOQ means ple of a(n):
A. Economic Ordering Quantity A. direct cost
B. Economic Ordering Quality B. Fixed costs.
C. Economic Order Quality C. Sunk cost.
D. None D. opportunity cost
712. The entry on May 15 was posted in er- 717. Fresh Food Market had an increase in net
ror. It should have been for insurance, not sales of 18.9%. The advertising expense
wages. Identify the entry needed to cor- increased by 9.3%. Which statement is
rect this error. correct about the change in the advertising
expense?
A. This is a favorable change because
the percentage increase in net sales was
A. Dr Insurance $3000, Dr GST Clearing greater than the percentage increase in
$300 Cr Wages $3300 the advertising expense.

B. This is a favorable change because the D. These statements are correct

difference in the increase in net sales and
the increase in the advertising expense 722. A budget is/does NOT

was less than 10.0%. A. A primary method of communication
C. This is a normal change because net
B. Promotes efficiency
sales increased, and the advertising ex-
pense increased. C. A means to always a profitable com-
pany
D. This is a normal change because the
advertising expense increased. D. Control device
718. Which of the following formula cannot be 723. Which one of the above graphs illustrates
used for calculating the contribution the costs described in the question?A step
A. Fixed cost plus profit fixed cost-when the vertical axis repre-
sents cost incurred
B. Fixed cost minus loss
C. Sales minus variable cost
D. Fixed cost plus loss
719. Limited liability companies must, by law,

prepare
A. Financial Acounting
B. Management Accounting A. Graph 3
720. Financial accounting B. Graph 4
A. is primarily concerned with internal re- C. Graph 5
porting. D. Graph 6
B. is more concerned with verifiable, his-
torical information than is cost account- 724. Financial accounting provides the primary
ing. source of information for:
C. focuses on the parts of the organiza- A. decision making in the finishing depart-
tion rather than the whole. ment
D. is specifically directed at management B. improving customer service
decision-making needs.
C. preparing the income statement for
721. Management accounting and financial ac- shareholders
counting are similar in that: D. planning next year’s operating budget
A. Let’s use the starting information of ac-
counting 725. Comparative Position statement analysis
is a
B. Together distribute information about
the economic and financial situation of the A. Short term analysis
business
B. Internal Analysis
C. Expressing the obligations and respon-
C. Horizontal analysis
sibilities of all levels of corporate gover-
nance D. Vertical analysis

726. Identify the right activities involved in 732. What is cost management?
Cash Flow Statement.i. Financing Activ-
itiesii. Operating Activitiesiii. Cash Bal-
ance Activitiesiv. Investing Activities
A. i, ii and iii
B. i, ii and iv
C. ii, iii and iv A. Process to create more value for cus-
NARAYAN CHANGDER
tomer with few resource
D. i, iii and iv
B. Tool to control the budget and ex-
727. Suppliers penses of a business.
C. Process of planning and controlling
A. Internal User
the budget and expenses
B. External User D. Process to plan the operating and ex-
panding expenditure.
728. The ideal level of liquid ratio is
A. 3:3 733. Contribution Margin Ratio is calculated
A. (Selling price-Variable costs)/Fixed
B. 1:1
costs
C. 2:2 B. Contribution margin/Fixed costs
D. All of the above C. (Selling price-Variable costs)/Sales
D. Contribution margin/Variable costs
729. Patient nights is the cost unit to ascertain
cost of 734. Patient nights is the cost unit to ascertain
A. Hotel cost of
B. Hospital A. Hotel
B. Hospital
C. Home-stay
C. Home-stay
D. Taxi
D. Accommodation services (AirBNB)
730. Gross Profit is 735. Management Accounting helps in
A. Excess of sales over total cost A. Planning
B. Excess of sales over cost of goods sold B. Organising
C. Excess of sales over purchase C. Decision making
D. Excess of sales over cost of material D. All of the above
736. In which year was the term management
731. Dividend received is shown in
accounting first used?
A. Investing activity
A. 1910
B. Financial activity B. 1939
C. Operating activity C. 1950
D. none of above D. 1926

737. The person who is supervising the labour- 741. A trader had the following transactions.
ers involved in production will be Credit sales $50 000, cash receipt of $10
000 from the sale of the old motor vehicle

A. Direct Labour
at book value. How would these transac-
B. Direct Expenses tions be classified in the trader’s books?
C. Indirect Labour A. Capital Receipt $60000
D. None of the above B. Revenue Receipt $60000
738. The flexible-budget variance for direct C. Revenue Receipt $50000, Capital Re-
cost inputs can be further subdivided into ceipt $10000
a: D. Revenue Receipt $10000, Capital Re-
A. static-budget variance and a sales- ceipt $50000
volume variance
742. Monthly variance reports are an exam-
B. sales-volume variance and an effi- ple of which one of the following types of
ciency variance management information?
C. price variance and an efficiency vari- A. Tactical
ance
B. Strategic
D. static-budget variance and a price vari-
ance C. Non-financial
D. Operational
739. Step Variable Costs
A. ESB Bill, Telephone 743. Property received as a result of the will
of the deceased person is called
B. Rent
A. Honorarium
C. Raw materials
B. Legacy
D. none of above
C. Donation
740. If you have a bank account and receive a D. Subscription
statement that tells you that you had NSF
because you went to Walmart and bought 744. Determining which products should be
something with debit card for $14.63 and produced when the plant is operating at
had $8.50 in your account, what does this full capacity is referred to as a(n):
mean and what happens? A. outsourcing analysis
A. No Such Fee; the transaction would go B. total alternative approach
through and you would have to pay the dif-
C. product-mix decision
ference
D. short-run focus decision
B. Non-Sufficient Funds; the transaction
would go through and you would owe the 745. Which of the following best describes in-
bank the difference plus an overdraft fee teractive control systems?
C. Non-Sufficient Funds; the transaction A. it articulates the mission, purpose,
would not go through and the bank would and core values of a company
alert you B. it articulates standards of behavior
D. National Service Fee; the transaction and codes of conduct expected of all em-
would go through and you would owe the ployees and help in achieving the maxi-
bank a $25 fee for going over your limit mum benefit

C. they are formal information systems 751. Total Cost =

managers use to focus the company’s at-
tention and learning on key strategic is-
sues
D. it describes the geographic limits of a
company and help organize its layout
746. Who is the user of ratio analysis?
NARAYAN CHANGDER
A. Management A. Direct Cost + Indirect Cost
B. Creditors & financial institutions B. Prime Cost + Factory Overhead
C. Investors C. Direct Expense + Indirect Expense
D. All D. Prime Cost + Production Cost
747. Inventory 752. Which of the following costs tire treated

as product cost under variable costing:
A. Owner’s Equity
A. Only direct costs
B. Asset
B. Only variable production costs
C. Expenses
C. Only material and labour costs
D. none of above
D. All variable and fixed manufacturing
748. What kind of financial statement is com- costs
prised of Revenues and Expenses?
753. The break-even point is when
A. Income Statement
A. the company is operating at a loss.
B. Balance Sheet
B. total revenue equals total cost.
C. Cash Flow Statement
C. the company is earning a small profit.
D. Asset Statement D. total sales equals operating income.
749. Planning is a function of 754. Manufacturing cost are the costs to pro-
A. Auditing duce a product. It is divided into direct cost
and indirect cost.
A. True
C. Financial Accounting
B. False
D. Cost Accounting
755. Concept:Financial statements are pre-
750. The term Management accounting was pared with the expectation that business
first used in will remain in operation indefinately
A. 1945 A. going concern
B. 1950 B. materiality
C. 1955 C. accounting period cycle
D. 1960 D. matching revenue with expenses

756. Increase in direct materials prices is not quality possible to reduce waste expenses.
likely to be a reason of unfavorable direct She also makes sure that the electricity bill
labor efficiency variance and other utility bills are as low as pos-

A. Yes sible with the highest possible output of
products manufactured. Which branch of
B. No accounting is Kelsie under?
757. Which is not included in budget account- A. Auditing
ability B. Cost Accounting
A. Cost Center C. Financial Accounting
B. Revenue Center D. Management Accounting
C. Investment Center E. Tax Accounting
D. Share Center
761. Why would a company adopt a decentral-
758. Gallon Corporation had $24, 000 of raw ized organization?
materials on hand on April 1. During the A. To train and motivate divisions man-
month, the Corporation purchased an addi- agers
tional $52, 000 of raw materials. During
B. To let top management focus on strate-
April, $62, 000 of raw materials were req-
gic planning
uisitioned from the storeroom for use in
production. These raw materials included C. To allow division managers to make im-
both direct and indirect materials. The indi- portant operating decisions
rect materials totaled $2, 000. The debits D. all of the above
to the Work in Process account as a conse-
quence of the raw materials transactions 762. The is a measure of liquidity that ex-
in April total: cludes generally the least liquid asset.
A. $60, 000 A. Liquid ratio, Accounts receivable.
B. $62, 000 B. Current ratio, inventory.
C. $0 C. Liquid ratio, inventory.
D. $52, 000 D. Current ratio, Accounts receivable.
759. The percentage analysis of increases and 763. The company repays the bank that had
decreases in individual items in compara- lent money
tive financial statements is called: A. Assets (I)
A. vertical analysis B. Liabilities (D)
B. solvency analysis C. Equity (D)
C. profitability analysis D. none of above
D. horizontal analysis 764. THE COMPANY IS EXPECTED TO CON-
760. Kelsie work for TLE manufacturing Corpo- TRIBUTE DIRECTLY TO THE COMMUNITY
ration. She is under the accounting depart- BY IMPROVING THE QUALITY OF LIFE
ment mainly responsible for making sure OF THE COMMUNITY AND THE ENVIRON-
that the her company gets the cheapest MENT IS THE MEANING FROM
prices of raw materials with the highest A. SOCIAL ASPECT

B. POLITICAL ASPECT B. AQ 5000

C. ECONOMY ASPECT C. AP 4.00
D. PUBLIC WALFARE ASPECT D. SP 5.00
765. The Electricity expenses for 10, 000 units 771. During July at Loeb Corporation, $83,
of output is Rs 22, 500 and that for pro- 000 of raw materials were requisitioned
ducing 15, 000 units is Rs. 32, 500. What from the storeroom for use in production.
is the per unit variable cost These raw materials included both direct
NARAYAN CHANGDER
A. Rs. 2 and indirect materials. The indirect mate-
rials totaled $4, 000. The journal entry to
B. Rs. 2.25 record the requisition from the storeroom
C. Rs. 2.17 would include a:
D. Rs. 2.20 A. debit to Work in Process of $79, 000
766. If PVR=40%, MOS=50%, Sales=Rs.6,
00, 000. Find Net profit. C. credit to Manufacturing Overhead of
A. Rs 1, 50, 000 $4, 000
B. Rs 1, 00, 000 D. debit to Raw Materials of $83, 000
C. Rs.1, 20, 000 772. Funds flow statements are prepared so

D. Rs.1, 60, 000 as to
A. To identify the changes in working cap-
767. A semi variable cost increases at a dimin- ital
ishing rate in proportion to the output
B. To identify reasons behind change in
A. True working capital
B. False C. To know the item-wise outflow of
funds during given period
768. Costs which are categorized as functional
costs include manufacturing cost, cost of D. All of the above
goods sold and manufacturing costs.
773. Equity or Shareholders fund is equal to
A. True
B. False A. Equity share capital + Preference
share capital.
769. Corporate governance is same as corpo-
rate social responsibility B. Equity share capital + Revenues and
A. True Surplus.
B. False C. Equity share capital + Preference

share capital + Revenues and Surplus.
770. material 10kgs Standard price is 4.00rs. D. None of the options are correct.
Actual production is 500 units of product
material used 3000kgs and price is 5.00 774. Which of the following would NOT be
rs. what is the missing figure to calculated considered as internal users of accounting
material variances data for a company?
A. SQ 5000 A. External auditor

B. CEO of the company C. activity cost driver

C. President of the company D. basis of apportionment

D. Salesman of the company 779. The amount of money you’re paid, after
775. Which organization is responsible for In- all taxes and deductions are taken out of
ternational Financial Reporting Standards your paycheck is called
(IFRS)? A. Gross Pay
A. UK FRS B. Net Pay
B. IASB C. Total Pay
C. UK GAAP D. Taxes
D. UK FRC
780. Cost accounting provides
776. In the Schedule of Cost of Goods Manu- A. significant cost classification
factured and Cost of Goods Sold, the cost
B. relevant cost for decision making
of goods manufactured is computed accord-
ing to which of the following equations? C. acsertains costs of production
A. Cost of goods manufactured = Total D. cost objects
manufacturing costs + Ending work in
process inventory-Beginning work in pro- 781. Choose the correct option
cess inventory
B. Cost of goods manufactured = Total
manufacturing costs + Beginning work in
process inventory-Ending work in process
inventory
C. Cost of goods manufactured = To- A. Percentage component bar chart
tal manufacturing costs + Beginning B. Scatter diagram
finished goods inventory-Ending finished C. Line graph
goods inventory
D. Pie chart
D. Cost of goods manufactured = Total
manufacturing costs + Ending finished 782. To find out the predicted amount of raw
goods inventory-Beginning finished goods material spending, you can refer to
inventory
A. Production Budget
777. Amortization is depreciation of intangible B. Sales Budget
assets
C. Direct Material Purchase Budget
A. True
D. Inventory Budget
B. False
783. The term current assets don’t cover
778. In the activity-based costing implementa-
tion, the indirect costs are allocated by us- A. Car
ing B. Debtors
A. support tracing C. Stock
B. sustained tracing D. Prepaid Expenses

784. Do we need to borrow in the near future? C. Owner’s equity

A. Creditors D. Current liabilities
B. Finance 790. Concept:Business transactions are re-
C. Management ported in numbers that have common val-
ues. Meaning all reporting should be done
D. Investors
in terms of money
785. Cash Flow Statement is based upon A. Unit of measurement
NARAYAN CHANGDER
A. Cash basis of accounting B. historical cost
B. Accrual basis of accounting C. materiality
C. Credit basis of accounting D. matching expenses with revenue
D. None of the above 791. All of the following statements are cor-
rect, except for?
786. Formula for Shut Down Point is?
A. Service businesses purchase supplies
A. Fixed Cost/ Cont p.u
B. Trading businesses purchase invento-
B. Avoidable Fixed Cost/ Cont p.u ries
C. Unavoidable Fixed Cost/ Cont p.u C. Service businesses earn trading rev-
D. Variable Cost/Cont p.u. enue
787. What are the main elements of the bal- D. Trading businesses earn sales
anced scorecard, except? 792. Which of the following would probably
A. Financial be a variable cost in a soda bottling plant?
B. External business processes A. None of these
C. Customer B. Time spent by adjusters to evaluate ac-
cidents
D. Learning and growth
C. Application forms
788. A TQM team at ABC Corp. has recorded D. The salary of customer service repre-
the following average times for produc- sentatives
tion:* Wait 3.0 days* Inspection 0.4 days*
Process 0.2 days* Move 0.5 days* Queue 793. The analysis which is known as a static
7.3 daysWhat is the delivery cycle time analysis
(DCT)? A. Vertical
A. 0.5 days B. Long term
B. 0.7 days C. External
C. 10.4 days D. Internal
D. 13.4 days 794. What is another word used to describe a
company’s liabilities?
789. Maryam have to prepare a Balance Sheet
of her own company. Select the term that A. Debts
is NOT included in Balance Sheet. B. Expenses
A. Non-current assets C. Cash
B. Expenses D. Cashflow

795. Which of the following statements are 800. The process of budgeting helps in the con-
true about budget, budgeting & budgetary trol of
control

A. Cost of production
A. Budgeting is business estimates for fu- B. Liquidity
ture periods
C. Capital Expenditure
B. Budget is the process of preparing
business estimates D. All of the above
C. Budgetary control is the means to 801. When accounting for Raw Materials, how
achieve performance on the basis of bud- do you record receipts (goods in) from a
get goods received note?
D. None of the above A. Dr Materials Control, Cr Bank/Receivables
796. The process of budgeting includes
B. Dr Bank, Cr Materials Control
A. Preparation of budget
C. Dr Materials Control, Cr Bank/Payables
B. Budget Control
C. Budget co-ordination D. Dr WIP Control, Cr Bank/Payables
D. All of the above
802. Stock is considered as a liquid asset as
797. CC Ltd manufactures a carbonated drink anytime it can be converted into cash im-
which is sold in 1 litre bottles. During the mediately.
bottling process there is a 10% loss of liq- A. yes
uid input due to spillage and evaporation.
The standard usage of liquid per bottle is: B. no
A. 1.25 liters 803. A professional accountant should be
B. 1.11 liters straight forward, honest in all profes-
sional business relationship
C. 1.20 liters
A. Professional behaviour
D. 1.12 liters
B. Professional competence and due
798. Fixed budgets are useful for planning pur- care
poses or for when the activity level is un- C. Objectivity
likely to change
D. Integrity
A. True
B. False 804. Management accounting highlights staff
relationship with top management as well
799. Deals with the activities which involves as other personnel.
the recording and preparation of reports A. True
known as financial statements
B. False
B. Management Accounting 805. The type or branch of accounting that gen-
erates reports for the use of external par-
C. Accounting Education ties such as creditors, investors and gov-
D. Cost Accounting ernment agencies is known as:

A. Financial accounting NATURAL RESOURCES, FLORA, FAUNA,

B. Managerial accounting HUMANS AND THEIR SELLING AND SELL-
ING INTERACTIONS
C. Tax accounting
D. ENVIRONMENT IS THE CONDITION OF
D. Forensic accounting
THE SURROUNDING WHERE THE ORGANI-
806. The is the percentage indicator of ZATION OPERATS, ie SOIL, NATURAL RE-
Capital that is transformed into Profits. SOURCES, FLORA, FAUNA, HUMANS AND
It measures the profitability obtained by ALL ITS INTERACTIONS
NARAYAN CHANGDER
each peso that the company has invested
in its own business, relating the profits 810. Goodwill is
generated to the company’s assets.
A. Current Asset
A. ROIC (Return on Invested Capital)
B. Fictitious Asset
B. ROE (Return on Equity)
C. Intangible Asset
C. ROA (Return on Assets)
D. RFR (Risk Free Rate) D. Tangible Asset
807. Production supervisor 811. The Accounting Entity means

A. Internal User A. the business is a separate accounting
B. External User entity from its owner.
808. Select all examples of owner’s equity ac- B. the business is not a separate account-
counts ing entity from its owner.
A. cash C. the owner has permission to takes fi-
B. owner’s capital nance from the business and spend it on
personal expenses
C. accounts payable
D. none of above
D. owner’s drawing
809. WHAT IS THE MEANING OF THE ENVI- 812. The two classes of budgets are:
RONMENT ACCORDING TO ISO 14001? A. Operating & Financial
A. ENVIRONMENT IS THE CONDITION OF
B. Variable & Fixed
THE SURROUNDING WHERE THE ORGANI-
ZATION OPERATS, ie AIR, WATER, SOIL, C. Sales & Product
NATURAL RESOURCES, FLORA, FAUNA,
HUMANS AND ALL ITS INTERACTIONS D. Direct materials & Direct labor
B. ENVIRONMENT IS THE CONDITION OF 813. Variable Costs

THE SURROUNDING WHERE AN ORGA-
NIZATION IS AUTHORIZED, ie AIR, WA- A. change with the volume of production.
TER, SOIL, NATURAL RESOURCES, FLORA, B. remain the same irrespect of the num-
FAUNA, HUMANS AND ALL ITS INTERAC- ber of units produced
TIONS
C. are all the valueable cost items in pro-
C. ENVIRONMENT IS THE CONDITION OF
duction
THE SURROUNDING WHERE AN ORGANI-
ZATION OPERATES, ie AIR, WATER, SOIL, D. are rent and insurance costs

814. Miss Griffin owns a bookstore, which of B. Organize implementation and review
the following would be revenue receipts?
C. Make a decision to take action

A. Cash discount from a supplier of sta-
D. All of the above statements are correct
tionery
B. Money received from selling an old 820. Which of the following are tools of man-
bookshelf agement accounting?A) Decision account-
C. Money received from the bank for ex- ingB) Standard costingC) Budgetary con-
pansion of the bookstore trolD) Human Resources Accounting
D. Purchase of new stock from a pub-
lisher
815. Gross profit is incurred when

A. Net Sales are equal to Net Purchases
B. Net Purchase is more than Net Sales
C. Sales are less than cost of goods sold
D. Sales exceed the cost of sales A. A, B and D
816. Cost re classified into four main cat- B. A, C and D
egories which are function, behaviour,
C. A, B and C
traceability and relevancy.
D. A, B, C, D
A. True
B. False 821. Which of the following is an example of
an asset?
817. Recruitment cost
A. Vehicle
A. Shall form part of prime cost
B. Electricity
B. Shall form part of works cost
C. Shall form part of overheads C. Mortgage
D. Shall be ignored D. none of above
818. Determine Working capital turnover ratio 822. Money received from a business investor
if, Current assets is Rs 1, 50, 000, cur- would be an example of
rent liabilities is Rs 1, 00, 000 and Cost A. cash inflow
of goods sold is Rs 3, 00, 000.
B. cash outflow
A. 5 times
B. 6 times 823. Loan Funds consists of
C. 3 times A. Working Capital + Loans
D. 1.5 times B. Bank Loan + Preliminary expenses
819. Management accounting provides infor- C. Shareholder’s equity + Reserves and
mation mainly to managers in: Surplus
A. Planning D. Term Loan + Debentures

824. Find the odd one 830. The P/V ratio of a product is 0.6 and
A. Comparative statement analysis profit is Rs. 9, 000. The margin of safety
is
B. Common size statement analysis
A. Rs. 5400
C. Trend analysis
B. Rs. 15000
D. Ratio analysis
C. Rs. 22500
825. THE ENVIRONMENTAL COST DEVIDED TO
D. Rs. 3600
NARAYAN CHANGDER
FOUR COSTS
A. PREVENTION COSTS, DETECTION 831. In management accounting an emphasis
COSTS, INTERNAL FAILURE COSTS AND and focus must be
EXTERNAL FAILURE COSTS
A. Future oriented
B. PREVENTION COSTS, ELIMINATION
COSTS, INTERNAL FAILURE COSTS AND B. Past oriented
EXTERNAL FAILURE COSTS C. Bank oriented
C. PREVENTION COSTS, DETECTION D. Communication oriented
COSTS, INTERNATIONAL FAILURE COSTS
AND EXTERNAL FAILURE COSTS 832. Choose the correct option
D. PREVENTION COSTS, DETECTION
COSTS, INTERNAL FAILURE COSTS AND
EXTREME FAILURE COSTS
826. ISO 14001 certification is a requirement

for organizations implementing Environ-
mental Management Accounting. A. Internal users
A. TRUE B. External users
B. FALSE
833. Basic objective of cost accounting is
827. Interest paid is shown in A. Cost Ascertainment
A. Financial activity B. Audit Purpose
B. Investing activity
C. Tax Compliance
C. Operating activity
D. none of above
834. Which of the following options is not
828. Budgeted financial statements are also characteristic of management accounting?
referred to as pro forma statements.
A. Future-oriented
A. True
B. Accounting information
B. False
C. Compulsory accounting.
829. Chargeable expenses is another name for
direct expenses D. Management oriented
Explanation:Management accounting is
A. True not mandatorily done in all financial insti-
B. False tutions or companies.

