Q1.

The term management accounting was first coined in

a)1950

b) 1945

c) 1955

d) 1960

Answer: A

Q.2 The purpose of management accounting is to

a). Help banks make decisions

b). Past orientation

c). Help investors make decision

d). Help managers make decisions

Answer: D

Q.3 The correct order of process of establishing the standards, is

a). Decision about types of standards to be used, Study of technical details, Study of existing
costing system

b). Study of existing costing system, Study of technical details, Decision about types of standards
to be used

c). Study of technical details, Study of existing costing system, Decision about types of standards
to be used

d). None of the above

Answer: C

Q4. Management accounting assists the management

a) In planning, direction and control

b) Only in planning

c) Only in direction
d) Only in control

Answer: A

Q5. Which of the following are tools of management accounting?

A) Standard costing

B) Decision accounting

C) Human Resources Accounting

D) Budgetary control

a) A, C and D

b) A, B and D

c) A, B , C, D

d) A, B and C

Answer: b) A, B and D

Q6. The concept of management accounting was coined by?

a) R.N Anthony

b) J. Batty

c) James H. Bliss

d) American Accounting Association

Answer: C

Q.7 An accounting approach, in which the expected benefits exceed the expected cost is
classified as

a) cost-benefit approach

b) benefit approach

c) cost approach

d) accounting approach
Answer: A

Q8. Management accounting deals with

a) Qualitative information

b) Quantitative information

c) None of the above

d) Both a and b

Answer: D

Q9. Decisions regarding usage of material, kind and changes in plant processing are a part
of

a) help management

b) future management

c) cost management

d) past management

Answer: C

Q.10 In management accounting, an emphasis and focus must be

a) past oriented

b) future oriented

c) bank oriented

d) communication oriented

Answer: B

Question 1

Business is said to be in a profit when

A) Expenditure exceeds income

B) Income exceeds expenditure

D) Assets exceed expenditure

Answer: B

Question 2

As per the accounting double-entry system, an account that receives the benefit is

A) No need to show as an accounting record

B) Income

C) Debit

D) Credit

Answer: D

Question 3

What does the term “credit” mean in business?

A) It depends upon items

B) Provides benefits

C) It has no effect on business

D) Receiving benefits

Answer: D

Question 4

When a Liability is decreased or reduced, it is registered on the

A) Debit side or left side of the account

B) Credit side or right side of the account

C) Debit side or right side of the account

D) Credit side or left side of the account

Question 5

When there is an increase in capital by an amount, it is registered on the

A) Credit or right side of the account

B) Debit or left side of the account

C) Credit or left side of the account

D) Debit or right side of the account

Answer: A

Question 6

What kind of expenses are paid from Gross Profit?

A) Selling Expenses

B) Financial Expenses

C) General Expenses

D) All of the above

Answer: D

Question 7

Which option gives a review report on the firm’s financial status at a specified date?

A) Income & Expenditure Account

B) Balance Sheet

C) Cash Flow Statement

D) Profit & Loss Account

Answer: B

Question 8
Which of the options is not an intangible asset?

A) Land

B) Patents

C) Goodwill

D) Franchise rights

Answer: A

Question 9

Which of the options is an example of business liability?

A) Creditors

B) Cash

C) Building

D) Land

Answer: A

Question 10

The unfavourable balance of Profit and Loss account should be

A) Subtracted from liabilities

B) Subtracted from capital

C) Subtracted from current assets

D) Added in liabilities

1. Investment can be defined.

A) Person’s dedication to purchasing a house or flat

B) Use of capital on assets to receive returns

C) Usage of money on a production process of products and services

Answer: B

2. The concept of Financial management is.

A) Profit maximization

B) All features of obtaining and using financial resources for company operations

C) Organization of funds

D) Effective Management of every company

Answer: B

3. What is the primary goal of financial management?

A) To minimise the risk

B) To maximise the owner’s wealth

C) To maximise the return

D) To raise profit

Answer: B

4. GST is a consumption of goods and service tax based on.

A) Development

B) Dividend

C) Destiny

D) Duration

E) Destination

Answer: E

5. The finance manager is accountable for.

A) Earning capital assets of the company

C) Arrangement of financial resources

D) Proper utilisation of funds

Answer: C

6. The market value of a share is responsible for.

A) The investment market

B) The government

C) Shareholders

D) The respective companies

Answer: A

7. The capital budget is associated with.

A) Long terms and short terms assets

B) Fixed assets

C) Long terms assets

D) Short term assets

Answer: C

8. CAPM stands for.

A) Capital asset pricing model.

