Management Accounting Set 6
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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Management Accounting Set 6
Q1 | The subdivision of responsibility centre is -
- Expense centre
- Profit centre
- Investment centre
- All of the above
Q2 | The accounting department in an organization is -
- Investment centre
- Expense centre
- Profit centre
- All of the above
Q3 | What is the main advantage of responsibility accounting ?
- Improves performance
- It fixes responsibility
- Helpful in decision making
- All of the above
Q4 | The responsibility accounting is a system by which the responsibility is assigned to theconcerned persons -
- To increase sales
- To control cash
- To increase production
- All of the above
Q5 | The contribution of accounting department in an organization -
- Cannot be measured in monetary terms
- Can be measured in monetary terms
- May or may not be measured in monetary terms
- None of the above
Q6 | According to responsibility accounting, the entire organization is divided into various -
- Business centre
- Profit centre
- Responsibility centre
- None of the above
Q7 | It may not be ______ to measure exactly the output of service departments in anorganization.
- Feasible
- Necessary
- Either (a) or (b)
- None of these
Q8 | Internal transfer of process at profit _________ of the company.
- Will not increase the asset
- Will increase the asset
- Can’t say
- Inadequate information
Q9 | The success of budgetary control system depends upon the willing cooperation of ….…
- Shareholders
- Management
- Creditors
- All the functional areas of management
Q10 | A key factor is one which restricts ……
- The volume of production
- The volume of sales
- The volume of purchase
- All of the above
Q11 | The classification of fixed and variable cost is useful for the preparation of ……
- Master budget
- Flexible budget
- Cash budget
- Capital budget
Q12 | In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’sprice is below the firm’s own ___________.
- Fixed Cost
- Variable Cost
- Total Cost
- Prime Cost
Q13 | __________ is a detailed budget of cash receipts and cash expenditure incorporatingboth revenue and capital items.
- Cash Budget
- Capital Expenditure Budget
- Sales Budget
- Overhead Budget
Q14 | Sunk costs are __________.
- Relevant for decision making
- Not relevant for decision making
- Cost to be incurred in future
- Future costs
Q15 | Abnormal cost is the cost ___________.
- Cost normally incurred at a given level of output
- Cost not normally incurred at a given level of output
- Cost which is charged to customer
- Cost which is included in the cost of the product
Q16 | Responsibility Centre can be categorised into ___________.
- Cost Centres only
- Profit Centres only
- Investment Centres only
- All of the above
Q17 | A profit centre is a centre ___________.
- Where the manager has the responsibility of generating and maximising profits
- Which is concerned with earning an adequate Return on Investment
- Both (a) and (b)
- Which manages cost
Q18 | Management Accounting is and financial accounting differ in that managementaccounting information is prepared –
- Following prescribed rules
- Using whatever methods the company finds beneficial
- For shareholders
- To summarize the whole company with little detail
Q19 | Purpose of Management Accounting is to –
- Past orientation
- Help banks make decisions
- Help managers make decisions
- Help investors make decisions
Q20 | Management Accounting is the branch of accounting concerned with reporting to –
- Internal Managers
- Shareholders
- The Government
- Bankers
Q21 | Which of the following does NOT describe management accounting?
- Evaluation of segments or products within the firm
- Emphasis on the future
- Externally focused
- Detailed information
Q22 | Management accounting reports are prepared
- To meet the needs of decision makers within the firm
- Whenever shareholders request them
- According to guidelines prepared by the shares and Financial Services Authority
- According to financial accounting standards
Q23 | Management accounting is primarily concerned with -
- Providing investors with useful information for valuing securities.
- Providing creditors information on the status of their loans.
- Providing managers with relevant information to help achieve organizational goals.
- Providing the relevant taxation authorities with information to determine the amount
Q24 | Which matters are taken into consideration while preparing production budget ?
- The estimate of the number of units to be produced during the budget period.
- Estimate of number of units to be sold.
- Policy regarding the wage fixation for labourers.
- Policy regarding the selection of suppliers from whom materials would be purchased.
Q25 | Which of the following matter is to be taken into account which preparing MaterialPurchase Budget ?
- The supplier from whom materials are to be purchased.
- The procedure of storing and preserving materials after they are received.
- The prices at which receipts and issues of materials are to be recorded in stores ledger.
- The maximum and minimum quantities of materials to be purchased.