835. What is ABC system? 841. Liability accounts increase with a

A. A method of dividing on hand inventory A. debit

into 3 classifications, B. credit
B. A method of segregate the inventory
into 3 classifications. 842. Which of the following is not a Branch of
Accounting
836. The cost of goods sold (COGS) is the ac-
countant’s term for the direct costs of the-
goods thatareactually sold, e.g. raw ma- B. Money Accounting
terial costs C. Cost Accounting
A. TRUE D. Management Accounting
B. FALSE
843. Which of the following is NOT an exam-
837. When material prices are fluctuating ple of revenue Income
rapidly, this is the best method to use A. Early Payment Discounts
A. LIFO B. Cash from sales
B. FIFO C. Owners Capital
C. AVCO D. Interest Received
D. LICO
844. The transfering of work from a spe-
838. Current assets divided by current liabili- cific area of the company ( e.g. account-
ties is the ing, manufacturing) to an outside supplier,
A. Current ratio which can be done to a company that is
located in the home country or anywhere
B. Net worth else is called
C. Working capital A. Offshoring
D. Quick ratio B. Outsourcing
839. Quick assets are Current assets minus C. Globalization
A. Bank D. none of above
B. Stock 845. This is concerned with ‘the provision of
C. Cash information to assist management with
D. Bank overdraft planning, decision-making and control.’
840. Good information should have certain
qualities.Which TWO of the following are B. Management Accounting
required as qualities of good management
information?
A. Complete
B. Extensive
C. True and fair
D. Accurate A. $1.80

B. $0.97
C. $2.80
D. $3.40
847. is it a Capital receipt or revenue receipts
NARAYAN CHANGDER
A. Capital receipts A. Internal users
B. Revenue receipts B. External users
848. If income is |.16, 000 and ‘deficit’ deb- 852. Which one of the following items would
ited to capital fund is |.4, 300, then ex- never appear on a cash budget?
penditure is
A. Office salaries expense
A. |.20, 300
B. Interest expense
B. |.16, 000
C. Depreciation expense
C. |.4, 300
D. None of the above D. Travel expense
849. When machine-hours are used as an over- 853. accounting principles are generally based
head cost-allocation base and annual leas- on
ing costs for equipment unexpectedly in- A. practicability
crease, the most likely result would be to
B. subjectivity
report a(n):
A. unfavorable variable overhead spend- C. objectivity
ing variance D. none of above
B. favorable variable overhead efficiency
854. What is the first level of pricing decision
variance
making?
C. unfavorable fixed overhead flexible-
A. Strategic decision making
budget variance
D. favorable production-volume variance B. Tactical decision making
C. Operational decision making
850. How many people does your company
? D. Market strategy decision making
A. employ 855. Which of the following is never included

B. produce in product cost?
C. profit A. overhead
D. cost B. direct materials
C. variable selling expense
851. Parties outside the reporting entity or
company D. fixed factory overhead

856. Generally Accepted Accounting Principles B. Fixed cost

(GAAP) require the use of which account- C. Variable cost
ing method for external reporting?

D. Change order cost
A. absorption costing.
862. depreciation on plant and machinery will
B. variable costing.
be recorded in
C. transfer price costing. A. trading account debit side
D. responsibility costing. B. balancesheet asset side
857. Variable costing is C. profit and loss account debit side
A. a good way to value inventories for the D. profit and loss account credit side
balance sheet.
863. Emigh Corporation’s cost of goods manu-
B. used for external reporting purposes. factured for the just completed month was
C. not useful for companies with multiple $146, 000 and its overhead was overap-
segments. plied by $5, 000. The beginning finished
goods inventory was $35, 000 and the
D. a useful tool for management decision ending finished goods inventory was $37,
making. 000. The company closes out any underap-
858. requires the management to look a plied or overapplied manufacturing over-
head and establish objectives. A key ob- head to cost of goods sold. How much
jective of management is to add value to was the adjusted cost of goods sold on the
the business. Schedule of Cost of Goods Sold?
A. $144, 000
A. Planning
B. $146, 000
B. Controlling
C. $181, 000
C. Decision Making
D. $139, 000
D. none of above
864. collects, analyses, and understands
859. Telephone costs for the office forms part the financial, qualitative, and statistical in-
of the factory overheads? formation to help the management make
A. True effective decisions about the business.
B. False A. Financial accounting
B. Cost accounting
860. What is the second level of pricing deci-
sion making? C. Management accounting
A. Tactical decision making D. none of above
B. Strategic decision making 865. Piekos Corporation incurred $90, 000 of

actual Manufacturing Overhead costs dur-
C. Operational decision making
ing June. During the same period, the Man-
D. Market strategy decision making ufacturing Overhead applied to Work in
Process was $92, 000. The journal en-
861. The total cost tend to change as to level try to record the application of Manufac-
of activity changes turing Overhead to Work in Process would
A. Period cost include a:

A. debit to Manufacturing Overhead of 871. corporate governance is mechanism

$92, 000
A. self regulatory
B. government controlled
C. credit to Manufacturing Overhead of
$92, 000 C. external controlled
D. credit to Work in Process of $90, 000 D. none of above
866. Does the following transaction result in 872. Which of the following would be an ex-
NARAYAN CHANGDER
Change in Working Capital as per Funds ample of a direct materials cost?
flow statement?” Income Tax paid”
A. engine on an airplane
A. Yes
B. No B. lubricant used to manufacture a light-
ing fixture
867. Liquid ratio is also known asA. Quick ra-
tioB. Acid test ratioC. Working capital ra- C. glue used to build cabinets
tioD. Stock turnover ratio D. nails used to manufacture a table
A. A & B
873. R&D budget and Capital expenditure bud-
B. A & C
get are examples of
C. B & C
A. Short-term budget
D. C & D
B. Current budget
868. Which of the following is not a current
asset? C. Long-term budget
A. Cash D. None of the above

B. Stock
874. Revenue is the positive difference be-
C. Prepaid Insurance tween a firm’s revenues and its costs.
D. Plant A. TRUE
869. who may need accounting information to B. FALSE
decide which products to buy from which
companies: 875. The analysis and interpretations of finan-
A. Investors cial statement will reveal
B. Creditors A. The profitability
C. Customers B. The financial position
D. Company’s owner
C. Both A & B
870. Person’s reputation for paying bills on D. None of the above
time.
A. net worth 876. Corporate governance does not have any
B. credit card impact on the share price.
C. bankruptcy A. True
D. credit rating B. False

877. Which of the following is an example of 880. An individual or organisation to whom

a service? money or service is owed by the company.

A. motorcycle A. Creditor
B. eye exam B. Debtor
C. stereo C. Shareholder
D. television D. Purchaser
878. WHAT IS THE DEFINITION OF THE ENVI- 881. If the cost of goods sold is $8000, the
RONMENT ACCORDING TO LAW NO. 23 gross margin is $5000 then the revenue
YEAR 1997? will be
A. THE UNITONE OF SPACE WITH ALL A. $13, 000
THINGS, POWER, CONDITIONS, AND LIV-
B. -$13000
ING THINGS, INCLUDING HUMANS, AND
THEIR BEHAVIOR THAT AFFECTS THE C. $3, 000
CONTINUITY OF LIFE AND THE WELFARE D. -$3000
OF HUMANS AND OTHER LIVING BEHAV-
IORS 882. TEK, Inc., is considering whether to re-
B. THE UNITONE WITH ALL OBJECTS, place a production machine with a newer
POWERS, CONDITIONS, AND LIVING model of the same machine. If TEK keeps
THINGS, INCLUDING HUMANS, AND the old machine, the trade-in value of the
THEIR BEHAVIOR THAT AFFECTS THE old machine is an example of a(n)
CONTINUITY OF LIFE AND WELFARE OF A. avoidable cost
HUMANS AND OTHER PLANET LIVING BE-
HAVIORS B. sunk cost
C. THE UNITONE OF SPACE WITH ALL OB- C. opportunity cost

JECTS, RESOURCES, AND LIVING THINGS, D. variable Cost
INCLUDING HUMANS, AND THEIR HABI-
TAT THAT AFFECT THE CONTINUITY OF 883. Book keeping is mainly concerned with
LIFE AND WELFARE OF HUMANS AND A. Recording of financial data
OTHER LIVING BEINGS
B. Designing the systems in record-
D. A UNIT WITH ALL OBJECTS, POWER, ing, classifying, and summarizing the
CONDITIONS, AND LIVING THINGS, IN- recorded data
CLUDING HUMANS, AND THEIR BEHAV-
IOR THAT AFFECT LIFE AND WELFARE OF C. Interpreting the data for internal and
HUMANS AND OTHER LIVING BEHAVIORS external users
879. Indirect costs examples
A. utility cost 884. Management accounting is:
B. sales manager salary A. Specific detailed accounting of eco-
nomic and financial accounting to gather
C. direct materials budgets and calculate product prices
D. direct labour B. A department of economic and finan-
E. factory insurance cial accounting for business management

C. An independent accounting depart- 890. As volume/unit decreases, total fixed

ment with economic and financial account- costs
ing for business management A. are constant and cost per unit de-
D. General accounting of economic and fi- creases
nancial accounting B. are constant and cost per unit in-
creases
885. What are the Roles of a Management Ac-
countant? C. increase
NARAYAN CHANGDER
D. decrease
A. Statutory Reporting
B. Controlling 891. The price that one division of a company
charges another division for goods and ser-
C. Auditing vices provided is called
D. Decision Making A. Market price
B. Outlay price
886. Which is not a category of cash flow?
C. Distress price
A. Operating
D. Transfer price
B. Investing
892. “Managemnt Accounting is the process
C. Financing
of identification measurement accumula-
D. Current Assets tion analysis preparation interpretation
and communication of information that as-
887. What is the reporting frequency for man- sist executives in fulfilling organisational
agement accounting? objectives” this definition given by
A. Once at the end of accounting period A. Charles T Horngren
B. As frequently as information needed B. American Accountants
for decision making purposes C. smith
D. asburne
888. If Liabilities are $23, 000 and Capital is
$9, 750, how much are Assets? 893. Which of these is not a component of
A. $23, 000 Prime Cost
B. $32, 750 A. Direct Material

B. Direct Labour
C. $13, 250
C. Direct Expenses
D. none of above
D. Factory Expenses
889. “The allotment of overheads to cost
894. Which of the following are tools of man-
units” is a definition for
agement accounting?
A. ABC method A. Standard costing
B. Absorption method B. Marginal costing
C. High and low method C. Budgetary control
D. Period cost manufacturing method D. All of the above

895. Can we afford to give our employees a

pay raise?

A. Human Resource
B. Finance
C. Management
D. Labour Union
896. Capital Expenditure is money spent by

the business on non-current assets that
will stay in the business for a reasonable A. Added to purchases
period of time; (E.g Land)
B. Subtracted from purchases
A. True C. Added to revenue
B. False D. Subtracted from revenue
897. Payment of Electricity Bill 902. The amount of sales quantity required to
earn a targeted profit is equal to
A. Capital Expenditure
A. total fixed cost plus targeted profit di-
B. Revenue Expenditure vided by contribution margin per unit
898. A budgeting process which demands each B. total fixed cost divided by contribution
manager to justify his entire budget in de- margin per unit
tail from beginning isa. b. c. d. C. targeted profit divided by the contribu-
A. Functional budget tion margin per unit
D. targeted profit divided by the variable
B. Master budget
cost ratio
C. Zero base budgeting
903. Michelle wants to know her company’s
D. None of the above anticipated cash outflows for the upcoming
year. Which schedule would give Michelle
899. A cost which does not vary with volume this information?
of production is called
A. Sales Budget
A. fixed cost
B. Budgeted Income
B. semi variable cost C. Cash Receipts Budget
C. semi fixed cost D. Cash Payments Budget
D. variable cost
904. Cost of Production + Opening stock of
Finished goods-Closing stock of finished
900. Owner’s drawing and expenses decrease
goods is equal to
with a
A. Cost of Goods Sold
A. debit
B. Cost of Sales
B. credit
C. Total Cost
901. Carriage inwards is D. Factory cost

905. An accounting term for a company that B. Rs 1, 04, 000

has the resources needed to continue oper- C. Rs 9, 00, 000
ating indefinitely until it provides evidence
to the contrary D. Rs 9, 04, 000
A. Liquidity 910. TWO TYPES OF TECHNIQUES

B. Assets A. FINANCIALLY-ORIENTED
C. Liabilities B. COST-ORIENTED
NARAYAN CHANGDER
D. Going Concern C. ENVIRONMENTAL-ORIENTED
D. PHYSICALLY-ORIENTED
906. In a segmented income statement, which
of the following statements is true? 911. While computing profit in marginal cost-
A. Segment margin is equal to contribu- ing
tion margin less direct fixed expenses A. Fixed costs gets added to the contribu-
tion
B. Common fixed expenses must be allo-
cated to each segment B. Marginal costing is not an independent
system of costing
C. Segment margin is greater than contri-
bution margin C. Marginal costing is not an independent
system of costing
D. I don’t understand the answer until I
want to cry D. Both (Marginal costing is not an inde-
pendent system of costing and Marginal
907. A master budget consists of costing is not an independent system of
A. an interrelated long-term plan and op- costing)
erating budgets. 912. Choose the correct option
B. financial budgets and a long-term plan
C. interrelated financial budgets and op-
erating budgets.
D. all the accounting journals and ledgers A. i is true and ii is false
used by a company. B. ii is true and i is false
908. Statement of Cash Flow shows the move- C. Both are true
ment in owner’s equity over a period D. Both are false
A. True 913. = Sales revenue-Cost of goods
B. False A. Gross Profit
909. In the balance sheet of Praveen for 2013 B. Revenue
and 2014, 4% debentures are Rs 5, 00, 914. What are personal assets?
000 and Rs 4, 00, 000, respectively.
Profit on redemption of debentures in A. your items of value
2013 is nil while in 2014 is Rs 4, 000. B. an amount of money that one can use
What is the amount of redemption for the for a certain budget category
purpose of funds flow statement? C. person’s reputation for paying bills on
A. Rs 96, 000 time

D. report showing status of a bank ac- C. the measurement of volume of profit

count to be earned

915. Which personnel of a financial firm plays D. None of the above
a key role in management accounting 919. also known as subsidiary budgets.
A. Investors A. Master budget
B. Managers B. Functional budget
C. Suppliers C. Cost budget
D. Customers D. None of the above
916. hours of skilled labour are required for 920. A historical cost which is not relevant in
the job. The Idle time for current labour any future decision
force is 70 hours. The per hour rate is A. Imputed Cost
Rs.25/-. What is the relevant labour
cost? B. Opportunity Cost
A. 2500 C. Sunk Cost

D. Normal Cost
B. 750
C. 1750 921. Which is used as an indicator of how well
managed and healthy a company is, espe-
D. 1250
cially when it comes to reducing expenses
917. Facing Outwards refers to: and growing revenue?
A. Non-financial measures are increas- A. Cashflow
ingly being used to manage the business. B. Revenue Statement
B. Modern costing and cost management C. Profit Margin
techniques, such as total life-cycle cost- D. Taxable Income
ing, target costing and kaizen costing, re-
flect a concern for long-term cost man- 922. During March, the cost of goods manufac-
agement. As a result, they fall within the tured was $62, 000. The beginning fin-
scope of strategic management account- ishedgoods inventory was $11, 000 and
ing the ending finished goods inventory was
C. It encourages a balanced approach to $19, 000.What was the cost of goods sold
managing the business for the month?
D. Competitor analysis examines the ob- A. $70, 000

jectives, strategies, assumptions and re- B. $92, 000
source capabilities of competitors. The C. $54, 000
purpose is to gain a source of competitive
D. $62, 000
advantage
923. What is not correct about ABC:
918. P/V Ratio is an indicator of
A. Less accurate
A. the measurement of rate at which
goods and services are bought and sold B. Difficult to implement
B. the measurement of change in profit C. Time consuming
due to change in volume of sales D. Massive amount of data

924. Fixed cost is also known as C. Rs 122

A. Flexible cost D. Rs 1, 22, 000
B. Marginal cost
929. are the outflowof money from a busi-
C. Period cost ness due to its operations, e.g. wages,
D. All of the above salaries, rent and the purchase of stock.
A. profit
925. Book value is defined as the:
NARAYAN CHANGDER
B. costs
A. sum of the original cost of an asset and
the accumulated depreciation
930. which of the following statements are
B. difference between the market value true?
of an asset and the accumulated depreci-
ation
C. difference between the original cost of
an asset and the accumulated deprecia-
tion A. 1 and 2 only
D. sum of the market value of an asset B. 1 and 3 only
and the accumulated depreciation
C. 2 and 3 only
926. The company purchases land by paying D. 1, 2 and 3
half in cash and signing a note
A. Assets (NE) 931. the records daily transactions of a
business in the order in which they occur
B. Liabilities (I)
A. journal
C. Equity (I)
D. none of above B. ledger
C. account
927. balancesheet is an account
D. trial balance
A. true
B. false 932. Fixed cost includes
C. not acceptable A. Property taxes
D. its a statement B. Rent
928. Given Production at 60% activity, 600 C. Insurance premium

units, Material Rs 50 per unit, Labour Rs D. All of the above
20 per unit, Direct expenses Rs 5 per unit,
Factory overheads Rs 20, 000 ( 60% vari- 933. Dividend received by the financing com-
able) and Administration expenses Rs 15, pany is classified under activity.
000 ( 60% fixed). What will be the total
A. Operating
cost per unit for production at 80% capac-
ity? B. Financing
A. Rs 1, 01, 000 C. Investing
B. Rs 126.25 D. None

934. Cost accounting concepts include all the A. $15

following except
B. $165

A. Planning
C. $1500
B. Controlling
D. $1650
C. Profit sharing
D. Product costing 939. In evaluating an investment center, top
management should concentrate on
935. A trader wishes to know the cost of
goods sold during the year.Which financial A. net income
statement will provide the answer?
B. salt weight
A. Statement of Financial Position (Bal-
ance Sheet) C. profit percentages
B. Profit and Loss Account D. return on investment

C. Trading Account
940. Wood Co makes chairs and tables. Which
D. Trial Balance TWO of the following items would be
treated as an indirect cost?
936. What are the roles of the cost and man-
agement accountant? A. Wood used to make chair
A. To establish the cost of running each B. Metal used for the legs of a chair
department.
C. Staple to attach fire retardant labels to
B. To compare budgeted costs with ac- chairs
tual costs.
D. Fabric to cover the seat of a chair
C. To prepare budgets-production, de-
partmental, and master budgets. E. The salary of the sales director of the
D. Deciding on what the future cost of run- company
ning each department will be.
941. The following is the formula to calculate
E. To establish the cost of producing a Gross Profit
product.
A. Revenue-Cost of Sales
937. It is an offer of service. When accepted or
approved, it becomes a contractual agree- B. Revenue-All Expenses
ment. C. Revenue + Cost of Sales
A. Proposal letter D. Expenses + Cost of Sales
B. Confirmation letter
C. Engagement letter 942. If total cost of 100 units is Rs. 5000
and those of 101 units is Rs. 5030 then
D. Contract increase of Rs. 30 in total cost is
938. Given the GST Clearing Ledger account A. Marginal cost
shown, calculate the amount paid for Sup-
plies including GST. B. All variable cost
C. Prime cost

943. Operating Budget produces 948. Why management of a company need to

A. Project Income Statement know the cost of a product?
B. Cash Budget A. To make the products famous

C. Budget report for production activities B. To determine the selling price
D. Direct Material Budget C. To determine the GST
D. To get profit
944. Transport inwards is an example of Or-
NARAYAN CHANGDER
dering costs 949. which two of the following statements
A. True about management accounting information
B. False are true?
A. It may include non-financial informa-
945. Budget tion
A. A budget that is based on several pos- B. It is required by law to be produced
sible levels of sales activity, also known
as a variable budget. C. It is used to aid planning
B. A budget that allows an establishment D. It is for use by parties external to the
to plan for the replacement of high-cost organisations
equipment that wears out, and to pur-
chase new types of equipment that may 950. Variable cost per hour is
come on the market.
C. A budget from one year to five years in
the future.
D. A plan that indicates an operation’s fi-
A. Rs. 1.75
nancial objectives or financial standards.
B. Rs. 1.50
946. Owners of business firms are the only
people who need accounting information. C. Rs. 1.45
D. Rs. 1.55
951. Operating Profit is

A. Operating expenses only
B. Cost of goods only
C. Non operating expenses
A. True
D. Gross profit less Operating expenses
B. False
947. The part of total cost which changes due 952. What is the roles of management accoun-
to change in output by 1 unit is tant?
A. Opportunity Cost A. Provide budgeting information and ac-

counting reports
B. Relevant Cost
B. Responsible for carrying out the task
C. Marginal Cost of helping the management in making de-
D. Imputed Cost cision for production and process

C. Assist departments in achieving the or- this machine has broken down and can-
ganization objectives by assigning the ap- not be repaired. The machine could be re-
propriate costs placed by a new model 310 machine cost-

D. All of the above ing $545, 000 or by a new model 240
machine costing $450, 000. Management
953. Trading account is prepared to has decided to buy the model 240 machine.
It has less capacity than the model 310
machine, but its capacity is sufficient to
continue making product M08Y. Manage-
ment also considered, but rejected, the al-
ternative of dropping product M08Y and
not replacing the old machine. If that were
done, the $450, 000 invested in the new
machine could instead have been invested
in a project that would have returned a
total of $532, 000. In making the deci-
sion to buy the model 240 machine rather
than the model 310 machine, the differen-
tial cost was:
A. Calculate gross profit A. $95, 000
B. Calculate profit for the year B. $5, 000
C. Calculate all the incomes and ex- C. $77, 000
penses D. $18, 000
D. Calculate all the assets and liabilities 956. Under absorption costing, managerial de-
954. Jenny’s Corporation manufactured 25, cision is based on
000 grooming kits for horses during A. Profit
March. The fixed-overhead cost-allocation B. P/V ratio
rate is $20.00 per machine-hour. The
following fixed overhead data pertain to C. Contribution
March:Actual Static Budget Production 25, D. None of the above
000 units 24, 000 units Machine-hours 6,
100 hours 6, 000 hours Fixed overhead 957. Receipt and Payments Account usually in-
costs for March $123, 000 $120, 000 dicates
What is the fixed overhead spending vari- A. Surplus
ance? B. Capital Fund
A. $1, 000 unfavorable C. Debit Balance
B. 2, 000 favorable D. Credit Balance
C. $3, 000 unfavorable
958. Which of the following formula cannot be
D. $5, 000 favorable used for calculating the P/V ratio?
955. Dominik Corporation purchased a ma- A. (Sales value minus variable cost) /
chine 5 years ago for $527, 000 when Sales value
it launched product M08Y. Unfortunately, B. (Fixed cost plus profit)/Sales value