B) Capital amount printing model.

C) Capital amount pricing model.

D) Capital asset printing model.

Answer: A

9. What does financial leverage measure?

B) The sensibility of EBIT with % change with respect to output

C) The sensibility of EPS with % change in the EBIT level

D) % variation in the level of production

Answer: C

10. From the below-mentioned items which are financial assets?

A) Machines

B) Bonds

C) Stocks

D) B and C

Answer: B

1. Statement of cash flows includes

A) Financing Activities

B) Operating Activities

C) Investing Activities

D) All of the Above

Answer: D

2. In cash flows, when a company invests in fixed assets and short-term financial investments
results in

A) Increased Equity

B) Increased Liabilities

C) Decreased Cash

D) Increased Cash

Answer: C
3. A company that issues stocks and bonds to raise funds results in

A) Decrease in Cash

B) Increase in Cash

C) Increase in  Equity

D) Increase in Liabilities

Answer: B

4. The purchase value of assets over its serviceable life is categorised as

A) Appreciated Liabilities

B) Appreciated Assets

C) Depreciation

D) Appreciation

Answer: C

5. The basic financial statements include

A) Statement of Cash Flows

B) Statement of Retained Earnings

C) Balance Sheet and Income Statement

D) All of the Above

Answer: D

6. The statement of cash flow clarifies cash flows according to

A) Operating and Non-operating Flows

B) Inflow and Outflow

C) Investing and Non-operating Flows

D) Operating, Investing, and Financing Activities

7. Cash flow example from a financing activity is

A) Payment of Dividends

B) Receipt of Dividend on Investment

C) Cash Received from Customers

D) Purchase of Fixed Asset

Answer: A

8. Cash flow example from an investing activity is

A) Issue of Debenture

B) Repayment of Long-term Loan

C) Purchase of Raw Materials for Cash

D) Sale of Investment by Non-Financial Enterprise

Answer: D

9. Cash flow example from an operating activity is

A) Purchase of Own Debenture

B) Sale of Fixed Assets

C) Interest Paid on Term-deposits by a Bank

D) Issue of Equity Share Capital

Answer: C

10. Which item comes under financial activities in cash flow?

A) Redemption of Preference Share

B) Issue of Preference Share

C) Interest Paid
D) All the above

Answer: D

1. Trial balance is used to check the accuracy of

A) Balance sheet balances

B) Ledger accounts balances

C) Cash flow statement balances

D) Income statement balances

Answer: B

2. In the books of account if a transaction is completely deleted, will it affect the trial balance?

A) No

B) Yes

C) A transaction cannot be omitted

Answer: A

3. What is used in preparing trial balance?

A) Specialised Journals

B) Balance Sheet

C) Ledger Accounts

D) General Journal

Answer: C

4. What is the trial balance used?

A) It is a financial statement

B) It records balances of a balance sheet

C) It doesn’t contribute to the accounting cycle

Answer: D

5. When debit balance is equal to credit balance then the trial balance means

A) Account balances are correct

B) Mathematically Capital+Liabilities=Assets

C) No mistake in recording transactions

D) No mistake in posting entries to ledger accounts

Answer: B

6. When is trial balance prepared?

A) At the end of an accounting period

B) At the end of a year

C) Frequently during the year

D) At the end of a month

Answer: A

7. Which items influence the trial balance agreement?

A) Deposit in transit

B) Compensating errors

C) Complete omission of a transaction

D) Partial omission of a transaction

Answer: D

8. When credit balances = debit balances, the trial balance check and shows ____________ . It
also indicates that there were no errors made during posting and recording and posting.

A) Understatements of Balances

B) Errors of Commission
C) Arithmetic Accuracy

D) Omissions of Economic Events

Answer: C

9. Which of the following account with normal balance is shown at the debit side of a trial
balance?

A) Creditors account

B) Unearned income account

C) Rent income account

D) Cash account

Answer: D

10. In trial balance, which accounts with normal balance is recorded at the credit side?

A) Bank account

B) Equipment account

C) Cash account

D) Accrued expenses account

Answer: D