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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Management Accounting Set 17

Q1 | Management accountancy is a structure for
  • Costing
  • Accounting
  • Decision making
  • Management
Q2 | The prime function of financial accounting is to
  • Classify and Record the economic data
  • To achieve non-economic goals
  • Provide information for control
  • None of the above.
Q3 | If net profit is ? 50,000 after writing off goodwill ? 10,000 then the Cash Flow from operating activities will be:
  • ? 60,000
  • ? 40,000
  • ? 50,000
  • ? 30,000
Q4 | Net Profit during the year ? 1,00,000Debtors in the beginning the year of ? 30,000Debtors at the end of the year ? 36,000What is the amount of Cash From Operating Activities?
  • ? 30,000
  • ? 94,000
  • ? 1,06,000
  • ? 1,66,000
Q5 | Net Profit during the year ? 30,000Creditors in the beginning ? 24,000Creditors at the end ? 16,000What is the amount of cash from operating activities?
  • ? 30,000
  • ? 34,000
  • ? 22,000
  • ? 40,000
Q6 | Financing Activities bring changes in
  • Size and composition of owner equities
  • Borrowing of the enterprise
  • Both a and b
  • None of the above
Q7 | For year 2018 Equity Share Capital is Rs 3,00,000 Preference Share Capital is Rs.1,00,000,10% debentures is Rs.2,00,000 and Share premium is Rs.30,000. For year 2019 Equity Share Capital is Rs 4,00,000 Preference Share Capital is Rs.60,000 10% debentures is Rs.1,00,000 and Share premium is 40,000. Also given, Dividend paid on shares Rs 15,000 and Interest paid on debentures Rs. 20,000. Determine net cash flow from financing activities.
  • Inflow of Rs 65,000
  • Outflow of Rs 65,000
  • Inflow of Rs 56,000
  • Outflow of Rs 56000
Q8 | Which of the following falls under Profitability Ratios? A) General Profitability ratios B) Overall Profitability ratios C) Comprehensive Profitability ratios
  • A and B
  • A and C
  • B and C
  • None of the above
Q9 | While calculating Gross Profit Ratio,
  • Closing stock is deducted from cost of goods sold
  • Closing stock is added to cost of goods sold
  • Closing stock is ignored
  • None of the above
Q10 | Gross Profit Ratio is calculated by
  • (Gross Profit/Gross sales)*100
  • (Gross Profit/Net sales)*100
  • (Net Profit/Gross sales)*100
  • None of the above
Q11 | Given Sales is Rs.2,40,000 and Gross Profit is 60,000, the Gross Profit Ratio is
  • 24%
  • 25%
  • 40%
  • 44%%
Q12 | If selling price is fixed 25% above the cost, the Gross Profit Ratio is
  • 13%
  • 28%
  • 26%
  • 20%
Q13 | Determine Stock Turnover Ratio if, Opening stock is Rs 31,000, Closing stock is Rs 29,000, Sales is Rs 3,20,000 and Gross profit ratio is 25% on sales.
  • 12 times
  • 11 times
  • 8 times
  • 10 times
Q14 | Which of the following is not included in quick assets?
  • Debtors
  • Stock
  • Cash at bank
  • Cash in hand
Q15 | Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs 60,000. Determine value of stock.
  • Rs 54,000
  • Rs 60,000
  • Rs 1, 62,000
  • None of the above
Q16 | A Current Ratio of Less than One means
  • Current Liabilities < Current Assets,
  • Fixed Assets > Current Assets,
  • Current Assets < Current Liabilities,
  • Share Capital > Current Assets.
Q17 | A firm has Capital of Rs. 10,00,000; Sales of Rs. 5,00,000; Gross Profit of Rs. 2,00,000 and Expenses of Rs. 1,00,000. What is the Net Profit Ratio?
  • 20%
  • 50%
  • 10%
  • 40%
Q18 | A Company has a material standard of 1 kg. per unit of output. Each kg. has a standard price of Rs.25 per kg. Company paid Rs.1,27,500 for 5000 kg., which they used to produce 4,700 units. What is the direct material price variance?
  • Rs.2,500 unfavourable
  • Rs.2,600 favourable
  • Rs.12,600 unfavourable
  • Rs.10,000 unfavourable
Q19 | Company has a material standard of 1.1 kg. per unit of output. Each kg. has a standard price of Rs.25 per. Company paid Rs.1,18,800? for 5,100 kg. which they used to produce 4,900 units. What is the direct materials quantity variance?
  • Rs.7,250 favourable
  • Rs.5,000 favourable
  • Rs.7,250 unfavourable
  • Rs.5,000 unfavourable
Q20 | A Company has a standard of 1 direct labor hour per unit at Rs.12 per hour. 3,850 labor hours costing Rs.46,970 were used to produce 4,000 units. Company’s labor price variance is
  • Rs.770 favourable
  • Rs.770 unfavourable
  • Rs.1,030 favourable
  • Rs.1,030 unfavourable
Q21 | A Company has a standard of 1 direct labor hour per unit at Rs.12 per hour. 3,850 labor hours costing Rs.46,970 were used to produce 4,000 units. Company’s labor quantity variance is
  • Rs.1,830 unfavourable
  • Rs.1,830 favourable
  • Rs.1,800 favourable
  • Rs.1,800 unfavourable
Q22 | A Company has a standard of 1 direct labor hour per unit at Rs.12 per hour. 3,850 labor hours costing Rs.46,970 were used to produce 4,000 units. Company’s total labor variance is
  • Rs.770 unfavourable
  • Rs.800 unfavourable
  • Rs.1,030 favourable
  • Rs.1,930 favourable
Q23 | Material cost variances is measured as
  • Total standard cost - Total actual cost
  • Standard cost of revised standard mix - Standard cost of actual mix
  • (Standard unit price - Actual unit price) * Actual quantity used
  • (Standard quantity - Actual quantity) * Unit standard price
Q24 | When the actual cost is less than the standard cost, the difference is termed as
  • Favourable variance
  • Adverse variance
  • Both a and b
  • None of the above
Q25 | The formula to estimate Labour Mix variance is
  • Total standard labour cost of actual output - Total actual cost of actual output
  • (Standard rate per hour - Actual rate per hour) * Actual Hours
  • (Revised standard time - Actual time) * Standard rate
  • Abnormal idle hours * Standard hourly rate