C. Change in profits/Change in sales 964. Which of the following is an example of

D. Profit/Sales value a liability?
A. Loan
959. For taking Decisions, is important
A. Data B. Building
B. Facts C. Sales
C. Information D. Accounts receivable
NARAYAN CHANGDER
D. All the Above
965. Which of the following are features of
960. The term financial statement covers management accounting?
A. P & L A/c A. Analysis of profit by cost centre
B. Balance sheet B. Statement of profit or loss using for-
C. P & L A/c and Balance sheet mat as dictated by accounting standards
D. None of the above and company law
C. Cash flow forecasts
961. Which is a sub-field of accounting?
D. Cost per unit calculations
966. During June, Buttrey Corporation in-

curred $67, 000 of direct labor costs and
$7, 000 of indirect labor costs. The journal
entry to record the accrual of these wages
would include a:
A. Management accounting
A. debit to Work in Process of $67, 000.
B. Cost accounting
B. credit to Work in Process of $74, 000.
C. Financial accounting
C. debit to Work in Process of $74, 000.
D. All of the above
D. credit to Work in Process of $67, 000.
962. Interest on loan paid by business is an
example of 967. What is the increase side of the owner’s
A. Revenue expense capital account?
B. Income A. Debit
C. Asset B. Credit
D. Return outward
968. What is NOT one of the factors that is
963. The flexibility of information provided by considered in sales forecasting?
management accounting is manifested in:
A. Industry trends
A. Information characteristics
B. Scope of explanatory report B. Technological developments
C. Explanation report template C. Price changes

D. All of the above cases are correct D. CEO’s input

969. What is the percentage of factory over- 974. Choose the correct option
head on direct wages?

A. 32% A. joint product
B. 20% B. by product
C. 25% 975. Determine contribution if sales are Rs. 1,
D. 10% 50, 000 and P/V ratio is 40%
A. Rs. 60, 000
970. Financial accounting provides information
for owners and investors B. Rs. 70, 000
A. True C. Rs. 80, 000
B. False D. None of the above
971. Face value of share is 976. Determine contribution if fixed cost is Rs.
50, 000 and loss is Rs. 20, 000
A. Issue price of share
A. Rs. 60, 000
B. Book value of share
B. Rs. 30, 000
C. Market value of share
C. Rs. 70, 000
D. Fixed denomination of a share men-
tioned in M/A
977. If Sales for the year were |.14, 00, 000
972. What is the formula of p/v Ratio and the Gross profit ratio is 20%, calcu-
A. contribution/sales late Gross profit?
B. fixed cost-contribution A. 11, 20, 000
C. sales-variables B. 2, 40, 000
D. none C. 2, 60, 000
D. 2, 80, 000
973. What is the roles of management accoun-
tant? 978. A firm has to pay a 20c per unit royalty
A. Provide information and accounting re- to the inventor of a device which it manu-
ports factures and sells. How would the royalty
charge be classified in the firm’s accounts?
B. Responsible for carrying out the task
of helping the management A. Selling expense
C. Assist departments in achieving the or- B. Direct expense

ganization objectives. C. Production overhead
D. All of above D. Administrative overhead

979. Whereas financial accounting reports B. Considering fixed costs irrelevant for
tend to cover the financial activities of a pricing decisions
company as a whole, managerial account- C. Maximizing sales volume and profit
ing reports tend to be specific to product
lines, divisions, sales territories, or cus- D. Aligning cost and demand conditions
tomers grouped by peso volume of sales
984. Which of the following is not a part of
orders.
Profit and loss Adjustment Account?
A. TRUE A. Depreciation on Machinery
NARAYAN CHANGDER
B. FALSE B. Amortization of goodwill
980. Abc co. using investment appraisal tech- C. Loss on sale of an asset
niques calculated IRR of its project to be D. Salaries paid
19.33% where as its WACC is 15%. De- Explanation:Salaries paid is an operating
pending on the information provided sug- expense. Whereas other three are non
gest whether to undertake project or not? cash and non operating expenses.
A. It must undertake project as its IRR is
985. Management accounting deals with what
greater than WACC
kind of information?
B. It must not undertake as its IRR is
A. Qualitative Information
greater than WACC
B. Quantitative Information
C. It must undertake as there is WACC is
too high. C. Both
D. It must not undertake as IRR is too D. None of the above
high
986. The significance of capital budgeting
981. What is the cost unit for electricity cost arises mainly due to the
used for machinery? A. Complicacies of Investment decisions
A. Kilowatt hours B. Irreversible in nature
B. Liters C. Large Investment
C. Tons D. All of the above
D. Square feet 987. Indirect expenses are called
982. Non-manufacturing cost are cost incurred A. unabsorbed costs
to produce the goods. It is sometimes B. prime cost
known as non-manufacturing overhead or
C. overheads
period cost.
D. factory expenses
A. True
B. False 988. Commission paid
A. Asset
983. What is the neoclassical theory of the
firm’s postulate for optimal pricing? B. Expense
A. Equating marginal product cost and C. Revenue

marginal revenue D. none of above

989. Which of the following is false regarding 995. Which TWO of the following statements
transfer pricing? about management accounting information
are true?

A. If no market price exists, the transfer
price may be based on cost A. They may include non-financial infor-
B. It measures exchanges between a mation
company and its external customers B. They are required by law to be pro-
C. If a market price exists, this price may duced
be used as transfer price between seg- C. They are used to aid planning
ments D. They are for use by parties external to
D. it measures the value of goods or ser- the organisation
vices furnished by one responsibility cen-
ter to another 996. Cost of goods manufactured will include
opening and closing stock for
990. Concept:The revenue from business ac- A. raw material and work in progress
tivities and the expenses associated with only
earning that revenue are recorded in the
same accounting period B. Work in progress only
A. adequate disclosure C. Raw material only
B. unit of measurement D. Raw material, work in progress and
finished goods
C. historical cost
D. matching expenses with revenue 997. Dividend paid, under AS-3, is
A. Cash flow from financing activity
991. These budgets are extended into the fu-
ture as time passes. B. Cash flow from operating activity
A. Rolling Budgets C. Cash flow from investing activity
B. Incremental Budgeting D. None of above.
C. Zero Based Budgeting 998. Which of the following is added while cal-
D. Activity Based Budgeting culating cash from operations?
A. Decrease in current assets
992. Costs are classified according elements,
nature, behaviour and function B. Refund of taxes
A. True C. Increase in Current Liabilities
B. False D. All of the above
993. Which cost is exclusive to this product? 999. Advantages of Accounting

A. overheads
B. direct material and direct labour
994. the future plan of all money transactions

for a specific time frame
A. cash flow statement A. Provide information about financial
B. cash flow projection performance

B. Accounting is precise C. To ascertain analyze and interpret the

C. Helps in settlement of tax liability results of business operations
D. Assistance to management D. To record all the business transactions
1000. The gross margin is added to the cost of 1005. Which of the following describes a situ-
sold goods to calculate ation in which an employee prefers to ex-
ert less effort than the effort the owner
A. revenues desires because the employee’s effort can-
NARAYAN CHANGDER
B. selling price not be accurately monitored and enforced?
C. unit price A. goal incongruence
D. bundle price B. moral hazard
1001. State whether each of the following is C. performance report variance
True or FalseIn a Common size statement D. incentive report variance
each item is expressed as a percentage of
some common base. 1006. Who utilize accounting information to
make lending decisions:
A. True
A. Investors
B. False
B. Customers
1002. Manufacturing costs are usually com-
C. Creditors
bined o form prime cost and conversion
cost. Which of these combination is for D. Employees
conversion cost.
1007. Formula for liquid ratio=
A. Direct material + Direct labor
A. Quick assets/Current liabilities
B. Direct material + Manufacturing over-
head B. Current assets/current liabilities
C. Direct labor + Manufacturing over- C. Current liabilities/current assets
head D. none of above
D. Direct labor + Administrative Expense
1008. When was the term Management Ac-
1003. The analysis of working capital to anal- counting coined?
yse the ability of firm to meet the short A. 1970
term needs of a company
B. 1950
A. Short term
C. 1940
B. Long term
D. 1931
C. external
D. internal 1009. Variable costs are costs that change in
direct proportion to the production unit.
1004. The main objective of management ac- All direct costs including direct materials,
counting is direct labour and direct expenses are vari-
A. To maintain the accounting records able costs.
B. To know the amount due from cus- A. True

tomers and suppliers B. False

1010. Financial accounting is concerned primar- B. Liquidity risk

ily with C. Market risk

A. External reporting to investors, credi- D. Financing risk
tors, and government authorities.
B. Planning and cost controls 1016. If the total cost of 1000 units is
Rs.60000 and that of 1001 units is
C. Profitability analysis Rs.60400, then the increase of Rs.400 in
D. Providing information for strategic the total cost is
and tactical decisions A. Prime cost
1011. Interest expense on loan from bank B. All variable overheads
A. Revenue Expenditure C. Marginal cost
B. Capital Expenditure D. None of the above
1012. Financial Year of Nini Business expires 1017. “The term used to describe the ac-
June 30, 2018.Select the correct title for counting methods, systems and techniques
this income statement. which, couple with special knowledge and
ability, assist management in its task of
A. Income Statement on July 1, 2017
maximising profit or minimising losses” is
B. The income statement ends June 30, defined by
2018
A. I.C.M.A
C. Income Statement for the year ended
B. J.Batty
July 1, 2017
C. Hawkins
D. Income Statement for the year ended
June 30, 2018 D. Kohler
1013. We record in the books of accounts. 1018. Cost units used in power sector is:
A. financial transactions A. Kilo meter (K.M)
B. no financial transactions B. Kilowatt-hour (kWh)
C. both financial and non financial trans- C. Number of electric points
actions D. Number of hours
D. none of these
1019. Working capital turnover ratio can be
1014. Which of the following are characteris- determined by
tics of B E P A. Gross profit/ Working capital
A. No loss and no profit B. Cost of goods sold / Net Sales
B. Total revenue is equal to total cost C. Cost of goods sold/ working capital
C. Contribution is equal to fixed cost D. None of the above
D. All the above 1020. Competitiveness can be best measured
1015. The financial risk affects an organiza- by
tion’s ability to obtain ongoing financing. A. Gross margin
A. Credit risk B. income margin

C. sales margin 1026. Users of accounting information are:

D. cost margin A. External users
B. External users and Internal users
1021. The amount of revenue required to earn
a targeted profit is equal to C. Subsidiary users
A. total fixed cost plus targeted profit di- D. Internal users
vided by contribution margin ratio
1027. Which of the following is not a period
NARAYAN CHANGDER
B. total fixed cost divided by contribution cost?
margin
A. General office salaries
C. targeted profit divided by the contribu-
B. Commissions
tion margin ratio
C. Overtime premium
D. targeted profit divided by the variable
cost ratio D. Advertising costs
1022. A board of directors (BoD) is an elected 1028. Which of the following is NOT capital
group of individuals that represent share- expenditure for a T-Shirt factory?
holders. A. Shop Rent
A. True B. Office Furniture
B. False C. Purchasing Land
1023. The debtor turnover ratio is calculated D. Purchasing Machinery

as:
1029. Income tax paid is
A. Total Credit Sales / Average Debtors A. current liability
B. Average Debtors / Total Credit Sales B. current asset
C. Total Debtors / Average Credit Sales C. an application of funds
D. Average Credit Sales / Total Debtors D. none of these
1024. Earnings per share (EPS) is a 1030. refers to the final section of a Profit
A. Profitability Ratio and loss account and shows how the net
profit after interest and tax is distributed,
B. Turnover Ratio i.e.dividends to shareholders and/or re-
C. Liquidity Ratio. tained profit kept by the business.
D. None of these A. A balance sheet
B. The appropriation account
1025. Identify the expense below that does
not have GST C. Cost of goods sold
A. Electricity D. Retained profit
B. Interest Expense 1031. What is the decrease side of Supplies?

C. Insurance A. Debit
D. Advertising B. Credit

1032. Which of the following statements is B. amount owing to creditors (Trade

true of variable overhead costs? Payables)

A. Variable overhead costs always have C. long term loan to employee
unused capacity.
D. property tax paid in advance
B. Variable overhead costs have no
production-volume variance. 1037. EMA is primarily concerned with finan-
C. Variable overhead costs have no cial management and does not consider en-
spending variance. vironmental aspects.
D. Variable overhead costs have no effi- A. TRUE

ciency variance. B. FALSE
1033. Gross profit is calculated in
1038. Prime Cost comprise of
A. balancesheet
A. direct material cost
B. profit and loss account
B. direct labour cost
C. trading account
C. overhead cost
D. ledger
D. non-manufacturing overhead cost
1034. Concept:Financial information is re-
ported for a specific period of time on 1039. The value chain is the sequence of busi-
financial statements. ness functions in which:
A. Matching Expenses with Revenue A. value is deducted from the products or
B. Accounting Period Cycle services of an organization.
C. Business Entity B. value is proportionately added to the

products or services of an organization.
D. none of above
C. products and services are evaluated
1035. What cost is this? with respect to their value to the supply
chain.
D. usefulness is added to the products or
services of an organization.
1040. Select all examples of liability accounts

A. accounts payable
B. accounts receivable
A. Stepped cost
C. loan payable
B. Fixed cost
C. Variable cost D. owner’s capital
D. Semi Variable cost 1041. Management accounting provides infor-

mation needed by management.
1036. Which is a liability of a business?
A. True
A. amount owing by debtors (Trade Re-
ceivables) B. False

1042. Bowden Corporation used the following A. YES

data to evaluate their current operating B. NO
system. The company sells items for $20
each and used a budgeted selling price of 1048. which of the following should not be
$20 per unit. Actual Budgeted Units sold recorded in the income and expenditure ac-
46, 000 units 45, 000 units Variable costs count?
$225, 400 $216, 000 Fixed costs $47,
A. Sales of old news papers
500 $50, 000 What is the static-budget
variance of revenues? B. Loss on sale of asset
NARAYAN CHANGDER
A. $20, 000 favorable C. Honorarium paid to the secretary
B. $20, 000 unfavorable D. Sale proceeds of furniture
C. $2, 000 favorable
1049. Break-even point is
D. $2, 000 unfavorable
A. where all costs equal all revenues
1043. The P&L account shows the historical B. where fixed costs equal revenues
performance of a business. There is
no guarantee that future performance is C. where variable costs equal revenues
linked to past performance or success. D. when costs excced revenues
A. LIMITATION OF P & L ACCOUNTS. 1050. Items of value owned by a business are
B. BENEFIT OF P&L ACCOUNTS. called:
1044. The starting point of the accounting pro- A. Assets
cess is B. Liabilities
A. communicating information to users. C. Owner’s equity
B. identifying economic events. D. Bonds
C. recording economic events.
1051. Fixed overhead costs include:
D. None of these answers are correct.
A. the cost of sales commissions
1045. selling an asset would be an example of
B. leasing of machinery used in a factory
A. cash inflow
C. energy costs
B. cash outflow
D. indirect materials
1046. Which 2 are characteristics of manage-
ment accounting? 1052. Which of the following statements is
correct?
A. It is based on future events
B. Its purpose is to provide information
for managers
C. It complies with accounting rules
A. 1
D. It is based on past events
B. 2
1047. Internal stakeholders can use final ac-
counts to manage the business and to aid C. 3
strategic decision-making. D. 4

1053. The financial statements of a business A. Sales of mint choc chip rose steadily
enterprise include: over the four months

A. Balance sheet B. Total sales fell in the month of July
B. Statement of Profit and loss C. In June, the gap between sales of
C. Cash flow statement strawberry and sales of chocolate re-
duced
D. All the above
D. Sales of blueberry rose in May and July
1054. The term management accounting was
1059. Castagnola Inc. has provided the fol-
first coined in
lowing data for the month of January.
A. 1940 There were no beginning inventories; con-
B. 1950 sequently, the direct materials, direct la-
bor, and manufacturing overhead applied
C. 1960
listed below are all for the current month.
D. 1970 (see the picture)Manufacturing overhead
for the month was overapplied by $1,
1055. Issue of bonus shares out of reserves
000. The company allocates any underap-
A. Increase working capital plied or overapplied manufacturing over-
B. Decrease working capital head among work in process, finished
goods, and cost of goods sold at the end
C. Does not affect working capital
of the month on the basis of the overhead
D. All of these. applied during the month in those accounts.
The journal entry to record the allocation
1056. Management Accounting helps in of any underapplied or overapplied manu-
A. only planning facturing overhead for January would in-
B. only decision making clude the following:
C. only controlling
D. planning, decision making and control-
ling
1057. Throughput = A. credit to Cost of Goods Sold of $760

A. Sales-VC B. debit to Cost of Goods Sold of $128,
180
B. Selling Price-Material Cost
C. credit to Cost of Goods Sold of $128,
C. Sales-Direct material cost 180
D. All of these D. debit to Cost of Goods Sold of $760
1058. Which of the following statements is 1060. The variable cost to make 1 unit of Prod-
true? uct A is Rs.20 and purchase price for 2
units is Rs.30/-. Should the product be
bought or made?
A. Make
B. Buy
C. Indifferent

D. none of above B. Financial Accouting
1061. Which of the following processes occurs C. Standard Cost Accounting

at the business planning stage? D. Responsibility Accounting
A. Obtaining data about actual results
1067. Broadly speaking, cost accounting can
B. Taking corrective action be defined as a(n)
C. Comparing actual performance with A. external reporting system that is
budgets
NARAYAN CHANGDER
based on activity-based costs.
D. Establishing objectives B. system used for providing the govern-
1062. Personal Accounts are related to Individ- ment and creditors with information about
uals, Banks, Companies, etc. a company’s internal operations.
A. True C. internal reporting system that pro-
vides product costing and other informa-
B. False
tion used by managers in performing their
1063. The per unit Fixed Cost is functions.
A. constant D. internal reporting system needed by
manufacturers to be in compliance with
B. directly related to the output
Cost Accounting Standards Board pro-
C. inversely related to the output nouncements.
D. no relation with output
1068. Turnover ratio is also known as
1064. What is the main financial statement A. Activity ratios
that presents the financial health of an or-
ganization to its external stakeholders ret- B. Performance ratios
rospectively? C. Both A & B
A. Statement of Change in Equity D. None of the above
B. Income Statement
1069. What is the classification of “cash?”
C. Statement of Financial Position
A. Liability
D. Cash Flow Statement
B. Owner’s Equity
1065. Fixed deposit
C. Asset
A. Revenue
D. Revenue
B. Liability
C. Asset 1070. is the art and science of record-
ing, classifying, summarizing, and analyz-
D. none of above ing costs to help management make pru-
1066. It is a system of accounting that is im- dent business decisions.
plemented to an organization so that per- A. Financial accounting
formance is recorded, reported and evalu-
B. Cost accounting
ated by levels of responsibility within an
organization. C. Management accounting
A. Cost Accounting D. none of above

1071. Why is Trading Account made B. Competence, Transparancy, integrity,

A. To find total cash in business objectivity, resolution of ethical conflicts

B. To find the Net Profit C. Competence, confidentiality, integrity,
objectivity, resolution of ethical conflicts
C. To find the Gross profit
D. Incompetence, confidentiality, in-
D. To find the total asset and liabilities of
tegrity, objectivity, resolution of ethical
the business.
conflicts
1072. The number of (employ) in the com-
pany has trebled over the past decade. 1077. Data concerning Nelson Company’s ac-
tivity for the first six months of the
A. employer year appear below:Machine Hours Electri-
B. employment cal Cost January $4000 $3, 120 February
6, 000 4, 460March 4, 800 3, 500 April
C. employees
5, 800 5, 040May 3, 600 2, 900June
D. employs 4, 200 3, 200Required:Using the high-low
method of analysis, estimate the variable
1073. ZBB Starts with electrical cost per machine hour.
A. Historical Data
A. $0.65
B. Zero
B. $1
C. Last Years Data
C. $0.56
D. Current year data
D. $0.98
1074. Which disciplines are involved in pricing
decisions? 1078. Uncontrollable costs are the costs which
be influenced by the action of a specified
A. Accounting, economics, and marketing
member of an undertaking.
B. Management, marketing, and sales
A. can not
C. Finance, operations, and human re-
sources B. can
D. Research and development, produc- C. may or may not
tion, and logistics D. must
1075. Which of the following is NOT a revenue
1079. Which of the following statements
expenditure
is/are correct?
A. Cost of ink cartridges
B. Purchase of paper
C. Cost of printer mainainance
D. Purchase of printer
A. i, ii and iii
1076. What is 5 asprects of IMA code ethics
B. i and iii
for management accountant?
C. ii and iii
A. Competence, confidentiality, integrity,
subjectivity, resolution of ethical conflicts D. iii only

1080. Define Management Information Sys- A. Semi-variable cost

tem (MIS) B. Step cost
A. *Identifying the system that is needed C. variable cost
for effective conclusion in organizations
D. fixed cost
B. *Identifying the management that is
needed for efficient decision making in or- 1085. If TPAR > 1, then product is
ganizations A. Loss making
NARAYAN CHANGDER
C. Identifying the information that is B. Profitable
needed for effective decision making in or-
C. Break even
ganizations
D. None of these
D. *Identifying the information that is
needed for user acceptance in organiza- 1086. To whom does the shareholders dele-
tions gate responsibilities in running the busi-
ness as a whole?
1081. The theory of constraints (TOC) defines
throughput margin as: A. Management
B. Employees
A. operating income minus the direct ma-
terial costs of the goods sold C. Board of Directors
B. operating income minus the direct la- D. Accountants
bor costs of the goods sold
1087. Overall Profitability ratios are based on
C. revenues minus the direct material
A. Investments
costs of the goods sold
B. Sales
D. revenues minus the full costs of the
goods sold C. Both a and b
1088. How can EMA support decision-making
in an organization?
A. By preparing annual environmental re-
ports
A. Internal users B. By calculating greenhouse gas emis-
sions
B. External users
C. By focusing solely on legal compliance
1083. Which type of report is based on the ac- D. By providing insights into the financial
tual expenses from previous years? implications of environmental aspects
A. Performance report
1089. While preparing sales budget, which of
B. Account receivables aging report the following factors are considered
C. Budget report A. Non-operational factors
D. Cost management accounting report B. Environmental factors
1084. Costs that possess characteristics of C. Both a and b
both fixed and variable cost are called D. None of the above

1090. Chipata Corporation applies manufac- C. System Analyst

turing overhead to jobs on the basis of
D. Programmer
machine-hours. Chipata estimated 25,

000 machine-hours and $10, 000 of manu- 1095. Which of the following is NOT true with
facturing overhead cost for the year. Dur- regards to relevant costs and relevant rev-
ing the year, Chipata incurred 26, 200 enues?
machine-hours and $11, 300 of manufac-
turing overhead. What was Chipata’s A. They are sunk costs and historical rev-
underapplied or overapplied overhead for enues.
the year? B. They are expected costs and expected
A. $480 overapplied revenues.
B. $820 underapplied C. They occur in the future.
C. $1, 300 overapplied D. The differ among alternative courses
D. $1, 300 underapplied of action.
1091. Which one is not included in cost estima- 1096. Double entry in accounting means there
tion? must be entries for every transaction?
A. planning A. two
B. decision-making B. Three
C. changing C. six
D. control D. one
1092. A form used to accumulate the cost of
1097. Cash Flow Statement is also known as
producing products is called a(n)
A. Statement of Changes in Financial Po-
A. Job cost sheet
sition on Cash basis
B. material requisition
B. Statement accounting for variation in
C. purchase order cash
D. time sheet C. both a and b
1093. the use of management accounting is D. None of the above.
A. Optional
B. Compulsory
C. Legally obligatory
D. Compulsory to some and optional to
others
1094. In computer based system, who evalu- A. $1.67 per unit

ates the existing application system and
designs new data processing procedures? B. $1.83 per unit
A. Computer operator C. $2.75 per unit
B. EDP Manager D. $3.00 per unit

1099. Comparative statement show the 1104. If manufacturing overhead is underap-

changes in plied, then:
A. Percentages A. actual manufacturing overhead cost is
B. Absolute amounts less than estimated manufacturing over-
head cost.
C. Both (a) and (b)
B. the amount of manufacturing over-
D. Ratios head cost applied to Work in Process is
less than the actual manufacturing over-
NARAYAN CHANGDER
1100. What does the Amoroso-Robinson rule
suggest? head cost incurred.
A. Fixed costs are irrelevant for pricing C. the predetermined overhead rate is
decisions too high.
B. Variable costs are irrelevant for pric- D. the Manufacturing Overhead account
ing decisions will have a credit balance at the end of the
year.
C. Demand quantity is irrelevant for pric-
ing decisions 1105. Which of the following is NOT a source
D. Profitability is irrelevant for pricing de- of funding for a business?
cisions A. Borrowing funds
1101. The following would appear in which B. Selling stocks

section of the cash flow statement? cash C. Investors
payments for equipment D. Decreasing owner contributions
A. Operating
1106. Cash and Bank is an element of
B. Investing
A. Quick Assets
C. Financing
B. Non-Quick Assets
D. none of above
C. Quick Liabilities
1102. Management accounting information D. Non-Quick Liabilities
must:
A. Compliance with accounting standards 1107. The margin of safety can be calculated
using the formula
B. Consistent with general accounting
principles A. Total sales-Break-even sales
C. Consistent with general accounting B. Fixed cost-P/V ratio

policies C. P/V ratio-Profit
D. Flexible, timely and helpful D. Fixed cost-Contribution
1103. The owner withdraws business assets 1108. The goods will be shipped to you
for personal use. COD.What does COD stand for?
A. Assets (I) A. a large sea fish
B. Liabilities (D) B. cash on delivery
C. Equity (D) C. codfish
D. none of above D. none of above

1109. Which of the following is not a manage- A. Financial Accounting Systems

ment accounting tool? B. Management Accounting Systems

A. Cash flow statement C. Cost Accounting Systems
B. Fund flow statement D. none of above
C. Ratio analysis
1115. Fixed cost is a cost:
D. Process costing
A. Which changes in total in proportion to
1110. Subscription due but not received for the changes in output
current year is B. Which is partly fixed and partly vari-
A. A liability able in relation to output
B. An asset C. Which do not change in total during a
given period despise changes in output
C. An expense
D. Which remains same for each unit of
D. An item to be ignored
output
1111. What are variable expenses? 1116. Which of these is NOT one of the 3 main
A. expenses that are the same month to types of financial statements most busi-
month nesses have?
B. legal process of reducing debt A. Inflow Statement
C. cost that differ month to month B. Balance Sheet
(harder to estimate) C. Income Statement
D. small book for recording account activ- D. Cash Flow Statement
ity
1117. What is the scope of management ac-
1112. What is the method called to work out counting
a Semi-variable cost?
A. Cost accounting
A. Lo method
B. Budgeting
B. Hi Lo method
C. Forecasting
C. Mid method
D. All of the above
D. No go method
1118. Which of the following statement is
1113. In a common size Income statement, false?
what is the base for calculating the change
A. Before accepting an engagement, a
percentage of the items?
practitioner should notify the client of any
A. Net Sales reservations he has regarded anticipated
B. Total Income benefits
C. Total Expenses B. MAS serves only in the areas of ac-
counting and finance
D. Non Of the above
C. In the rendition of MAS, independence
1114. ensure that the assets and liabilities must be observed so as to maintain the
of a business are properly accounted for essential requisites of impartiality and ob-
provide information to stakeholders. jectivity

D. All provisions of the Code of Profes- C. Cost A is fixed, Cost B is variable, Cost
sional Ethics are applicable to the practice C is mixed.
of MAS, except those related to the ex- D. Cost A is variable, Cost B is mixed, Cost
pression of an opinion on financial state- C is fixed.
ments.
1124. Which ONE of the following is a charac-
1119. Example of Fixed Asset
teristic of financial accounting?
A. Land
A. Its purpose is to provide information
NARAYAN CHANGDER
B. Cash in Hand for managers
C. Credit Card B. It is based on future events
D. Creditor C. Its purpose is to provide information
for owners and investors
1120. Functions of management accounting in-
clude D. The timing and content of its reports is
A. Planning decided by managers
B. Controlling 1125. what is the percentage of selling over-

C. Decision-making head on factory cost?
D. Communicating
1121. A Debenture is a kind of instrument

A. Debit
B. Debt
C. Ownership A. 32%
D. Asset B. 20%
1122. A cash budget is used to determine: C. 12%

A. profit D. 10%
B. cash closing balance 1126. analysis is known as a dynamic anal-
C. the value of the business ysis
D. the debts of the business A. Horizontal
1123. The per-unit amount of three differ- B. Vertical

ent production costs for Jones, Inc., are C. Long Term
as follows:ProductionPRODUCTION COST D. External
A COST B COST C 20 000 $12.00
$15.00 $20.00 80 000 $12.00 $11.25 1127. Which of the following is an example of
$5.00What type of cost is each of these an environmental cost?
three costs?
A. Employee salaries
A. Cost A is mixed, Cost B is variable, Cost
B. Office supplies
C is mixed
B. Cost A is fixed, Cost B is mixed, Cost C C. Marketing expenses
is variable. D. Energy consumption

1128. The Product X can be sold after further B. FIFO

processing @ Rs.25 whereas it can be sold C. AVCO
without further processing @ Rs.20 per

unit. If the Further processing cost for 250 D. none of above
units is Rs. 1500, should Product X be fur- 1134. Which of the following is TRUE regard-
ther processed? ing unexpected expenses?
A. Yes A. They usually don’t affect your budget.
B. No B. They should be planned for.
C. Indifferent C. They usually don’t affect your ability to
D. none of above pay bills.
D. They should not be included in your
1129. Which of the following is a branch of ac- budget.
counting that focuses on current and future
trends for internal use? 1135. Liquidity ratios are expressed in
A. Forensic Accounting A. Pure ratio form
B. Cost Accounting B. Percentage
C. Management Accounting C. Rate or time
D. Financial Accounting D. None of the above
1130. Higher budgetary (allocate) for ed- 1136. Which of the following is true of depre-
ucation mean more teachers can be hired ciation cost?
and classes can be smaller A. Depreciation cost on equipment is ir-
A. allocating relevant in decision making because de-
preciation on equipment that has already
B. allocations been purchased is a past cost.
C. allocation B. Depreciation cost on equipment is rel-
D. allocated evant in decision making because depreci-
ation on equipment that has already been
1131. An increase in the variable cost purchased is an opportunity cost.
A. Decreases the break-even point C. Depreciation cost on equipment is ir-
B. Increase margin of safety relevant in decision making because there
is no cash transaction.
C. Improves the profit/volume ratio
D. Depreciation cost on equipment is ir-
D. All of the above relevant in decision making because de-
preciation on equipment that has already
1132. are both an historical record and a
been purchased is an opportunity cost.
future planning tool.
A. Financial Accounts 1137. State whether each of the following is
True or False:Statement of profit and loss
B. Management Accounts
account shows the operating performance
1133. Which method of inventory valuation is of an enterprise for a period of time.
prohibited under IAS2? A. False
A. LIFO B. True

1138. Which of the following statements activity-based costing system for this ac-
is/are correct?(i) Information for decision- tivity is
making should incorporate uncertainty in A. RM16.80
some way.(ii) The data used to prepare
financial accounts and management ac- B. RM28.80
counts are the same. C. RM52.80
A. (i) is true and (ii) is false D. RM72.00
B. (ii) is true and (i) is false
NARAYAN CHANGDER
1141. The cost of sales |.15440 and Fixed
C. Both are true assets |.5000, calculate Fixed assets
turnover ratio?
D. Both are false
A. 3.01 times
1139. Columbo Corporation has two produc- B. 3.57 times
tion departments, Forming and Finishing.
The company uses a job-order costing sys- C. 3.88 times
tem and computes a predetermined over- D. 3.08 times
head rate in each production department.
The Forming Department’s predetermined 1142. The following would appear in which
overhead rate is based on machine-hours section of the cash flow statement? Cash
and the Finishing Department’s predeter- payments for purchasing inventory
mined overhead rate is based on direct A. Operating
labor-hours. At the beginning of the cur-
B. Investing
rent year, the company had made the fol-
lowing estimates:(see the picture)If the C. Financing
company marks up its manufacturing costs D. none of above
by 40% then the selling price for Job A948
would be closest to:(Round your interme- 1143. “Accurate data on the amount and pur-
diate calculations to 2 decimal places.) pose of all energy, water and materials
used to support activities” IS THE MEAN-
ING OF
A. FINANCIAL INFORMATION
B. NON FINANCIAL INFORMATION
C. NON PHYSICAL INFORMATION
A. $6, 197.80 D. PHYSICAL INFORMATION
B. $1, 770.80 1144. IT and management accounting is con-
C. $4, 427.00 nected to each otherThis sentence true or
false
D. $6, 818.00
A. True
1140. Jeramin Bhd uses activity-based cost- B. False
ing to determine costs of its Product Y
and Product Z. The estimated total cost 1145. Management accounting in contrast to
is RM14, 400 and expected activity for financial accounting is internal accounting
Product Y and Product Z are 200 and 300 that helps managers to measure the re-
respectively. The activity rate under the sults of their decisions

A. true B. Per unit FC reduces when output in-

B. false creases.

C. Total VC does not change with output.
1146. A business has budgeted sales of its sin-
gle product of 38, 000 units. The selling D. Per unit VC reduces when output in-
price per unit is £57 and the variable costs creases.
of production are £45. The fixed costs of 1151. . Bravado ltd has two possible projects
the business are £360, 000. Calculate the but can only raise funds to finance one
margin of safety in Percentage of them. Investment appraisal techniques
A. 26.67% produced the following results:Project A
Project BPay back period 3.5 years 3
B. 20.52 %
years NPV $ 4, 50, 000 $ 2, 50, 000ARR
C. 21.05% 15% 16% Which project to choose?
D. 12% A. Project A because it has lesser pay-
back period and higher NPV
1147. Balance of Income and Expenditure A/c
shows B. Project B because it has lower NPV ac-
companied by lower pay back period
A. Cash in hand
C. Project B because it sounds more fea-
B. Capital Fund
sible
C. Excess of Income over Expenditure or D. None
vice-versa
D. Net Profit 1152. A variance is:
A. the gap between an actual result and
1148. Salary paid to factory store staff is part a benchmark amount
of:
B. the required number of inputs for one
A. Factory overheads standard output
B. Production Cost C. the difference between an actual re-
C. Direct Employee cost sult and a budgeted amount
D. Direct Material Cost D. the difference between a budgeted
amount and a standard amount
1149. Standard Costing is best suited for
which of the following industries? 1153. What is the amount of capital of the pro-
prietor if his assets are |85, 000 and lia-
A. It is appropriate for industries that
bilities are |21, 000
manufacture standard goods
A. |85, 000
B. It is appropriate for service-oriented
businesses B. |.1, 06, 000
C. It’s ideal for industries that make non- C. |.21, 000
standard goods D. |.64, 000
D. None of the above 1154. Funds Flow Statement is also known as
1150. Which of the following is true about the A. Statement of Funds Flow
behavior of fixed and variable costs? B. Statement of Sources and Application
A. Total FC changes with output. of Funds

C. Statement of Sources and Uses of 1160. What is the decrease side of Accounts
Funds Receivable Ocean State Communica-
D. All of the above tions.
A. Debit
1155. A cost which remains unchanged over a
range of output levels B. Credit
A. Fixed cost 1161. Premium on redemption of debenture is

B. Variable cost A. A cash inflow
NARAYAN CHANGDER
C. Semi-variable cost B. cash outflow
D. Stepped cost C. an income
1156. The following would appear in which D. an asset

section of the cash flow statement? Cash 1162. It is a method, which measures how
received from a business investor quickly (or slowly) a project will repay the
A. Operating initial capital investment.
B. Investing A. Capital Investment Appraisal
C. Financing B. Net Present Value
D. none of above C. Payback Method
1157. is it a Capital receipt or revenue receipts D. Average Rate of Return
1163. Which of these are the components of

prime cost?
A. Direct materials and indirect materials
A. Capital receipts
B. Direct wages and indirect wages
B. Revenue receipts
C. Direct materials and direct wages
1158. Management accounting assists the D. Indirect materials and indirect materi-
management als
A. In planning, direction and control
1164. is the language of Business which
B. Only in planning used to communicate financial information.
C. Only in direction A. Accounting
D. Only in control B. Marketing
1159. What is Favorable (F)? C. Profit
A. Revenue Increased, Spending In- D. Pricing
creased
1165. Sales Rs. 1, 20, 000, gross profit Rs.
B. Revenue Increased, Spending De- 30, 000 what is the gross profit ratio?
creased
A. 30%
C. Revenue Decreased, Spending In-
creased B. 25%
D. Revenue Decreased, Spending De- C. 40%

creased D. 20%

1166. Dividing costs of the department into ac- A. a decrease in the price of materials
tivity cost pools is known as: due to an oversupply of materials

A. Second-stage allocation B. an unexpected increase in the price of
B. First-stage allocation materials
C. No allocation stage C. less amount of material used during

production than planned for actual output
D. Full allocation
D. workers taking less time to produce
1167. What is the accounting equation? the products than was expected
A. Assets + Liabilities = Owner’s Equity 1172. Which one the Natures of Accounting?
B. b) Assets-Liabilities = Owner’s Equity A. Classifying, Measuring, Communicat-
C. c) Assets + Owner’s Equity = Liabili- ing, Controlling, Recording
ties B. Identifying, Classifying, Measuring,
D. d) Assets = Liabilities + Owner’s Eq- Controlling, Recording
uity C. Identifying, Measuring, Classifying,
1168. A cost at 27, 000 output is Rs 3, 00, Communicating, Recording
000 and at 30, 000 output is Rs 3, D. Identifying, Controlling, Measuring,
15, 000. What shall be overhead cost for Communicating, Recording
33, 000 units?
1173. is a difference between standard
A. Rs. 3, 66, 667 cost and actual cost.
B. Rs. 3, 46, 500 A. Cost Variance
C. Rs. 3, 30, 000 B. Favourable
D. Rs. 3, 15, 000 C. Adverse
1169. Return Inwards appearing in the Trial D. Neutral
Balance is deducted from
1174. 1 Which method of capital budgeting
A. Purchases called benefit cost ratio?
B. Sales A. Pay back period method
C. Direct expenses B. Net present value method
D. none of these C. Payout period method
1170. Which of the following would not be a D. Profitability Index method
period cost?
1175. The sales manager has prepared a man-
A. research and development power plan to ensure that sales quotas for
B. direct materials the forthcoming year are achieved. This is
C. advertising costs an example of what type of planning?
D. office supplies A. Strategic planning

B. Tactical planning
1171. Which of the following can be a reason
for a favorable price variance for direct C. Operational planning
materials? D. Corporate planning

1176. Marginal costing is also known as C. may be practiced only by anybody

A. Direct costing since it is not limited to CPAs
B. Variable costing D. is regulated by law, such that an in-

dividual must pass government licensure
C. Both a & b examination first before he could practice
D. None of the above the same
1177. What is the scope of management ac- 1182. paying the rent would be an example of
NARAYAN CHANGDER
counting? A. cash inflow
A. Cost accounting B. cash outflow
B. Budgeting 1183. Materials used in a factory that are not
C. Forecasting an integral part of the final product, such
as cleaning supplies, should be classified
D. All of the above
as:
Explanation:Management accounting
aims to perform correct budgeting, fore- A. direct materials.
casting and cost accounting based on the B. a period cost.
information source.
C. administrative expense.
1178. Vice president of finance D. manufacturing overhead.
A. Internal User 1184. data are presented in budget
B. External User A. Actual
1179. Which of the following transactions B. Estimated
would be considered to be capital receipts? C. Both
A. Additional capital introduced by the D. None
owner
1185. is prepared for single level of activ-
B. Interest on a bank savings account ity and single set of business conditions.
C. Sale of goods A. Fixed budget
D. Money received from a tenant for rent B. Flexible budget
1180. To meet decision-making needs, the pro- C. Both a and b
cess of gathering and analyzing informa- D. None of the above
tion about a company and its competitive
environment is known as 1186. Which of the following best describes
annuity factor?1. It is series of cash flows
A. business process reengineering of equal amount after equal intervals for
B. process elimination infinite period of time2. It is series of cash
flows of equal; amounts after equal inter-
C. business intelligence
vals for a limited period of time
D. planning
A. 1 only
1181. Management Cosulting B. 2 only
A. is limited to CPAs C. Both
B. is not limited to CPAs D. None

1187. Which savings account will earn you the 1191. BOT approach means:
most money?
A. Build, Operate and Transfer

A. One that compounds interest daily.
B. Buy, Operate and Transfer
B. One that compounds interest monthly.
C. Build, Operate and Trash
C. One that earns simple interest daily.
D. One that earns simple interest D. Build, Own and Trash
monthly.
1192. is an asset that is not physical in
1188. In the context of Funds Flow Analysis, nature.
the word “funds” is used to define A. Tangible Assets
A. Net Working capital
B. Intangible Assets
B. Total current assets-Total current lia-
bilities 1193. What type of cost is supervisor salary
C. Both a and b costs, where one supervisor is needed for
every ten employees added to the staff?
A. A fixed cost
1189. What is the main purpose of account-
ing? B. A variable cost
A. To conduct legal research C. A mixed cost
B. To market products and services D. A step cost
C. To manage human resources
1194. If a business increases the selling price
D. To identify, measure, record, and com- of a product by £1 what will be the impact
municate financial information on the breakeven point and the margin of
1190. The management accounting can be safety, assuming no change in the number
stated an extension ofA) Cost Account- of units produced?
ingB) Financial AccountingC) Responsibility A. The breakeven point will decrease and
Accounting the margin of safety will increase
B. The breakeven point will decrease and
the margin of safety will stay the same.
C. The margin of safety will stay the same
but the breakeven point will increase.
D. The margin of safety will decrease and
the breakeven point will decrease.
1195. Budgeting includes only the financial as-

pects of the plan and not any non finan-
A. Both A and B cial aspects such as the number of physical
B. Both A and C units manufactured
C. Both B and C A. True
D. A, B, C B. False

1196. Which of the following is a variable 1200. CAATTS is also known as

cost? A. Cost and account treatment
A. A cost that is $20, 000 when produc- B. Computer Assisted Audit tools Tech-
tion is 50, 000, and $20, 000 when produc- niques
tion is 70, 000.
C. Classification and Accounting tools
B. A cost that is $20, 000 when produc-
D. Cost and Auditing tools
tion is 50, 000, and $28, 000 when produc-
tion is 70, 000. 1201. Financial Accounting
NARAYAN CHANGDER
C. A cost that is $20, 000 when produc- A. Looks to the future
B. Records past events
tion is 70, 000.
C. Are prepared for the business as a
D. A cost that is $40, 000 when produc- whole
tion is 70, 000. D. Prepares financial statements annu-
ally
1197. Managers utilizes marginal costing for E. The reports are prepared at regular
A. Make or buy decision short intervals
B. Utilization of additional capacity 1202. A company’s senior and middle manage-
C. Acceptance of special orders ment use accounting information to:
D. All of the above A. make buy, sell or keep decisions re-
lated to shares.
1198. What is/are the importance(s) of cost
B. run the business
management?
C. determine a company’s profitability
and profit sharing
D. utilize accounting information to make
lending decisions
1203. A product may be passed from one sub-
unit to another subunit in the same organi-
A. To improve overall business profitabil- zation. The product is known as a(n):
ity.
A. interdepartmental product
B. To explore opportunity through cost
B. intermediate product
optimization.
C. subunit product
C. To analyze and improve internal and
external cost driver. D. transfer product
D. I think all answers are correct. 1204. A factory produces two types of articles
Y and Z. Article Y takes 8 hours to make
1199. Master budget in nature and Z takes 16 hours. In a month ( 25
A. General days * 8 hours) 600 units of X and 400
B. Comprehension units of Z are produced. Given budgeted
hours 8000 per month and men employed
C. Specific are 50. Determine Activity ratio, Capacity
D. Complex ratio and efficiency ratio.

A. 112%, 140%, 140% D. none of above

B. 140%, 112%, 140% 1208. The analytical approach and process

C. 140%, 140%, 112% may be summarized into three broad
D. None of the above stages-analysis, design, and implementa-
tion. The design stage consists of
1205. An activity-based overhead rate is com- A. planning and scheduling actions to
puted as achieve the desired results, as well as ad-
A. actual overhead divided by actual use vising and providing technical assistance
of cost drivers in implementation
B. actual overhead divided by estimate B. ascertaining the pertinent facts and
use of cost drivers circumstances, seeking and identifying ob-
C. estimated overhead divided by actual jectives, and defining the problem or op-
use of cost drivers portunity for improvement
D. estimate overhead divided by estimate C. evaluating and determining possible

use of cost drivers solutions and presenting findings and rec-
ommendations
1206. Doakes Corporation uses a job-order D. All of the above
costing system with a single plantwide
predetermined overhead rate based on di- 1209. Employees use accounting information
rect labor-hours. The company based its to
predetermined overhead rate for the cur- A. run the business
rent year on the following data:Total di-
rect labor-hours:60, 000Total fixed man- B. make lending decisions
ufacturing overhead cost:$378, 000Vari- C. determine a company’s profitability
able manufacturing overhead per direct and profit sharing
labor-hour:$2.20 Recently, Job M843 D. decide which products to buy from
was completed with the following charac- which companies
teristics:Number of units in the job:60Total
direct labor-hours:120Direct materi- 1210. Asset accounts increase with a
als:$630Direct labor cost:$2, 400The A. debit
unit product cost for Job M843 is closest
to:(Round your intermediate calculations B. credit
to 2 decimal places.) 1211. The term ‘Financial Statement’ covers
A. $33.75 A. Profit & Loss Statement
B. $67.50 B. Balance sheet and Cash account
C. $27.50 C. Profit & Loss Statement and Balance
D. $50.50 sheet
1207. Which is not a scope of management ac- D. All of above are false
counting 1212. The cost which remain constant up to a
A. Cost Accounting certain level of activity is known as
B. Recording Financial Transection A. Semi variable cost
C. Budgetary Control B. Variable cost

C. Marginal cost its capacity is sufficient to continue mak-

D. Fixed cost ing product I43L. Management also consid-
ered, but rejected, the alternative of sim-
1213. Financial accounting ply dropping product I43L. If that were
A. Focuses on the future and includes ac- done, instead of investing $340, 000 in
tivities such as preparing next year’s op- the new machine, the money could be in-
erating budget. vested in a project that would return a to-
tal of $411, 000. In making the decision
B. Must comply with PFRS (Philippine Fi- to invest in the model 220 machine, the
NARAYAN CHANGDER
nancial Reporting Standards). opportunity cost was:
C. Reports include detailed information
A. $348, 000
of the various segments of the business
such as product lines or departments. B. $340, 000
D. Is prepared for the use of department C. $360, 000
heads and other employees. D. $411, 000
1214. Money you receive for letting someone 1217. Which one of the above graphs illus-
use your money; money you pay for using trates the costs described in the ques-
someone else’s money tion?A linear variable cost-when the ver-
A. credit tical axis represents cost per unit
B. interest
C. finance charge
D. budget
1215. Manufacturing overhead includes:
A. all direct material, direct labor and ad-
ministrative costs. A. Graph 1
B. all manufacturing costs except direct B. Graph 2
labor.
C. Graph 3
C. all manufacturing costs except direct
labor and direct materials. D. Graph 6
D. all selling and administrative costs. 1218. Bills payable is shown as
1216. Management of Plascencia Corporation A. Long-term borrowings
is considering whether to purchase a new B. Short-term borrowings
model 370 machine costing $360, 000 or
C. Other current liabilities
a new model 220 machine costing $340,
000 to replace a machine that was pur- D. Trade payables
chased 7 years ago for $348, 000. The old
machine was used to make product I43L 1219. Sunk costs are:
until it broke down last week. Unfortu- A. relevant for decision making
nately, the old machine cannot be repaired. B. Not relevant for decision making
Management has decided to buy the new
model 220 machine. It has less capac- C. cost to be incurred in future
ity than the new model 370 machine, but D. A. future costs

1220. With the same data as previous ques- B. 25%

tion, what is the margin of safety in per-
C. 50%
centage?

A. 4%
B. 40% 1226. EVA in SMA refers to?
C. 400% A. Economic vulnerability added
D. 0.4% B. Economic value added
1221. The cost of Insurance and Taxes are in- C. Economic Value Addition
cluded in D. Economic Value Analysis
A. Cost of ordering
1227. Taking the time to set goals wastes your
B. Set up cost
limited time.
C. Inventory Carrying cost
A. True
D. Cost of shortage
B. False
1222. Launch target Presentation of BPP per
generating machine 1228. Which of the following items are not in-
cluded in a cash budget?
A. July 01, 2022
B. July 31, 2022 A. Gain on sale of asset
C. 30 Sept 2022 B. Cash sales

D. 15 Sept 2022 C. Payment received from debtors
D. Interest received from the bank
1223. The total contribution margin is the
A. difference between sales and total 1229. Which of the following is false
cost
A. MCV = MPV + MUV
B. difference between sales and total
variable cost B. MCV = (SQ x SP)-(AQ X AP)
C. amount by which sales exceed total C. MPV = SQ (SP-AP)

fixed cost D. MUV = SP (SQ-AQ)
D. difference between sales and operat-
ing income 1230. Budgeting is used to help companies:
A. plan to better satisfy customers
1224. contingent liablities will be recorded in
B. anticipate potential problems
A. balancesheet asset
C. focus on opportunities
B. trading account
C. balancesheet liablities D. All of these answers are correct
D. profit and loss account 1231. Management of a business enterprise is

the major external user of information.
1225. Determine P/V ratio if sales is Rs. 80,
000 and Variable cost is Rs. 60, 000 A. True
A. 40% B. False

1232. Cost driver can be established using the A. the plant was operated at less than
below except normal capacity.
A. A cost driver rate is the rate of over- B. manufacturing overhead costs in-
heads expressed in terms of units of activ- curred were less than estimated manu-
ities that will be charged to the products facturing overhead costs.
and services. C. manufacturing overhead costs in-
B. A cost driver is any activity that causes curred were less than manufacturing
a cost to be incurred overhead costs charged to production.
NARAYAN CHANGDER
C. This method is used only if the com- D. manufacturing overhead costs in-
pany produces a single product. curred were greater than manufacturing
D. Cost driver or activity driver is the unit overhead costs charged to production.
of an activity that causes the change of an 1237. Choose the correct option
activity cost.
1233. Which of the following is true about the

behavior of fixed and variable costs?
A. Total FC changes with output
B. Per unit FC reduces when output in-
creases.
A. Graph A
C. Total VC does not change with output
B. Graph B
D. Per unit VC reduces when output in-
creases C. Graph C
D. Graph D
1234. Profit on sales is measured as
A. Sales * P/V ratio-Fixed cost 1238. Working Capital is the
B. Sales * P/V ratio + Fixed cost A. Capital borrowed from the Banks.
C. Sales + P/V ratio + Fixed cost B. Difference between Current Assets
and Current Liabilities.
C. Difference between Current Assets
1235. The Institute of Management Accoun- and Fixed Assets.
tants’ Code of Ethics
D. Cash and Bank Balance.
A. is a legally enforceable contract with
all management accountants. 1239. Transactions and events that cannot be
measured in money terms are not recorded
B. should be viewed as a goal for profes- in the books of accounts. It is due to
sional behavior. Money Measurement Concept.
C. is a legally enforceable contract with A. True
all CPAs.
B. False
D. provides ways to measure departures
from ethical behavior. 1240. How to determine the flexible budget?
1236. Overapplied manufacturing overhead A. Budgeted Quantity x Budgeted Price

would result if: B. Actual Quantity x Budgeted Price

C. Actual Quantity x Actual Price 1246. P & L statement is also known as

D. Budgeted Quantity x Actual Price A. Statement of operations

B. Statement of earnings
1241. What is considered the language of busi-
ness used to communicate financial infor- C. Statement of income
mation? D. None of the above
A. Marketing 1247. Solvency ratio indicate
B. Profit A. Profitability
C. Pricing B. Activity
D. Accounting C. Credit worthyness
D. None of these
1242. Do we need to borrow in the near fu-
ture? 1248. Management accountancy is a structure
A. Creditor for
A. Costing
B. Manager
B. Accounting
C. Supplier
C. Decision making
D. Investor
D. Management
1243. Which one is ideal for cost control pur-
1249. What is the main focus of Financial Ac-
pose
counting?
A. Normal cost
A. Analyzing and evaluating financial
B. Standard cost statements
C. Average cost B. Recording and reporting financial
transactions
D. Continuous costing
C. Managing everyday transactions
1244. On the basis of period, budgets may be D. Forecasting future trends
classified into groups.
1250. Which of the following is NOT a good
A. Five
way to track your spending?
B. Four
A. In your head
C. Three B. Notebook and pencil
D. Two C. Envelope method
1245. Which of the following types of costs is D. Online software or app
a product cost for absorption costing but a 1251. The rule ‘Debit what comes in Credit
period cost for variable costing? what goes out’ is applicable to:-
A. direct materials A. Personal Account
B. direct labor B. Real Account
C. fixed factory overhead per unit sold C. Nominal Account
D. variable selling expense D. Liability Account

1252. Bank overdraft D. Profitability

A. Revenue 1258. Which of the following is not shown as
B. Asset non-current liabilities
C. Liability A. Trade payables
D. none of above B. Long-term borrowings
1253. Financial accounting provides the PRI- C. Deferred tax liabilities
MARY source of information for:
NARAYAN CHANGDER
D. Long-term provisions
A. decision making in the finishing depart-
1259. Working capital increases if current lia-
ment
bilities increase.
B. preparing the income statement for
A. True
shareholders
C. improving customer service B. False
D. planning next year’s operating budget 1260. Carradine Corporation uses a job-order
costing system with a single plantwide
1254. Contribution margin ratio can be calcu- predetermined overhead rate based on
lated in all of the following ways except machine-hours. The company based its
A. fixed costs / Contribution margin per predetermined overhead rate for the cur-
unit. rent year on total fixed manufacturing
B. 1-Variable cost ratio. overhead cost of $105, 000, variable man-
ufacturing overhead of $3.00 per machine-
C. contribution margin per unit / price. hour, and 70, 000 machine-hours. The
D. total contribution margin / Total sales. company recently completed Job P233
which required 60 machine-hours. The
1255. Cost of goods sold can be derived amount of overhead applied to Job P233
from manufacturing cost as follow:Cost of is closest to:(Round your intermediate cal-
goods sold = Opening inventory of finished culations to 2 decimal places.)
goods + Manufacturing cost-Closing inven-
tory of finished goods A. $90
A. True B. $270
B. False C. $450
D. $180
1256. Under-absorption is:Debited to Profit
and Loss AccountsCredited to Overhead 1261. The company purchases supplies on
Control Accounts credit
A. True A. Assets (I)
B. False B. Liabilities (NE)
1257. The balance sheet is at the heart of C. Equity (I)
which type of bookkeeping? D. none of above
A. Double-entry
1262. Financial accounting only provides infor-
B. Cash mation about what may happen in the fu-
C. Taxation ture

A. True 1267. Includes the collection, determination,

allocation, assessment, interpretation,
B. False
and control of cost data, particularly the

1263. Data are presented in budget cost of production in a manufacturing con-
cern
A. Present
A. Tax Accounting
B. past B. Cost Accounting
C. Future C. Accounting Education
D. All the above D. Financial Accounting
1264. Management accounting is an activity 1268. If Current Assets are Rs. 5, 00, 000
or process that produces information in fi- and Current Liabilities are Rs. 2, 00, 000
nancial form for management to make eco- ; Working capital is
nomic decisions in carrying out manage- A. Rs. 7, 00, 000
ment functions, is the Definition of Man-
agement Accounting according to? B. Rs. 5, 00, 000
A. Mulyana C. Rs. 2, 00, 000

D. Rs. 3, 00, 000
B. Halim and Supomo
C. Mulyadi 1269. Sales for desired profit is measured as
D. Charles T Homgren A. (Fixed cost + Desired Profit) / P/V Ra-
tio
1265. Which of the following statements is B. (Fixed cost + Desired Profit) * P/V Ra-
true? tio
A. Management accounting information C. (Fixed cost-Profit) / P/V Ratio
focuses on external reporting
B. The Statement of Financial Position,
Statement of Financial Performance and 1270. Which of the following is a method used
Statement of Cash Flows are used for Fi- in analyzing financial statements-
nancial Accounting but not for Manage- A. Variance analysis
ment accounting
B. Trend analysis
C. Management accounting is broader in C. Break-even analysis
scope than Financial accounting.
D. Budget analysis
D. None of the given choices
1271. Which of the following is NOT one of the
1266. Describe the cost unit applicable to the questions management accountants might
Bicycle industry attempt to help answer in the formulation
A. per part of bicycle of strategy?
A. Who are our most important cus-
B. per bicycle
tomers?
C. per ton
B. Will adequate cash be available to im-
D. per day plement the strategy?

C. What substitute products exist in the C. 31000

marketplace?
D. 26000
D. Does the strategy comply with GAAP
(Generally Accepted Accounting Princi- 1276. Cash flow statement is based on accrual
ples)? basis of accounting
1272. Identify the transaction that matches A. True

the general journal entry shown. B. False
NARAYAN CHANGDER
1277. Formula for Fixed assets turnover ra-
tio?
A. Purchased equipment $1100 incl. GST A. Cost of sales/Fixed assets
B. Purchased supplies $1100 incl. GST on B. Sales/Fixed assets

credit C. Credit sales/Average receivable
C. Purchased supplies $1100 incl. GST D. Both a and b
cash
D. Purchased supplies $1000 incl. GST 1278. If sales is Rs 10, 00, 000, sales returns
cash is Rs 50, 000, Profit Before Tax is Rs 2,
00, 000, Income tax is 40%, Net profit
1273. Objectives will vary depending on ratio is
whether the organization is profit-seeking,
A. 12.63%
like general motors, or non-profit and
service-oriented, like the city government. B. 20%
A. TRUE C. 10%
B. FALSE D. 50%
1274. If you have $30.00 in your checking ac- 1279. Below is the characteristics of manage-
count, and you spend money from your ac- ment accounting, EXCEPT
count to buy some food (it cost $6.32),
would you credit or debit the amount in A. Emphasis on precision
your transaction log? For how much? B. Future emphasis
A. credit for $23.68 C. Focuses on segments of an organiza-
B. debit for $23.68 tion
C. credit for $6.32 D. Emphasis on relevance for planning
D. debit for $6.32 and control
1275. If Direct Material Consumed is 1280. Accounts Payable is also known as

Rs20000, Chargeable Expenses is A. Debtors
Rs3000, Direct Labour is Rs 2000 and
Indirect Labour is Rs 6000, Then Prime B. Creditors
cost will be C. People you are going to get money
A. 23000 from
B. 25000 D. Accounts Paid

1281. One of the reasons why we need to be 1287. A segment could be which of the follow-
careful in determining the selling price, ex- ing?
cept:

A. Product
A. Future generating competition
B. Customer type
B. Prices have been determined in the
RKAP C. Geographic region
C. Subholding action D. All of these
D. The need for real time financial infor-
1288. What will be the Gross Profit if, total
mation
sales is Rs 2, 60, 000, cost of net goods
1282. Managerial accounting is the branch of sold is Rs 2, 00, 000 and sales return is
accounting concerned with reporting to in- Rs 10, 000?
ternal parties for decision making pur- A. 13%
poses.
B. 28%
A. TRUE
B. FALSE C. 26%
D. 20%
1283. A manager that deals with the part
of the business where profit is compared
1289. book keeping is mainly concerned with
with the amount of money invested in the
the recording of financial data relating to
department
the in significant and orderly manner
A. Cost centre
A. business
B. Profit centre
B. personal
C. Revenue center
D. Investment centre C. company
D. monetary
1284. Common size analysis is also known as
analysis 1290. How is revenue calculated?
A. Vertical Analysis
B. Horizontal Analysis
1285. Costing includes management account-
ing; bookkeeping includes financial ac-
counting
A. True
B. False
1286. Qualitative characteristics of accounting
information are
A. Output / Selling price
A. Relevance
B. Reliability B. Output + Selling price
C. Comparability C. Output x Selling price
D. All of theses D. Output-Selling price

1291. A mixed cost A. True

A. is fixed over a wider range of activity B. False
than a step cost.
1296. The following expense is an example of
B. is a fixed cost over the relevant range a variable cost
and a variable cost everywhere else.
A. Rent
C. contains both fixed and variable com-
ponents. B. Materials
NARAYAN CHANGDER
D. always increases on a per unit basis. C. Depreciation
D. none of above
1292. Which of the following cannot be a rea-
son of unfavorable direct materials price 1297. Determine P/V ratio if sales per unit is
variance? Rs. 10 and variable cost per unit is Rs.7
A. Excellent employee training program A. 25%
B. Inefficient standard setting B. 50%
C. Ineffective purchasing agent C. 45%
D. Sudden rise price of materials D. 30%
1293. The Matching Concept states that rev- 1298. The statements below is the resolution
enue should only be recognised when it of ethical conflict based on IMA code ethic
is earned and not received. If a company of management accountants, EXCEPT
sells goods on credit in March and receives
payment in May, this would be shown in A. Follow established policies
the sales figure for? B. Clarify issues in a confidental discus-
A. The month the goods were sold. sion with an objective advisor
B. The month the goods were produced. C. Consult a Doctor to legal obligations
C. The month the cash is creceived from D. The last resort is to resign
the customer.
1299. A report that measures financial and
D. None of the above. nonfinancial performance measures for
various organization units in a single re-
1294. Creditors or suppliers are interested to port is called a(n):
know the
A. balanced scorecard
A. Profitability of the firm in relation to
turnover B. financial report scorecard
B. Profitability of the firm in relation to in- C. goal-congruence report
vestors D. investment success report
C. Short-term solvency/liquidation of the
1300. Strategic Decisions are taken by
concern
D. Effective utilisation of its (firm’s) re- A. Top Level Management
sources B. Middle Level Management
1295. Contingent Liability is shown on the lia- C. Lower Level Management

bility side of the Balancesheet D. All the Above

1301. Financial Budget, namely 1305. If the gross margin is $2000 and the
revenue is $5000, then the cost of goods
A. Cash Budget and Capital Budget
sold would be

B. Budget Balance Sheet A. $8, 000
C. Budget Statement of Cah Inflow B. $3, 000
D. Budget Statement of Cash Flow C. $2, 000
D. $4, 000
1302. Which of the following is definition of
accounting? 1306. What is the main purpose of the State-
A. It’s a process of classifying, recording, ment of Financial Position (SOFP)?
and summarizing the business transaction A. All of the above
in monetary unit, interpretating the data B. To assess liquidity and capital em-
in assist stakeholders in making decision. ployed
B. It’s a process of recording, classifying, C. To show how the business is financed
and summarizing the business transaction and how funds are deployed
in monetary unit, interpretating the data
in assist stakeholders in making decision. D. To provide a basis for assessing the
value of the business
C. It’s a process of classifying, recording,
and summarizing the business transaction 1307. The rental expenses for a factory oper-
interpreting the data in assist stakehold- ating at 50% capacity is Rs. 1, 00, 000,
ers in making decision. what shall be the rent if it operates at
75% capacity
D. none of above
A. Rs. 75, 000
1303. Which of the following is an example of B. Rs. 1, 00, 000
an asset? C. Rs. 1, 50, 000
D. Rs. 50, 000
1308. ABC Ltd has quoted that its total cost for
producing 30000 units is Rs. 4, 50, 000
and the total cost for producing 20, 000
units is Rs. 3, 50, 000. The fixed cost for
A. Vehicle
ABC Ltd is
B. Electricity A. 1, 00, 000
C. Mortgage B. 1, 50, 000
D. none of above C. 10, 000
D. 10
1304. Standard costs are determined on
A. Zero base 1309. The break even point occurs when the
Total Revenue is equal to the Marginal
B. The basis of trade cycle Cost
C. Scientific basis A. True
D. None of these B. False

1310. Indirect costs are 1315. Which of the following items is not in-
A. Costs that do not change with output cluded in cost accounts
A. Interest received on Bank deposits
B. Costs directly involved with making the
product B. Divided paid on share capital
C. Costs that are essential but not di- C. Damage playable at law
rectly related to manufacturing D. All of these
D. money spent on a regular basis
NARAYAN CHANGDER
1316. What will happen to your credit score if
you do not manage your debt wisely?
1311. What document is a summary of the
money a company brought in (revenue) A. You won’t be able to track your credit
and what it paid out (expenses)? score
A. Income Statement B. Your credit score will go up
B. Tax Statement C. Your credit score will go down
C. Revenue Statement D. It will not affect your credit score
D. Profit Statement 1317. If Fixed cost is zero, operating leverage

A. 1
1312. Which statement is prepared in the pro-
cess of funds flow analysis? B. -1
C. 0
A. Schedule of changes in working capital
D. none of these
B. Funds Flow Statement
C. Both a and b 1318. The conceot of timeliness of data avail-
ability is most relevant to
A. manual systems
1313. Government statistics can be a useful B. payroll systems
source of data and information. Which of
C. online systems
the following types of data is most likely
to be obtained from government statis- D. inventory systems
tics? 1319. A reflects the company’s position
A. Foreign exchange rates by showing what the company owes and
B. Population data what it owns.
A. Income Statement
C. Details of industry costs
B. Cash flow forecast
D. Interest rates
C. Balance Sheet
1314. Refrain the activity that could discredit D. P/L Account
the profession is the characteristics of
Based on IMA code of ethics. 1320. SMA(Strategic Managment accounting)
refers to:
A. Integrity
A. Providing information to support
B. Objectivity
strategic plans and decisions
C. Confidentiality B. Providing information to support ac-
D. Competence counting and digital transformation

C. Providing strategic Databases for C. The ecoefficiency of environmental

Managers management accounting to a business
refers to the competitive disadvantage.

D. Strategic information from Operations
to General Managers D. The ecoefficiency of environmental
management accounting to a business
1321. Calculate the correct values for Electric-
refers to the effectiveness of using envi-
ity and Bank.
ronmental management accounting to im-
prove a company’s image
1325. Toy Co manufactures and sells toys.

Which TWO of these costs are classified
A. Electricity $2000 and Bank $2200
as distribution costs?
B. Electricity $2200 and Bank $2400
A. Rental of the finished goods ware-
C. Electricity $20 and Bank $220 house
D. Electricity $2200 and Bank $2000
B. Depreciation of its own fleet of deliv-
1322. Which of the following is a key compo- ery vehicles
nent of EMA? C. Costs associated with a marketing
A. Setting environmental objectives campaign
B. Integrating environmental data with fi- D. Commision paid to sales staff
nancial data
1326. What is the main function of Manage-
C. Calculating greenhouse gas emissions
ment Accounting?
D. Conducting environmental impact as-
sessments A. Decision Making
B. Planning
1323. Revenue Expenditure is money spent on
items in the day to day running of a busi- C. Direction
ness; (E.g Raw materials) D. Provision of Information to manage-
A. True ment
B. False
1327. Canteen expenses for factory workers
1324. ECOEFFICIENCY OF ENVIRONMENTAL are part of:
MANAGEMENT ACCOUNTING TO A BUSI-
A. Factory overhead
NESS EXCEPT
B. Administration Cost
A. The ecoefficiency of environmental
management accounting to a business C. Marketing cost
refers to the decrease cost of implement-
ing environmental management account-
ing 1328. The Board of Directors (BoD) remains in
B. The ecoefficiency of environmental effective control of the affairs of the com-
management accounting to a business pany at all times
refers to the impact on employee satisfac-
A. True
tion lead to employees greater productiv-
ity. B. False

1329. To reduce the excessive focus of subunit 1333. Management deals with
managers on their own subunits, many A. Quantitative
companies compensate subunit managers
on the basis of: B. Qualitative
A. both the operating income earned by C. Both
their respective subunits and the company D. none of above
as a whole
1334. A variance is:
B. both the investing income earned by
NARAYAN CHANGDER
their respective subunits and the company A. the difference between actual fixed
as a whole cost per unit and standard variable cost
per unit
C. only the investing income earned by
their respective subunits B. the standard units of inputs for one
output
D. both the net income and earned by
their respective subunits and the company C. the difference between an actual re-
as a whole sult and a budgeted performance
D. the difference between actual variable
1330. Which of the following statements are
cost per unit and standard fixed cost per
true about budget, budgeting & budgetary
unit
control?
A. Budgetary control is a wider concept 1335. Will the company be able to pay its
whereas Budget and budgeting are nar- short-term debts?
rower concepts A. Customers
B. If there is budgeting or budget, it is not B. Finance
necessary that there should be budgetary
C. Creditors
control also
C. If there is budgetary control, budget- D. Marketing
ing and budget are must 1336. return inwards means
D. All of the above A. purchase return
1331. This will depend upon factors like cost B. sales return
of current and fixed assets, promotional C. proportionate sales
expenses and long-range planning.
D. expected sales
A. Determining capital structure
B. Determining capital requirements 1337. arrangement of assets and liabilities in
the balancesheet is known as
C. Framing financial policies
A. final accounts
D. Cash Flow Analysis
B. accounting
1332. For reaching final decision, management
C. marshalling of balancesheet
has to apply its Except:
D. posting of entries
A. Skill
B. Common sense 1338. Marketing department
C. Past experience A. Internal Users
D. Future data B. External Users

1339. The direct materials efficiency variance 1344. Users of accounting information include
is computed as A. Creditors

A. (SP X AQ)-(AP X SQ).
B. Lenders
B. (AP X AQ)-(SP X SQ).
C. Customers
C. (SP X AQ)-(SP X SQ).
D. All of the above
D. (AP X SP)-(AQ X SQ)
1345. Asset accounts decrease with a
1340. Tenzin Ltd. Which is Finance Based
Ecommerce Company has a current ratio of A. debit
3.5:1 and quick ratio of 2:1. If excess B. credit
of current assets over quick assets rep-
resented by inventories is Rs. 24, 000, 1346. A manager can be blamed for ad-
What will be the value of current assets? verse variance.
A. 66000 A. controllable
B. 55500 B. non controllable
C. 56000 C. improvement in quality
D. 55000 D. reduction in cost
1341. Legacy is a 1347. Calculate cost of sales from the follow-
A. Revenue expenditure ing:Net Works cost:Rs. 2, 00, 000 Office
B. Capital receipt & Administration Overheads:Rs. 1, 00,
000 Opening stock of WIP:Rs. 10, 000
C. Capital expenditure Closing Stock of WIP:Rs. 20, 000 Closing
D. Revenue receipt stock of finished goods:Rs. 30, 000 There
was no opening stock of finished goods.
1342. Which of the following is accurate for- Selling overheads:Rs. 10, 000
mula for Conversion Cost?
A. Rs. 2, 70, 000
A. Direct Material Cost+Direct Labour
Cost B. Rs. 2, 80, 000
B. Direct Labour Cost+Manufacturing C. Rs. 3, 00, 000
Overhead Cost D. Rs. 3, 20, 000
C. Direct Material Cost+Direct Labour
Cost+Manufacturing Overhead Costs 1348. Financial Accounting is based on Com-
pany’s Acts and standards issued by the
D. Direct Material Cost+Direct accounting profession, meanwhile Man-
labour Cost+Manufacturing Overhead agement Accounting is not based on gov-
Cost+Non Manufacturing Overhead Cost erned by legislation or standards. Is the
1343. The following is the objective of cost ac- difference between Financial Accounting
counting except and Management Accounting in terms of?
A. Ascertainment of cost A. Time Focus
B. Planning and controlling cost B. Format of Accounting Government by
C. Decision making C. Frequency
D. Observations D. Primary Users

1349. What is the classification of the owner’s B. A current liability

drawing account? C. An application of funds
A. Revenue D. All of these
B. Expense
1355. Which branch of accounting is concerned
C. Owner’s Equity with analyzing costs of products or ser-
D. Liability vices rendered in a business?
A. Auditing
NARAYAN CHANGDER
1350. Which one of the following tangible
fixed assets would not normally be depre- B. Cost accounting
ciated? C. Financial Accounting
A. Buildings D. Management Accounting
B. Machinery E. Tax Accounting
C. Land
1356. Income and expenditure account is pre-
D. Equipment pared to find out
1351. A company has sales of $73, 000 and A. Profit or loss
Average accounts receivables of $11, 000. B. Cash and bank balance
What is its debtors turnover ratio? C. Surplus or deficit
A. 0.2 times D. Financial position
B. 2 times
1357. Planning is a function that involves
C. 6.636 times
A. Hiring the right people for a particular
D. 10 time job
1352. JIT manufacturing emphasizes B. Coordinating the accounting informa-
tion system
A. large amounts of inventory on hand so
that the company does not run out of it C. Setting goals and objectives for an en-
tity
B. small amounts of inventory on hand re-
sulting in lower quality goods because pro- D. Analyzing financial statements
duction is rushed
1358. If cost of sales |.15, 440 and Average
C. reducing investment in inventory and Stock |.4, 500, calculate Stock Turnover
increasing the emphasis on quality ratio?
D. both b and c A. 3.02 times
1353. There is a prescribed format for prepa- B. 3.43 times
ration of Management Accounting which is C. 1.48 times
known as GAAP
D. 1.6 times
A. True
1359. Which is NOT an example of an ex-
B. False
pense:
1354. Short term investment is A. Advertising
A. A current asset B. Dividends

C. Depreciation B. Capital receipt $2500, Revenue receipt

D. Insurance $20000

C. Capital receipt $20000, Revenue re-
1360. Process costing is normally used for the ceipt $2500
products that are
D. Capital receipt $22500
A. custom-made
B. purchased from wholesalers 1365. Manufacturing overhead is the cost of
manufacturing activities other than direct
C. identical and produced continuously
materials and direct labor (all indirect
D. different and produced continuously costs).
1361. Choose the correct option A. True
B. False
C. None
D. none of above
A. 1 1366. Organizing is the delegating of respon-

B. 2 sibility for the use of the organization’s
resources, whether human, financial, or
C. 3 physical.
D. 4 A. TRUE
1362. The following are the objectives of ac- B. FALSE
counting except
1367. Contribution is also known as
A. Maintaining accounting Records
A. Contribution margin
B. Protecting Business Assets
B. Not margin
C. Facilitates comparative study
C. Both a & b
D. Providing accounting information to
users D. None of the above
1363. Which of these are the broad classifica- 1368. Thach Corporation uses a job-order cost-
tion of cost? ing system with a single plantwide prede-
A. planning and control termined overhead rate based on machine-
hours. The company based its predeter-
B. cost accumulation mined overhead rate for the current year
C. decision making on total fixed manufacturing overhead
D. stock valuation and profit determina- cost of $665, 000, variable manufactur-
tion ing overhead of $3.00 per machine-hour,
and 70, 000 machine-hours. Recently,
1364. On the last date of his food truck busi- Job T321 was completed with the follow-
ness, A food truck owner sold snacks ing characteristics:Number of units in the
worth $2 500 and sold his truck for job:30Total machine-hours:90Direct mate-
$20, 000. How should these receipts be rial:$630Direct labor cost:$2, 880The unit
treated in his business books? product cost for Job T321 is closest to:
A. Revenue receipt $22500 A. $117.00

B. $58.50 1374. This involves the study and evaluation

C. $154.50 of long-term decision-making.
A. Break-even point
D. $51.50
B. Margin of Safety
1369. The debtor turnover ratio and creditors
C. Capital Investment Appraisal
turnover ratio are measures of:
D. none of above
A. Liquidity
1375. Select all asset accounts listed below.
NARAYAN CHANGDER
B. Solvency
C. Profitability A. Accounts Payable
B. Cash
D. Efficiency
C. Supplies
1370. Financial accounting is
D. Owner’s Capital
A. A language which communicates eco-
nomic information to interested parties 1376. Cash flow statement in based upon
B. Is a financial type of accounting infor- A. Cash basis of accounting

mation and the reporting of the results B. Accrual basis of accounting
and financial position of a business. C. a and b both
C. Accumulation of accounting informa- D. none of these.
tion for a company’s internal users
1377. The proprietor is treated as a creditor to
D. Accumulation of accounting informa-
the extent of his capital according to:
tion for a company’s external users
A. Cost Concept
1371. Financial statements are the major
B. Business Entity Concept
means of communicating accounting infor-
mation to interested parties. C. Going Concern Concept
A. True D. Materiality Concept
B. False 1378. Have a right granted to an individual

or group to market a company’s goods or
1372. 1) The flexible budget contains: services within a certain territory or loca-
A. budgeted amounts for actual output tion.Identify the right term based on this
statement.
B. static budget amounts for planned out-
put A. Franchise
C. actual costs for actual output B. Partnership
D. actual costs for planned output C. Public Limited

D. Sole proprietorship
1373. Participatory budgeting can involve
1379. Goods that have been started but are
A. Senior Manager
not complete are considered classified as
B. Junior Manager which of the following?
C. Head of finance department A. direct materials inventory
D. financial staff B. work in process

C. finished goods inventory 1385. Budgeting is a

D. cost of goods sold A. Technique

B. Method of costing
1380. Which of the following processes occurs
at the business planning stage? C. Maintaining ledget accounts
A. Obtaining data about actual results D. None of these
B. Taking corrective action 1386. If there is a mistake with one of your
C. Comparing actual performance with bank accounts, who should you contact to
budge resolve the issue?
D. Establishing objectives A. The CFPB
B. No one, you can’t resolve the issue
1381. Owners equity just refer to the Capital
of the owner C. Your financial institution
A. True D. The local police station
B. False 1387. Given the GST Clearing Ledger account
shown, calculate the amount paid for Sup-
1382. Which transaction is a capital receipt? plies excluding GST.
A. cash received from sale of inventory
B. bank interest received on deposits
C. premises rent received from the ten-
ant
A. $10
D. proceeds of sale of equipment
B. $110
1383. What is the main purpose of the Cash C. $1000
Flow Statement? D. $1100
A. To assess liquidity and capital em-
ployed 1388. Will the company be able to pay its
short-term debts?
B. To provide a basis for assessing the
value of the business A. Creditor
C. To show how the business is financed B. Finance
and how funds are deployed C. Owner
D. To present the sources and uses of D. Investor
cash
1389. Liquidity ratio measures
1384. Management accounting assists the
A. Firm’s ability to meet current obliga-
management
tions
A. Only in control
B. Proportion of dent and equity in the fi-
B. Only in direction nancing
C. Only in planning C. Firm’s efficiency in utilizing the assets
D. In planning, direction and control D. Overall performance of the firem

1390. Babar is a wholesaler selling furniture 1395. Owner’s drawing and expenses in-
to retailers. Which is a revenue receipt? crease with a
A. Proceeds of sale of furniture at list A. debit
price
B. credit
B. Proceeds from sale of old office equip-
ment at book value 1396. System set up by federal gov’t. to su-
pervise and regulate member banks and to
C. Additional capital introduced to open a
help banks serve the public efficiently.
new furniture showroom.
NARAYAN CHANGDER
D. Mid-term loan from the bank for work- A. e-commerce banking system
ing capital purpose. B. checks and balances system
1391. When closing overapplied manufactur- C. federal reserve system
ing overhead to Cost of Goods Sold, which D. none of the above
of the following would be true?
1397. Which of the following is not a basic fea-
A. Work in Process will decrease.
ture of a financial accounting system?
B. Cost of Goods Sold will increase.
A. Subjective information
C. Net income will decrease.
B. Disaggregate information
D. Gross margin will increase.
C. Both of the given choices
1392. The normal balance is always the side
D. None of the given choices
of the t account that increases.
A. true 1398. Net profit ratio shows the relation be-
tween net profit and
B. false
A. Gross Sales
1393. Why does the owner of a business cal-
culate profit? B. Net sales
A. to find out how much debtors (trade re- C. Sales return
ceivables) owe him D. Cost of sales
B. to find out how much he owes to cred-
1399. Comaprison of two or more depart-
itors (trade payables)
ments or divisions belonging to the same
C. to know how much money may be firm with the objectives of making mean-
taken as drawings without reducing cap- ingful analysis for the purpose of increas-
ital ing the efficiency of the departments
D. to reconcile the cash book balance A. Inter firm comparison
with the balance on the bank statement
B. intra firm comparison
1394. Which of the following words DOES C. Ratio analysis
NOT describe a main focus of management
accounting? D. Department analysis
A. Planning 1400. Fraud means an international misstate-
B. Control ment of financial statements
C. External A. True
D. Decision making B. False

1401. Place the following steps from the five- C. Communication, Recording, Identifica-
step decision process in order:A = Ob- tion
tain information including historical costsB

D. none of above
= Evaluate performance to provide feed-
backC = Make decisions choosing among al- 1405. Which of the following explains the dif-
ternativesD = Make predictions about the ficulty of setting-up EMA?
futureE = Identify the problem and uncer- A. Lack of environmental accounting stan-
tainties dards
A. A, E, D, B, C B. Many environmental costs and materi-
B. E, A, D, B, C als occur outside the organisation
C. E, A, D, C, B C. Ecological issues are not yet known
D. D, C, B, A, E D. None of the given answers

1406. Conversion cost includes cost of convert-
1402. Which is the tools of Management ac-
ing into
counting?
A. Raw material, WIP
A. Budgetary Control
B. Raw material, Finished goods
B. Standard Costing
C. WIP, Finished goods
C. Both the above
D. Finished goods, Saleable goods
D. None of these
1407. The concept of “management by excep-
1403. Benchmarking is a process: tion” requires management’s
A. in which overhead costs are absorbed A. Consideration of only those items
into units of output, or ‘jobs’ which vary materially from plans
B. in which a firm’s performance levels B. Consideration of rare events
are compared against the best levels of C. Consideration of items selected ran-
performance in competing companies or dom
in companies having similar processes
C. which is based on calculating the
breakeven point and analyzing the conse- 1408. Material Issues are maintained by the
quences of changes in various factors cal-
culating the breakeven point A. general accountant
D. in which the underlying processes of B. warehouse keeper
an organization is optimized using a sys- C. store keeper
tematic approach to achieve more effi-
cient goals D. cashier
1409. Bond, debentures and term loans fall un-
1404. Which of the correct sequence of ac-
der:
counting activities?
A. Current assets
A. Recording, Identification, Communica-
tion B. Non-current assets
B. Identification, Recording, Communica- C. Non-current liabilities
tion D. Current liabilities

1410. Mixed Costs 1415. Donations received for a specific pur-

pose is
A. ESB Bill, Telephone
A. Revenue receipt
B. Rent
B. Capital receipt expenditure
C. Raw materials
C. Revenue expenditure
D. none of above
D. Capital receipt
1411. Mr. Rolle owns a supermarket, which
NARAYAN CHANGDER
of the following would be capital receipts 1416. Overall profitability ratio is
A. Purchase of dairy items for the store A. net profit ratio
B. Income received from the sale of a B. gross profit ratio

freezer C. ROI
C. Cash received from the sale of fruits D. operating profit ratio
and vegetables
1417. Expand JIT
D. Discounts received on meat and fish
from his supplier A. Just inventory time
B. Just in Time
1412. Is there a universal method topresent
the final accounts? C. Justify inventory time
A. YES D. None of these
B. NO 1418. Inventory values calculated using vari-
able costing as opposed to absorption cost-
1413. Which of the following would most ing will generally be
likely NOT be included as manufacturing
overhead in a furniture factory? A. equal.
A. The cost of the glue in a chair. B. less.
B. The amount paid to the individual who C. greater.

stains a chair. D. twice as much.
C. The workman’s compensation insur-
1419. Companies are incurring extra costs for
ance of the supervisor who oversees pro-
providing work from home facilities to em-
duction.
ployees during the current pandemic. Iden-
D. The factory utilities of the department tify whether these are controllable or non
in which production takes place. controllable costs.
A. Controllable
1414. The review and appraisal of tendency in
accounting variable is B. Non controllable
A. Ratio analysis C. We need further information to arrive
at a decision as whether a cost is control-
B. Fund flow analysis
lable or non controllable depends on the
C. Trend analysis level of management authority.
D. Average analysis D. none of above

1420. The high-low method uses the highest 1426. Which of the following is not an operat-
and lowest costs regardless of whether ing budget?
they are from the data points with the

A. Direct labor budget
highest and lowest activity levels.
B. Sales budget
A. True
C. Production budget
B. False
D. Cash budget
1421. Which of the following is the example
1427. Which of the following is an example of
of internal users
an expense?
A. Government
A. Machinery
B. Investors
B. Bank
C. Creditors C. Petrol
D. Employees D. none of above
1422. How to determine Return on Invest- 1428. Cost classification is
ment (RoI)?
A. identifying, measuring and recording
A. Margin:Turnover cost information
B. Net Operating Income:Sales B. assigning costs to cost objects.
C. Sales:Average Operating Assets C. arrangement of costs items into logi-
D. Net Operating Income:Average Oper- cal groups.
ating Assets D. Any item or activity that separate mea-
surement of costs can be traced
1423. Cost of diesel and lubricant is an exam-
ple of: 1429. The contribution margin increase when
sales volume remain the same and
A. Operating cost
A. variable cost per unit decrease
B. Fixed charges
B. variable cost per unit increase
C. Semi-variable cost
C. fixed cost decrease
D. fixed cost increase
1424. Determination of cost and cost control
are the primary roles of 1430. Cost are classified as Fixed, Variable &
Semi Variable based on
A. Management Accounting
A. Time
B. Cost Accounting
B. Behaviour
1425. Which of the following is added directly C. Function
to work in process?
D. Management decision
A. Indirect Labor
1431. If total cost of 100 units is Rs 5000
B. Factory depreciation
and those of 101 units is Rs 5030 then
C. Direct Labor increase of Rs 30 in total cost is
D. indirect materials A. Marginal cost

B. Prime cost A. $2, 122, 900

C. All variable overheads B. $2, 591, 500
D. None of the above C. $1, 627, 700
1432. User owned, not for profit, cooperative D. $4, 347, 000
financial institution.
1437. Which of the following statements are
A. commercial bank true according to management accounting?
NARAYAN CHANGDER
B. credit union
A. Management accounting is compul-
C. investment bank sory.
D. safety bank B. Is objective in nature?
1433. For decision making, a listing of the rel- C. It is mainly focused on future
evant costs: D. Management accounting and cost-
A. will help the decision maker concen- accounting are similar.
trate on the pertinent data Explanation:Management accounting
B. will only include future costs helps in evaluating and keeping records
of the activities and performance of the
C. will only include costs that differ business which will be important for man-
among alternatives agers in the future.
D. All of these answers are correct.
1438. Report summarizing your current fi-
1434. Money received against share warrants nancial condition, acknowledges financial
is shown as needs, and sets direction for your future
A. Shareholders’ funds financial activities is known as
B. Other long-term liabilities A. financial plan
C. Long-term provisions B. money management plan
D. Other current liabilities C. budget report
1435. Organizations may exist within organi- D. personal asset report
zations.
1439. Management of Mcgibboney Corpora-
A. TRUE tion has asked your help as an intern in
B. FALSE preparing some key reports for November.
Direct materials cost was $42, 000, direct
1436. Boersma Sales, Inc., a merchandising labor cost was $25, 000, and manufactur-
company, reported sales of 7, 100 units ing overhead was $62, 000. Selling ex-
in September at a selling price of $682 pense was $21, 000 and administrative
per unit. Cost of goods sold, which expense was $38, 000. The conversion
is a variable cost, was $317 per unit. cost for November was:
Variable selling expenses were $44 per
unit and variable administrative expenses A. $116, 000
were $22 per unit. The total fixed selling B. $79, 000
expenses were $157, 200 and the total
administrative expenses were $338, 000. C. $87, 000
The gross margin for September was: D. $129, 000

1440. Mark the right one. Who is Steve Jobs? 1445. The creditors turnover ratio is calculated
A. Founder of Apple as:

B. Founder of Facebook A. Average Creditors / Total Credit Pur-
chases
C. Founder of Nestle
B. Total Credit Purchases / Average Cred-
D. Founder of Google
itors
1441. Bud uses the high-low method of esti- C. Average Debtors / Total Credit Pur-
mating costs. Bud had total costs of $50, chases
000 at its lowest level of activity, when
5, 000 units were sold. When, at its high- D. Total Credit Purchases / Average
est level of activity, sales equaled 12, 000 Debtors
units, total costs were $78, 000. Bud
would estimate variable cost per unit as 1446. Given inventory of Rs. 24, 000 other
current assets of Rs. 12, 000 and current
A. $10.00 liabilities of Rs. 20, 000 the acid test ratio
B. $6.50 will be,
C. $4.00 A. 0.6
D. $7.53 B. 1.6
1442. Management accounting is mainly con- C. 1.8
cerned with future
D. 1.2
A. True
B. False 1447. Which Two might be suitable cost unit
within the credit control department of a
1443. The risk refers to uncertainty regarding company?
the ability of a firm to unwind a position
A. Stationery cost
at little or no cost, and also relates to the
availability of sufficient funds to meet fi- B. Telephone bill
nancial commitments when they fall due. C. Customer account
A. Credit risk
D. Cheque received and processed
B. Liquidity risk
C. Market risk 1448. Cost accounting is needed most by
which type of user?
D. Financing risk
A. Internal users
1444. Management accounting is used as
B. External users
A. Compulsory
B. Optional 1449. Securities premium will appear in the
side of the Balance Sheet.
C. Mandatory
D. Any of the above A. Asset
Explanation:The reports and business per- B. Liability
formance results may not be compulso-
C. Assets & Liability
rily maintained in all the organisations so
management accounting is optional. D. none of above

1450. Who should have overall responsibility B. Budget can be expressed in form of
for Corporate Governance? physical units
A. 1. Risk Management C. It is no way related with the manage-
B. 2. The Board ment plans and policies to be pursued in
future
C. 3. Internal Audit
D. It provides a base for measuring the
D. 4. The Strategy Department success of expected results
E. 5. The Compliance function
NARAYAN CHANGDER
1455. Presents cost data in product wise, pro-
1451. A trader disposed of old office equip- cess wise, department wise, branch wise
ment with a book value $3500 for $3900. and the like.
How would this transaction be treated by A. Financial Planning
the business in its books?
B. Financial Statement Analysis
A. Revenue receipt $3900
C. Cost Accounting
B. Capital receipt $3900
D. Fund Flow Analysis
C. Capital receipt $400, Revenue receipt
$3500 1456. Retained earnings belongs to
D. Capital receipt $3500, Revenue receipt A. Preference shareholders
$400 B. Equity shareholders
1452. For a bookshop owner, which of the fol- C. Lenders
lowing item is a capital receipt? D. Borrowers
A. receipt of sales commission from the
1457. Manufacturing costs is also known as
publisher
A. inventoriable cost
B. cash discount from a supplier of sta-
tionery B. period cost
C. proceeds from the disposal of old C. conversion costs
bookshelf D. overhead costs
D. cash from sale of notebooks
1458. For ROI or RI, companies frequently
1453. overheads that cannot be allocated to choose to define investment as total as-
the production of a particular product and sets available. EVA®users would nor-
relate to the business as a whole. mally use total assets employed minus:
A. direct costs A. long-term debt
B. unit cost B. current liabilities
C. indirect costs C. stockholders’ equity
D. profit D. retained earnings
1454. Which of the following statements are 1459. What is the frequency of report of man-
true? agerial accounting?
A. Budget is prepared for an indefinite pe- A. Once at the end of accounting period
riod B. As frequently as needed

1460. WHAT IS ENVIRONMENTAL MANAGE- 1465. The selling price per unit less the vari-
MENT ACCOUNTING (EMA)? able cost per unit is the

A. method that can help managers to A. Fixed cost per unit
make better decisions that can benefit the B. Gross profit per unit
business and the environment.
C. Operating profit per unit
B. focus on supplying information to man-
agement that accounts for the organiza- D. Contribution per unit
tion’s impact on the natural environment 1466. Cost classification can be done in
C. information from the management per- A. Two ways
spective relates to costs, earnings, and
savings. B. Three ways
C. Four ways
D. Costs incurred to prevent, monitor and
report environmental impacts D. Several ways
1461. Management accounting must comply 1467. return outward means

with company law A. sales return
A. True B. purchase return
B. False C. actual sales
D. actual purchases
1462. If Assets are $15, 500 and Capital is
$9, 600, how much are Liabilities? 1468. What Key Terminology Budget to Pre-
A. $5, 900 pare Performance Analysis, except?
B. $15, 500 A. Planning Budget
C. $25, 100 B. Actual Budget

C. Flexible Budget
D. none of above
D. Variances Budget
1463. Determine margin of safety if profit is
Rs. 15, 000 and P/V ratio is 40% 1469. Report showing the status of a bank ac-
count (generally monthly).
A. Rs. 37, 500
A. cash flow statement
B. Rs. 33, 000
B. bank reconciliation
C. Rs. 38, 000
C. bank statement
D. Rs. 40, 000
D. check register
1464. Which is the first step of accounting pro- 1470. Dividends paid on Equity and Preference
cess? share Capital is cash flows from
A. Classifying A. Operating Activities
B. analyzing and interpretation B. Investing activities
C. recording C. Financing Activities
D. financial statements. D. None of the above

1471. Management Accounting C. consistent reporting

A. Looks to the future D. materiality
B. Records past events 1476. The term management accounting was
C. Is governed by the Companies Act first coined in
D. Is concerned with internal future plan- A. 1950
ning, oranising, controlling and decision
B. 1945
making of a company.
NARAYAN CHANGDER
C. 1955
E. The reports are prepared at regular
short intervals D. 1960
1472. the sub-field of accounting. 1477. Which of the following is not an objec-
tive of cost accounting?
A. Management accounting
A. Ascertainment of cost.
B. Cost accounting
B. Determination of selling price.
C. Financial accounting
C. Cost control and cost reduction.
D. All of the above
D. Assisting shareholders in decision
1473. A production worker is paid a salary of making.
$650 per month, plus an extra 5 cents for
each unit produced during the month. How 1478. Which one of the above graphs illus-
is this type of labour cost best described? trates the costs described in the ques-
tion?A semi-variable cost-when the verti-
A. A variable cost
cal axis represents cost incurred
B. A fixed cost
C. A step cost
D. A semi-variable cost
1474. As per Accounting Standard-3, Cash

Flow is classified into
A. Operating activities and investing ac-
tivities A. Graph 1
B. Investing activities and financing activ- B. Graph 2
ities C. Graph 4
C. Operating activities and financing ac- D. Graph 5
tivities
1479. Assets
D. Operating activities, financing activi-
ties and investing activities A. Anything owed by the company
1475. Concept:The same accounting proce- B. Anything owned of value by the com-
dures must be followed in the same way pany
each accounting period 1480. Did the company earn a satisfactory in-
A. accounting period cycle come?
B. objective evidence A. Creditors

B. Finance C. Cash discount received from a supplier

C. Management of tomato sauce

D. Cash received from an insurance claim
D. Investors
1485. Below is the factors that increase the
1481. According to George R. Terry, may
need of management accounting, EXCEPT
be described as a process of finding out
what is being done and comparing ac-
tual results with the corresponding budget A. Regulatory environment
data in order to approve accomplishment. B. Increase emphasis on profitability
A. Budgetary control C. World wide competition
B. Budget D. Rapid development and implementa-
C. Budgeting tion of technology
D. None of the above 1486. Liquid assets is determined by

A. Current assets-stock-Prepaid ex-
1482. Which of the following will not affect penses
the Gross profit
B. Current assets + stock + prepaid ex-
A. Cost of transporting goods to cus- penses
tomers
C. Current assets + Prepaid expenses
B. Purchase Returns
C. Sales Returns
1487. Management accounting is accounting in
D. Import duty
relation to statutory audit function.
1483. An advantage of a negotiated transfer A. True
price of a product to be transferred be- B. False
tween divisions is the:
C. May be
A. close relationship between the negoti-
ated price and the market price D. none
B. negotiated transfer price preserves di- 1488. It deals with determining the total costs
visional autonomy involved in the production of a good or ser-
vice.
C. negotiations usually do not require
much time and energy A. ProductCosting and Valuation
D. simplicity of its computations and B. Cash FlowAnalysis
close approximation to market price C. InventoryTurnover Analysis
1484. Miss Taylor owns a pizza business. D. ConstraintAnalysis
Which transaction would be considered to
1489. Variable overhead costs include:
be revenue receipts?
A. plant-leasing costs
A. Cash received from the sale of an old
pizza oven B. the plant manager’s salary
B. Cash received from the bank as a loan C. depreciation on plant equipment

for expansion of the business D. machine maintenance

1490. COGS (or cost of sales when referring 1495. Budget prepared for one level of activ-
to services) is workedout by the formula: ity is
A. = Opening stock + Purchases- A. Fixed budget
Closing stock B. Flexible budget
B. = Sales revenue-Cost of goods sold C. Activity budget
C. = Gross profit-Expenses D. Master budget
D. none of above
1496. What happens if the price of a product
NARAYAN CHANGDER
1491. A company has completed and trans- is too low?
ferred out 10, 000 units during a period A. High quantity of sales but low prof-
and had 5, 000 units in the ending work itability
in process that were 50% complete. What B. Low quantity of sales but high prof-
is the total equivalent units for conversion itability
costs?
C. High quantity of sales and high prof-
A. 12, 500 itability
B. 15, 000 D. Low quantity of sales and low prof-
C. 17, 500 itability
D. 7, 500 1497. In activity based costing, a cost driver
is:
1492. Hong Kong Telecom has been a ,
thanks to a huge number of international A. an overhead cost
calls. B. a direct product cost
A. petty cash C. a resource consuming activity that
B. cash cow causes overheads
C. cash on delivery D. a variable cost
D. hard cash 1498. Do not subvert organization’s legiti-
mate objectives is the characteristics of
1493. The owner withdraws cash for personal Based on IMA code of ethics.
use
A. Integrity
A. Assets (D)
B. Competence
B. Liabilities (D)
C. Confidentiality
C. Equity (NE)
D. Objectivity
D. none of above
1499. Which of the following is an example of
1494. The management accounting can be Income
stated an extension of
A. Cost Accounting
B. Financial Accounting
C. Responsibility Accounting
D. Both A and B
E. A, B, C

A. Sales D. use processes, practices, techniques,

B. Mortgage materials, products, services or energy to
paid the loss coz of pollution

C. Equipment
1504. Financial accounting includes costing;
D. none of above
management accounting includes book-
1500. It is predetermined cost keeping
A. True
A. Standard Costing
B. False
B. Marginal Costing
C. Cost Accounting 1505. per unit of output do not alter when
volumes change
D. Fund Flow Analysis
A. Variable Cost
1501. What is standard cost? B. Fixed Cost
A. The average unit cost of product pro- C. Semi Variable Cost
duced by other companies.
D. Stepped Fixed Cost
B. The average unit cost of product pro-
duced in the current period. 1506. Which of the following statements is
true?
C. The budgeted unit cost of product pro-
duced in a particular period. A. The economic, legal, political, social,
and cultural environments differ across
D. The average unit cost of product pro- countries.
duced in the previous period.
B. The import quotas and tariffs remain
1502. Budgets can play both planning and con- the same across all countries according to
trol roles for management. the standards set by United Nations.
A. True C. The advances in telecommunications
and transportation, the availability of ma-
B. False terials and skilled labor does not differ sig-
nificantly across countries.
1503. HOW COMPANY DO ACTIONS TO PRE-
VENT THE EMISSION LEAK TO ENVIRON- D. The fixed rate policy is followed across
MENT? all countries to avoid price fluctuations
and inflation.
A. use processes, practices, techniques,
materials, products, services or energy to 1507. Who runs the company operations for
avoid, reduce or control the generation of large companies?
emissions or discharges of any pollutant
A. Shareholders
or waste
B. Board of Directors
B. use processes, practices, techniques,
materials, products, services or energy to C. External auditors
eliminates the generation of emissions or D. Stakeholders
discharges of any pollutant or waste
1508. A quantitative plan is
C. use third party to avoid, reduce or con-
trol the generation of emissions or dis- A. Budget
charges of any pollutant or waste B. Cash flow statement

C. Fund flow statement 1514. Fixed costs are conventionally deemed

D. Ratio to be which of the following?
A. Constant per unit of output
1509. Office equipment
B. Constant in total when production vol-
A. Liability ume changes
B. Expenses C. Outside the control of management
C. Asset D. Easily controlled
NARAYAN CHANGDER
D. none of above
1515. The accountant wants to assign costs
1510. 1) Who is known as the father of ac- to boxes of biscuits. Which costs can be
counting? traced directly to boxes of biscuits?
A. Leonardo da Vinci A. The cost of flour and baking soda
B. Friar Luca Pacioli B. The cost of packing labor
C. Alkhawarizmi C. The wages of the mixing labor
D. Al Mazendarany D. All of these
1511. Jeff’s Construction, LLC bought a piece 1516. AgroBankMajlis Amanah Rakyat
of equipment in 2001 for P 10, 000. To- (MARA)Amanah Ikhtiar Malaysia
day this piece of equipment is only worth P (AIM)Tabung Ekonomi Kumpulan Usaha
2, 000. Jeff would still report the equip- Niaga (TEKUN NASIONAL)Identify the ser-
ment at its purchase price of P 10, 000, vice offered by the institutions.
less depreciation, even though its current A. Provide funding to start a business or
fair market value is only P 2, 000. implement a business
A. Historical Principle B. Assist in reducing the problem of retail
B. Business Entity space and industrial sites in the area of
strategic and viable
C. Accrual Principle
C. To increase the technical knowledge
D. Adequate Disclosure Principle available among the entrepreneurs to at-
tend the education provided.
1512. Ideal current ratio is
D. Assistance in the form of information
A. 2:1
relating to business opportunities, statis-
B. 1:2 tics, new discoveries, research.
C. 1:1
1517. The total Variable Cost
A. is constant
1513. Which of the following are the debts of B. is directly related to the output
obligations of a business?
C. is inversely related to the output
A. Assets D. has no relation with output
B. Liabilities
1518. The following would appear in which
C. Owner’s equity section of the cash flow statement? cash
D. Bonds received from sales of services

A. Operating 1523. Profit maximisation is

B. Investing A. It is indicator of economic efficiency

C. Financing B. primary objective of business
D. none of above C. Measurement of Success of business
decisions
1519. Dizzy employees a certified operator for
D. All of the above
each of its 35 rides. Each operator is paid
$20 per hour. The cost of the certified op- 1524. Net profit formula is:
erators would best be described as a:
A. =COGS = Opening stock +
A. fixed cost Purchases-Closing stock
B. mixed cost B. =Gross profit-Expenses
C. step-variable cost
1525. 1) Which of the following is correct?
D. true variable cost
A. Owner’s Equity = Liabilities + Assets
1520. Management accounting deals with B. Liabilities = Assets + Owner’s Equity
managing C. Assets = Liabilities + Owner’s Equity
A. Decision making D. Assets = Owner’s Equity
B. Raising finance
1526. The concept of management accounting
C. Tax returns was coined by
D. Final accounts preparation A. R.N.Anthony
Explanation:Decision making is the most
important function of a management ac- B. J.Batty
count which helps the managers to re- C. James H.Bliss
solve any financial problems.
D. American Accounting Association
1521. The following users are the internal 1527. Current ratio is 2:1 and working capital
users of accounting except is Rs. 5000, then current asset is
A. Creditors A. Rs. 5000
B. Managers B. Rs. 10000
C. Employees C. Rs 1000
D. none of above D. Rs 20000
1522. A business bought a new computer sys- 1528. Which of the following can be treated
tem for office use. Which of the following as either current liability or non-current li-
is treated as revenue expenditure? ability depending on the adjustments?
A. computer speaker A. Provision for taxation
B. computer software B. General reserve
C. laser printer cartridge refill C. Goodwill
D. laser printer D. None of the above

1529. Given the cost formula Y = $23, 000 + 1535. rent received will be recorded in
$8X, total cost at an activity level of 7, A. profit and loss account debit side
000 units would be:
B. profit and loss account credit side
A. $33, 000
C. trading account credit side
B. $79, 000
D. trading account debit side
C. $23, 000
D. $56, 000 1536. Cost is classified into:
NARAYAN CHANGDER
1530. Debit is on the left and credit is on the
right for ALL t accounts.
A. true
B. false
1531. Throughput revolves around

A. Resources
A. Cost and expense
B. Operating expenses
B. Expense and revenue
C. Bottleneck resources
C. Indirect expense and Overheads
D. KPI
D. Direct cost and Indirect cost
1532. Management accounting deals with
1537. EOQ expands to mean
A. Qualitative information
A. equal opportunity production
B. Quantitative information
B. economic order quantity
C. None of the above
C. equal order quantity
D. Both a and b
D. economic order quality
1533. There are the function of Management
Accounting, except 1538. Cost of diesel and lubricant is an exam-
ple of:
A. As an Audit Access
A. Operating cost
B. Coordination of Various Company Ac-
tivities B. Fixed charges
C. Data sources for the accountability of C. Semi-variable cost
each level of management D. None of the above
D. Information Systems for External Par-
ties 1539. Which of the following costs is not rele-
vant when considering the closure of a de-
1534. Cost unit of a sugar industry can be partment within a factory?
A. per liter A. Direct Labour Cost
B. per ton B. Direct Material Cost
C. per acre C. Variable Overheads
D. per meter D. Fixed Overheads

1540. Looks mainly at historical information 1546. Expenses DECREASE owners equity.
A. Financial Accounting A. True

B. Management Accounting B. False
1541. Which of the following are true about 1547. fund means
breakeven point
A. Current assets
A. Contribution margin equals fixed costs
B. Current liabilities
B. The level of sales at which profit is zero
C. Working capital
C. Contribution margin equals variable
costs D. Net working capital
D. The amount of expense at which profit 1548. Revenue is referred to as
is zero
1542. Security and Exchange Commission

A. Internal User
B. External User
1543. Cost accounting aims at

A. cost control and reduction
B. finding profit or loss
C. ascertaining financial position
A. Profit
D. making plans and decisions
B. Sales turnover
1544. The accounting which gives segregated C. Gross profit
information about the various products of
Dabur is D. Sales returns
A. Financial Accounting 1549. The sources of money generated by the
B. Money Accounting sale of products or services.
C. Cost Accounting A. Revenue
D. Management Accounting B. Expenses
1545. If the desired profit is Rs.250000 and C. Net Income

the fixed cost is Rs.1, 80, 000, how many D. Net Loss
units should be made to attain the required
profit? The Contribution received from 1550. is a detailed budget of cash receipts
each unit is Rs.25 and selling price per unit and cash expenditure incorporating both
is Rs.40. revenue and capital items
A. 17200 units A. Cash budget
B. 10750 units B. Sales budget
C. 28667 units C. Capital Expenditure budget
D. 15000 units D. Overhead budget

1551. Data are checked by 1557. The purpose of accounting is to

A. External users
B. Internal users
C. External users + Internal users
D. None of the answers
1552. Which one of the following is least likely
to be an objective of cost accounting sys-
NARAYAN CHANGDER
tem? A. communicate information to inter-
A. Product Costing and Inventory Valua- ested users so that they can make in-
tion formed decisions
B. Sales Commission Determination B. communicate financial information to
C. Department Efficiency interested users so that they can make in-
formed decisions
D. Income Determination
C. communicate non-financial informa-
1553. Cost of Goods Manufactured is $200, tion to interested users so that they can
000, beginning Finished Goods is $50, make informed decisions
000, ending Finished Goods is $100, 000,
D. none of above
and ending Work In Process is $10, 000.
What is the Cost of Goods Sold? 1558. What is the formula for cost of sales?
A. $150, 000 A. Opening Stock-Purchases + Closing
B. $250, 000 Stock
C. $100, 000 B. Opening Stock + Purchases + Closing
D. $50, 000 Stock
C. Opening Stock + Purchases-Closing
1554. Management Accounting is-
Stock
A. Subjective
D. Opening Stock-Purchases-Closing
B. Objective Stock
C. Subjective and objective both
1559. Describe the method of costing to be ap-
D. None of these plied in case of Nursing Home
1555. solvency ratio include A. Operating Costing
A. G/P Ratio B. Process Costing
B. Fixed Assets turnover C. Contract Costing
C. Capital gearing ratio D. Job Costing
D. P/E ratio
1560. Management accounting involves
1556. Feed-forward control provides informa-
A. Recording of costs
tion about performance deficiencies by
monitoring outputs. B. Recording of transaction
A. True C. Analysis and interpretation of data
B. False D. Preparing of financial statement

1561. Calculate MCVactual quantity is 100Ac- 1565. Financial analysis and interpretation can
tual price is 600Budgeted quantity be done through trend analysis
150Budgeted price 650

A. True
A. 37500(A)
B. False
B. 36000(F)
C. May be
C. 45000(A)
D. none
D. none
1566. Concept:a business’s records should
1562. is the inflow of moneyfrom ordinary never be mixed with an owner’s personal
trading activities, e.g. cash sales, credit records and reports
sales, charges/fees and royalties.
A. adequate disclosure
A. Revenue
B. business entity
B. Costs
C. objective evidence
1563. Data about Anabelle Company’s produc-
tion and inventories for the month of June D. going concern
are as follows:Purchases-direct materials
P143, 440Freight in P5, 000Purchase re- 1567. In comparing financial and management
turns and allowances P2, 440Direct Labor accounting, which of the following more ac-
P175, 000Actual Factory Overhead P120, curately describes management accounting
000InvetoriesJune 1:Finished Goods P68, information?
000Work in Process P110, 000Direct Ma- A. historical, precise, useful
terials P52, 000June 30:Finished goods
B. required, estimated, internal
P56, 000Work in Process P135, 000Di-
rect Materials P44, 000Annabelle Com- C. budgeted, informative, adaptable
pany applied factory overhead to produc- D. comparable, verifiable, monetary
tion at 80% of direct labor cost. Over-or
underapplied overhead is closed to cost of 1568. bad debts will be recorded in
goods sold at year-end. The company’s ac-
counting period is on the calendar year ba- A. trading account credit side
sis.The amount of over/under applied for B. profit and loss account debit side
the month of June was
C. balancesheet liablity side
A. 140, 000 OA
B. 120, 000 UA
C. 20, 000 OA 1569. Direct costs:
D. 20, 000 UA A. are incurred to benefit a particular ac-
counting period.
1564. Solvency ratio measures
B. are incurred due to a specific decision.
A. Ability to meet its long term debts
C. can be easily traced to a particular
B. Ability to meet its short term debts cost object.
C. ability to meet sundry creditors in time D. are the variable costs of producing a
D. Ability to solve problems product.

1570. Monetary measurement can be de- B. scattergraph

scribed as
C. contribution margin graph
A. items that can be given a money value
D. dependent variable
are to be recorded in New Zealand Dollars
B. items that can be given a money value 1576. STATEMENTS BELOW ARE THE BENE-
are to be recorded in the currency of the FIT OF ENVIRONMENT MANAGEMENT AC-
country they have been bought from COUNTING IMPLEMENTATION FOR COM-
PANY, EXCEPT
NARAYAN CHANGDER
1571. In a make-or-buy decision, which of the
following would NOT be relevant? A. MAINTAIN THE STAKEHOLDERS SAT-
ISFY
A. the quality of the product
B. HELP FOR MAKING DECISIONS
B. the portion of fixed costs that could be
eliminated by outsourcing C. INCREASE ENVIRONMENT AND ECO-
C. a lease that could be discontinued NOMIC PERFORMANCE
upon accepting the “”buy proposal”” D. DECREASE TAX PAYMENT
D. property taxes on the plant that will
still be necessary even if the product is 1577. Which type of bank account typically of-
outsourced fers the highest interest?
A. savings
1572. The sales manager has prepared a man-
power plan to ensure that sales quotas for B. CD
the forthcoming year are achieved. This is C. checking
an example of what type of planning?
D. money market
A. Strategic planning
B. Tactical planning 1578. Wages and Salaries of office workers
C. Operational planning A. Capital Expenditure
D. Corporate planning B. Revenue Expenditure
1573. Creditor 1579. is Period cost
A. Internal users
A. Fixed cost
B. External users
B. Variable Cost
1574. The difference between a person’s as- C. Total cost
sets and liabilities.
D. Direct cost
A. credit
B. owner’s equity 1580. Which of the following is irrelevant for
C. net worth decision making?
D. interest A. Opportunity Cost

B. Sunk Cost
1575. A graph of the relationship between to-
tal cost and activity level is called a C. Further Processing Cost
A. Relevant range D. Variable Cost

1581. Selling Price = Target cost C. is inversely related to the output

A. Overheads D. has no relation with output

B. Cost of Production 1587. For product consting purposes, an indi-
C. Desired Profit rect factory cost
D. Cost drivers A. is not directlty chargeable to the com-
pany
1582. Securities and Exchange Commission
(SEC) B. is chargeable to prime cost
A. Internal User C. is chargeable to conversion costs

D. is never included in the computation of
B. External User
product costs
1583. Information Technology System Fea-
1588. Mixed costs is a combination of variable
tures
costs and fixed costs. It is also known as
A. Data collection
A. semi-variable costs
B. Data files Data files
B. semi-fixed costs
C. Communication and network speeds
C. fixed cost
D. Performance Ability
D. relevant cost
E. Computer software
1589. Which of the following describes a cost
1584. This is a cost that is incurred in the centre?
course of making a product, delivering a
A. A unit of output or service for which
service or running a department, but which
costs are ascertained
cannot be traced directly and in full to the
product, service or department. B. A function or location for which costs
are ascertained
A. Fixed
C. A segment of the organisation for
B. Direct
which budgets are prepared
C. Variable
D. An amount of expenditure attributable
D. Indirect to a particular activity
1585. The branch of accounting that generates 1590. Dividends This shows the amount of net
reports and information for the use of in- profit after interest and tax that is dis-
ternal management is known as: tributed to the owners (shareholders) of
A. Tax accounting the company.
B. Managerial or management account- A. true
ing B. false
C. Auditing 1591. The term fund refers to
D. International accounting A. Reserves
1586. The per unit Variable Cost B. Working capital
A. is constant C. Profits
B. is directly related to the output D. None of these

1592. A company absorbs overheads on ma- 1597. Which convention in accounting states
chine hours which were budgeted at 11, that profits are not recognized until real-
250 with overheads of £258, 750. Ac- ized, but expected losses are accounted for
tual results were 10, 980 hours with over- even if not yet certain?
heads of £254, 692. Overheads were? A. Business Entity Convention
A. Over-absorbed by £2, 152 B. Historic Cost Convention
B. Over-absorbed by £4, 058 C. Prudence Convention
NARAYAN CHANGDER
C. Under-absorbed by £4, 058 D. Going Concern Convention
D. Under-absorbed by £2, 152
1598. Sales =500000, VC = 160000, Fc =
1593. Where is management accounting ap- 30000, Profit = 40000 find sales to earn
plied? a profit of 50000 and profit at a sales of
A. Small trading organisations 900000.
B. NPOs A. 514706
C. Cooperative societies B. 514706312000
D. Large industrial and trading organisa- C. 441176

tions D. 58824
1594. Materials cost in the original budget 1599. What is the main purpose of the State-
was increased by 5% to £3.15. We are ment of Change in Equity?
now revising the budget and need to in- A. To show the relationship between as-
crease the materials cost by 8% rather sets, liabilities, and equity
than by 5%. What is the revised amount?
B. To assess the value of the business
A. £3.15
C. To provide a basis for decision making
B. £3.40
D. To show shareholder contribution and
C. £3.24 movement in equity
D. £3.23
1600. Liquid Ratio is equal to liquid assets di-
1595. There are three sections to an income vided by
statement:the trading account, the profit A. Current Liabilities.
and loss account, and the appropriationac-
count. B. Total Liabilities.
A. True C. Contingent Liabilities.
B. False D. Non-Current Liabilities.
1596. Which of the following transactions will 1601. Which of the following statements
improve the Current Ratio? refers to management accounting informa-
tion?
A. Purchase of Goods for Cash.
A. There are no regulations governing the
B. Payment to Trade Payables. reports.
C. Credit purchase of Goods. B. The audience tends to be stockholders,
D. Cash collected from Trade Receivables creditors, and tax authorities.

C. The reports are generally delayed and C. BEP

historical. D. Margin of Safety

D. It primarily measures and records
business transactions. 1606. Goodwill is one of the
A. Intangible assets
1602. provides an estimate of the capital
amount that may be required for buying B. Current assets
fixed assets needed for meeting produc- C. tangible assets
tion requirements. D. Liquid assets
A. Production budget
1607. Period costs
B. Cash budget
A. are selling costs and administrative
C. Capital expenditure budget
costs.
B. are used to compute product cost.
1603. Which one of the above graphs illus- C. can be included in overhead costs.
trates the costs described in the ques-
D. are carried in inventory until the goods
tion?A linear variable cost-when the ver-
are sold.
tical axis represents cost incurred
1608. What are the main risks of kaizen bud-
get?
A. Product quality decreases
B. Cost reduction
C. Decrease in production quantity
D. Margin Decline
A. Graph 1
B. Graph 2 1609. Which of the following are the assump-
tions of marginal costing?A) Cost can be di-
C. Graph 4 vided into fixed and variableB) Fixed cost
D. Graph 5 remains constant at all levels of outputC)
Variable costs varies in proportion to the
1604. What is the main objective of manage- volume of outputD) Per unit selling price
ment accounting? remain unchanged at all levels
A. To identify and analyze the result of A. A & B
business operations.
B. B & C
C. A & D
C. To check and maintain accounting
records D. A, B, C & D
D. To remind the amount due to cus- 1610. Furniture is regarded as

tomers A. Assett
1605. Profit / PV ratio is equal to B. Fixed Assett
A. Net Profit C. Liability
B. Contribution D. Current Liability

1611. Final account includes 1617. What is the basic function of manage-
A. Trial balance ment accounting?
B. journal entries A. To serve public
C. trading account, profit and loss ac- B. To manage the performance of the fi-
count and balance sheet nancial function
D. ledger account C. To serve government
D. All of the above
1612. In the cost-volume-profit graph
NARAYAN CHANGDER
Explanation:The financial operations are
A. neither the total revenue curve nor the managed and regulated by management
total cost curve appear accounting.
B. the area of loss cannot be determined
1618. Below is the information of Funder
C. the area of profit is to the left of the Bhd for the month:Total material costs
break-even point RM80, 000Equivalent units of materials
D. both the total revenue curve and the 10, 000Total conversion costs RM120,
total cost curve appear 000Equivalent units of conversion costs
20, 000How much is the total manufactur-
1613. What is the formula for Cost of sales ing cost per equivalent unit?
A. Sales-Gross profit A. RM14.00
B. Sales-Sales return B. RM6.67
C. Sales-Net sales
C. RM6.00
D. None of these
D. RM8.00
1614. Bank fees
1619. Which of the following statements is
A. Expense correct?
B. Revenue A. Management accounting systems pro-
C. Owner’s Equity vide information for use in fulfilling legal
D. none of above requirements.
B. Management accounting systems pro-
1615. is the tool/s of management ac- vide information for the use of decision-
counting makers within an organisation.
A. Marginal Costing C. Management accounting systems pro-
B. Budget and budgetary control vide information for use by shareholders.
C. Standard Costing D. Management accounting systems pro-
D. All of the above vide information for use by tax authorities.
1616. Which of the following is not a branch 1620. Total Fixed cost
of accounting? A. remains constant irrespective of the
A. cost accounting output
B. financial accounting B. is directly related to the output
C. book keeping and accounting C. is inversely related to the output
D. management accounting D. no relation with output

1621. Working out the for each product 1625. What is the basic premise of cost con-
helps managers to set the right price in or- cept?
der to be profitable

A. Cost ascertainment
A. break-even price B. Tax compliance
B. profit margin
C. Financial audit
C. bottom line
D. Profit analysis
D. selling price
1626. Capital
1622. How is cost of sales calculated?
A. Revenue
B. Liability
C. Owner’s Equity
D. none of above
1627. X Ltd. has earned a contribution of Rs.

2, 00, 000 and Net Profits of Rs. 1, 50,
000 on sales of Rs. 8, 00, 000. What is
its MOS
A. Rs. 7, 50, 000
B. Rs. 5, 75, 000
A. Opening inventory-Purchases + Clos-
ing Inventory C. Rs. 6, 00, 000
B. Opening inventory + Purchases + D. Rs. 6, 50, 000
Closing Inventory
1628. Following falls under the ambit of scope
C. Opening inventory-Purchases-Closing of management accounting Except
Inventory
A. Cost accounting
D. Opening inventory + Purchases-
B. None of these
Closing Inventory
C. Taxation
1623. Which is the traditional method of Capi-
tal budgeting? D. Revaluation account
A. Accounting Method 1629. A triggers a change in the cost of an

B. Payout Method activity.
C. Pay back Method A. Cost driver
D. All of the above B. Resources
C. Activity
1624. Total contribution margin divided by to-
tal sales is the D. None of these
A. indifference point. 1630. Management is responsible towards
B. margin of safety. which of the following?
C. target income. A. All shareholders
D. contribution margin ratio. B. Employees

C. Government 1634. If Capital is $17, 500 and Liabilities are

D. Society $7, 500, how much are Assets?
E. All stakeholders A. $7, 500

B. $10, 000
1631. What is a statement of financial posi-
tion/ balance sheet? C. $25, 000
A. a statement of all assets and liabilities D. none of above
on a certain date
NARAYAN CHANGDER
1635. What type of financial statement is
B. a statement of all the balances in the
shown?
ledger accounts on a certain date
C. a statement showing all the receipts
and payments for a financial year
D. a statement showing the income and
expenditure for a financial year
1632. What is the primary benefit of EMA for

organizations?
A. Calculating greenhouse gas emissions
A. Income Statement
B. Preparing financial statements
B. Cash Flow Statement
C. Improving decision-making
C. Balance Sheet
D. Supporting tax compliance
D. Bank Statement
1633. The company’s performance evaluation
system rewards managers for meeting 1636. A bond, in general, is
profitability targets. Which of the follow-
A. a type of investment
ing actions could be considered unethical?
A. A manager makes a decision to re- B. a scheme by the government
place old machines with an energy ef- C. Jimmy cracked corn and no one cares
ficient machines but over the short-run
D. a payment for a bridge
profits will suffer.
B. A senior manager design performance 1637. The return on investment is usually con-
evaluation models that are inconsistent sidered the most popular approach to mea-
with the personal goals of the middle man- sure performance because:
agers. A. it blends all the ingredients of prof-
C. Same facts as part B but the lower- itability into a single percentage
level managers will be evaluated on the
B. once determined, there is no need
expectation that the first year would be
to use it with other measures of perfor-
poor and the next year would be much bet-
mance
ter.
C. it throws light on the company’s work-
D. Lower level managers refuse to up-
ing capital
grade machinery because the first year
will show lower than expected profits de- D. it measures the cash balance of the
spite significant long-term savings. company in the most efficient manner

1638. Which ONE of the following is a charac- B. Cost of sales

teristic of management accounting? C. Prime cost

A. It is based on future events D. Works cost
B. It provides information for people out-
side the business 1644. Management accounting deals with
C. It is based on past events A. Qualitative information
D. It complies with company law and ac- B. Quantitative information

counting rules C. Qualitative and quantitative informa-
tion
1639. Characteristics of total quality manage-
ment include: D. None
A. focusing on customer satisfaction 1645. A total cost is described as staying the

B. striving on continuous improvement same over a certain activity range and
then increasing but remaining stable over
C. involvement of the entire work force a revised activity range in the short term.
D. All of the above are characteristics of What type of cost is this?
TQM A. A fixed cost
1640. Calculate the prime cost from the fol- B. A variable cost
lowing information:Direct material pur- C. A semi-variable cost
chased:Rs. 1, 00, 000 Direct material con-
sumed:Rs. 90, 000 Direct labour:Rs. 60, D. A stepped fixed cost
000 Direct expenses:Rs. 20, 000 Manu- 1646. Global Giant, a multinational corpora-
facturing overheads:Rs. 30, 000 tion, has a producing subsidiary in a low
A. Rs. 1, 80, 000 tax rate country and a marketing sub-
B. Rs. 2, 00, 000 sidiary in a high tax country. If Global Gi-
ant wants to minimize its worldwide tax
C. Rs. 1, 70, 000 liability, we would expect Global Giant to:
D. Rs. 2, 10, 000 A. stop producing in the low tax rate coun-
try
1641. Fixed or variable expense:Rent?
B. stop marketing in the high tax rate
A. Fixed
country
B. Variable
C. establish a low transfer price when
1642. The shareholders fund consists of the producing unit sells to the marketing
unit
A. Preference shares
D. establish a high transfer price when
B. Equity shares the producing unit sells to the marketing
C. Reserves & Surplus unit
D. All 1647. Management accounting is based on fu-
1643. What is the total of all direct cost ture events
known as A. True
A. Cost of production B. False

1648. Which of the following forms an item of 1653. Generally, the emergence and growth
current assets? of management consultancy may be at-
A. Loans given tributed to the following factors, except
A. Growth in size and complexity of busi-
B. Loans taken
ness firms
C. Bank overdraft
B. Complexity in managing and conduct-
D. Machinery ing a business.
C. The development of techniques for the
NARAYAN CHANGDER
1649. What is the classification of Sales?
solution of management problems and
A. Revenue businessmen’s awareness of how to solve
B. Expense such problems
C. Asset D. Need for adequate and timely informa-
tion in management decision-making
D. Liability
1654. is recording, analyzing, and inter-
1650. helps the management performing preting financial information there off.
this function by assigning specific respon- A. Accounting
sibilities to different people
B. Balance Sheet
A. Planning
C. Income statement
B. Organising
D. revenue
C. Controlling
1655. A liability is
D. Time saving
A. obligation of a business as a result of
1651. During the year, a business was bought a past transaction
by issue of Rs 25, 000 debentures and Rs B. Something a business has to pay be-
25, 000 shares. The business bought had cause of a past event
machine worth Rs 20, 000, Debtors Rs 15, C. current obligation of a business as a
000, Stock Rs 5, 000 and Creditors Rs 5, result of a past transaction
000. Determine the effect of this transac-
tion on flow of funds. D. none of above
A. Net outflow of Rs 15, 000 1656. Import duty paid will be included in
B. Net inflow of Rs 15, 000 A. trading account credit side
C. Neither inflow nor outflow B. trading account debit side

1652. If sales are Rs. 5, 00, 000 and Net
profit is Rs. 1, 20, 000. Net profit ratio 1657. Net revenue is
is
A. 24%
B. 60%
C. 50%

A. Revenue-Sales return 1663. If the cost of materials for producing

B. Revenue + Sales return 1000 units is Rs 15, 000, what shall be
the cost of materials for 1, 500 units

C. Revenue + Purchases return
A. Rs 15, 000
D. Revenue-Purchases return
B. Rs 22, 500
1658. If P/V ratio is 40% of sales then what C. Rs. 30, 000
about the remaining 60% of sales: D. Rs. 25, 200
A. Profit
1664. Which of the following items relating to
B. Fixed Cost bill payable is transferred to total creditor
C. Variable Cost account?
D. Margin Of safety A. Opening balance of bills payable
B. Closing balance of bills payable
1659. The following would appear in which
C. Cash paid for bills payable
section of the cash flow statement? Cash
received from the sale of property D. Bills payable accepted during the year
A. Operating 1665. Warehouse rent is a part of
B. Investing A. Prime cost
C. Financing B. Factory cost
D. none of above C. Distribution cost
D. Production cost
1660. From the given items which is not
shown under current liabilities 1666. Break-even quantity for the multiple-
A. Trade payables product firm can be calculated by
B. Short-term provisions A. dividing segment fixed cost by the

weighted average contribution per unit
C. Short-term borrowings
B. dividing total fixed cost by the
D. Inventories weighted average contribution per unit
1661. Investigation is an examination of C. dividing total fixed cost by the overall
variable
A. Books of accounts
D. multiplying total fixed cost by sales mix
B. Trial balance
1667. kgs of Raw Material is required for a
C. Final account
new project. 150 kgs are already in stock
D. All of these with no other use. If not used in this
project, it will be sold as scrap for Rs.10
1662. Which of the following costs is not a pe- per kg. Current Market Price is Rs.11.
riod cost? What is the relevant material cost?
A. Indirect materials A. 1500
B. Shipping costs of finished goods B. 2600
C. Advertising C. 1100
D. Sales commissions D. 2750

1668. A repetitive action fulfilling a business C. Asset

function and increasing the worth of the D. none of above
product and the price that the customer is
willing to pay for the product is referred 1673. Which of the following transfer-pricing
to as a: methods always achieves goal congru-
A. non-value added activity ence?
B. value-added activity A. a market-based transfer price

B. a cost-based transfer price
NARAYAN CHANGDER
C. business value-added activity
D. activity analysis C. a negotiated transfer price
D. full-cost plus a standard profit margin
1669. Ratio analysis involves the process of
1674. At the end of her first year of trad-
A. Recording ing, Mona provides the following informa-
tion.What is Mona’s gross profit?
B. Computation
C. Relationship between two items
D. None of these
1670. A business sells its single product for

£40. The variable costs of this product to-
tal £32. The fixed costs of the business
are £100, 000.What is the sales revenue
required in order to make a profit of £200,
000? A. $6400
A. £37, 500 B. $7100
B. 250, 000 C. $8700
C. £12, 500, 000 D. $11 000
D. £1, 500, 000 1675. Future decisions are based on
1671. Gullett Corporation had $26, 000 of A. Profit
raw materials on hand on November 1. B. Risk
During the month, the Corporation pur-
chased an additional $75, 000 of raw ma- C. Historical data
terials. The journal entry to record the pur- D. none
chase of raw materials would include a:
1676. Joint Products and By Products are one
A. debit to Raw Materials of $101, 000 and the same thing.
B. credit to Raw Materials of $75, 000 A. True
C. debit to Raw Materials of $75, 000 B. False
D. credit to Raw Materials of $101, 000
1677. is concerned with identifying the
1672. Salaries root causes of activity costs.
A. Expenses A. Direct analysis
B. Liability B. Activity analysis

C. Driver analysis A. 1
D. Causal analysis B. 2

1678. Which of the following would be an ex- C. 3
ample of a direct materials cost?
D. 4
A. engine on an airplane
B. lubricant used to manufacture a light- 1683. Journal entry of Cash purchase would
ing fixture be
C. glue used to build cabinets
A. debit purchase, credit sales
D. nails used to manufacture a table
B. debit purchase, credit cash
1679. STATEMENTS BELOW ARE THE USE OF
ENVIRONMENTAL COST, EXCEPT C. debit cash, credit purchase
A. prevent or reduce waste materials and D. debit purchase, credit bank
pollution
B. comply with environmental regula- 1684. Purchases return occurs when
tions and company policies
C. failure to comply with environmental
regulations and policies
D. to calculate the loss cause of environ-
ment damage
1680. When the accountant shows false infor-
mation in financial statement to lure the
investors it is known as
A. Mercantile Accounting
B. Window Dressing
A. Business sell goods to customers
C. Money Measurement Concept
B. Customers return goods to the busi-
ness
1681. Wages and salaries will be recorded in
C. Business return goods bought from
A. profit and loss account suppliers
B. balancesheet D. Customers return goods sold by busi-
C. Trading account debit side ness
D. trading account credit side
1685. Management accounting can be viewed
1682. Choose the correct option as
A. Marketing-oriented Accounting
B. Management-oriented Accounting
C. Accounting-oriented Management
D. Manager-oriented Accounting

1686. Summary of problems faced by PT IP in C. the timing of feedback is not depen-

determining pricing dent on the sophistication of the organi-
A. Prices are based on RKAP zation’s information technology
D. how critical the information is for suc-
B. Subholdingsasi
cess of the organization and the manage-
C. Business sector competency ment level receiving the feedback
D. Cost Behaviour
1691. Management Accounting (MA), to pro-
NARAYAN CHANGDER
1687. value of fixed assets will be recorded in vide information necessary for thedeci-
sions
A. balancdesheet liablity
A. to planning and controlling
B. balancesheet assets
B. related to cost analysis and reduction
C. profit and loss account
C. by analyzing expenses and revenue
D. trading account
D. All of the above
1688. Non-manufacturing cost includes
1692. Companies are incurring extra costs for
A. marketing cost providing work from home facilities to em-
B. general and administration costs ployees during the current pandemic. Iden-
tify whether these are controllable or non
C. factory rental controllable costs.
D. factory insurance A. Controllable
1689. I. Management Accounting-There are B. Non controllable
no regulations governing the reportII. C. Controllable or non controllable de-
Management Accounting-The reports are pends on the level of management author-
generally delayedIII. Financial Accounting- ity.
Caters all purpose reports.IV. Financial
D. none of above
Accounting-Precision is emphasized.
A. One of the above statements is correct 1693. When you start a new job, you fill out
a W-4 form to
B. Two of the above statements are cor-
rect A. determine how much your gross pay
should be.
C. Three of the above statements are cor-
rect B. file your tax return.
D. All of the given statements are correct. C. avoid paying income taxes on your pay-
checks.
1690. When managers set and measure target D. to determine how much income tax
levels of performance and feedback: your employer should withhold from your
A. the historical-cost-based accounting paychecks.
measures are usually adequate for eval-
uating economic returns on new invest- 1694. Surplus, i.e., Balance in Statement of
ments profit and loss is shown as
B. the historical-cost ROIs cannot be A. Share capital

used to evaluate current performance B. Reserves and surplus

C. Other long-term liabilities overhead of $113, 000 and 10, 900 total
D. Current liabilities direct labor-hours during the period. The
predetermined overhead rate is closest to:

1695. Retained profit This shows how much of A. $10.37
the net profit after interest and tax is kept
by the business for its own use, such as B. $12.10
reinvesting it in the company or to expand C. $11.10
the business. D. $11.30
A. TRUE
1701. The master budget reflects the impact of
B. FALSE operating decisions, but not financing deci-
1696. Decentralization is another form of or- sions.
ganizational structure that functions by A. True
delegating decision-making capabilities to B. False
multiple teams across geographies.
A. True 1702. Who is responsible for the budget?
B. False A. Accountants
B. Shareholders
1697. The statements are produced for exter-
nal users C. Investors
A. Financial Accounting D. Management
B. Management Accounting 1703. Accounting is referred to as the “lan-

guage of “
1698. If Assets are $17, 300 and Liabilities
are $6, 300, how much is Capital? A. Profit
A. $11, 000 B. Life
B. $17, 300 C. Accounting
C. $23, 600 D. Business
D. none of above 1704. The gross profitmightseem appealing,

but if the expensesare higher than the
1699. The objectives of Information in Man- gross profit, the business makes an over-
agement Accounting are all loss. Clearly, a business cannot survive
A. Fixing Responsibility for long without making any actual profit.
B. Measurement A. TRUE
C. Recording the Transactions B. FALSE
D. All the Above 1705. Repairs to premises
1700. Purves Corporation is using a predeter- A. Capital Expenditure
mined overhead rate that was based on B. Revenue Expenditure
estimated total fixed manufacturing over-
head of $121, 000 and 10, 000 direct 1706. Management accounting including finan-
labor-hours for the period. The company cial accounting; costing includes bookkeep-
incurred actual total fixed manufacturing ing

A. True A. Provision for tax

B. False B. Interest accrued but not due
1707. Name the item out of the following C. Employees’ provident fund
which is shown as short-term provision D. Interest accrued and due
NARAYAN CHANGDER

Management Accounting

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DESIGNED FOR SURE SUCCESS

JAI SHREE RAM

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It is my deepest gratitude and warmest

To my mother JOYTSNA CHANGDER

who has been a constant source of Knowledge and in-

The aim of this publication is to sup-

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B. gross profit 5. Which of these describes collateral?

D. sales B. something of value used to secure a

C. cost of goods sold 6. The main purpose of cost Accounting is to

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24. Information distribution management ac- C. (Standard hours-actual hours) x actual

29. Financial accounting: A. Material

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A. $1, 860 unfavorable D. Forensic accounting

B. $600 favorable 36. In marginal costing profitability of each

30. A 31. B 32. A 32. B 33. C 34. A 35. A 36. B

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D. none of above C. Is always produced using accounting

A. $10, 600 favorable B. bank

B. $10, 600 unfavorable C. capital

C. $13, 100 favorable D. working capital

D. $13, 100 unfavorable 53. Purchases return is

49. . A company is planning to purchase a

47. B 48. C 49. A 50. B 50. D 51. A 52. D 53. B 54. D

54. If break even point in Unit is 4, 800 units C. Fixed Budget

58. Choose the odd one out

55. C 56. C 57. C 58. C 59. A 60. C 61. C 62. B 63. C

B. Quantity/Total Cost B. Measurement

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D. Work in Progress A. Yes

76. Which of the following groups would be C. Both A and B

78. The purpose of accounting is to B. It is driven by rules

A. communicate information to inter- C. It is prepared for shareholders

83. According to Companies (Amendment) Act B. Priority Based Budgeting

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93. Which of the following is not relevant A. i and ii

C. journal 99. Integrity is an ethical requirement for all

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113. The management of sudharma Ltd the characteristics of their functional

A. Credit risk A. Analyzing the Rate of Return

B. Liquidity risk B. Helping Understand Performance Vari-

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123. To calculate an activity rate, the of C. reducing capital contributions

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D. value B. Contribution = Fixed Cost-Loss

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D. none of above A. law n care

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A. The break-even point will increase C. Surplus

152. Inventory ratio is a relationship between

A. Cost of goods purchased and cost of

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A. Monthly rent receieved C. Costs of Maintenance departments

B. Sales of fixed assets D. Costs of service departments

C. Discounts received 161. All of the following are advantages of im-

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