Management Accounting Set 7 MCQs

Q1 | Which of the following matter is relevant with cash receipts and disbursement method ofpreparing Cash Budget ?

While determining the cash payments, it is necessary to estimate the credit sales.

While estimating cash receipts, it is not necessary to estimate the figure of credit sales.

Debtors Ratio is used to estimate the timings when cash collections would be obtained from credit sales.

While estimating the total amount of cash payment for purchases, it is necessary to decide from which suppliers materials are to be purchased.

Q2 | Budget period depends upon -

The type of budget

The nature of business

The length of trade cycles

All of the above

Q3 | Usually the production budget is stated in terms of -

Money

Quantity

Both (a) and (b)

None

Q4 | Recording of actual performance is -

An advantage of budgetary control

A step in budgetary control

A limitation of budgetary control

None of the above

Q5 | Budgetary control system helps the management to eliminate -

Undercapitalization

Overcapitalization

Both (a) and (b)

None

Q6 | Budgetary control facilitates easy introduction of the -

Marginal costing

Ratio analysis

Standard costing

Subjective matter

Q7 | Budgetary control system acts as a friend, philosopher and guide to the -

Management

Share holders

Creditors

Employees

Q8 | Budgetary control system defines the objectives and policies of the -

Production department

Finance department

Marketing department

Subjective matter

Q9 | A budget is tool which helps the management in planning and control of -

All business activities

Production activities

Purchase activities

Sales activities

Q10 | In responsibility centre, the output is called as -

Revenue

Cost

Both (a) and (b)

None

Q11 | If the responsibility centre gets more revenue from output, then it is called -

Investment centre

Cost centre

Profit centre

Expense centre

Q12 | Cost Unit is defined as -

Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed

A location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control.

Centres having the responsibility of generating and maximising profits

Centres concerned with earning an adequate return on investment

Q13 | Fixed cost is a cost -

Which changes in total in proportion to changes in output

Which is partly fixed and partly variable in relation to output

Which do not change in total during a given period despise changes in output

Which remains same for each unit of output

Q14 | Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking. -

can not

can

may or may not

must

Q15 | Element/s of Cost of a product are -

Material only

Labour only

Expenses only

Material, Labour and expenses

Q16 | Overhead refers to -

Direct or Prime Cost

All Indirect costs

Only Factory indirect costs

Only indirect expenses

Q17 | Which of the following is not a method of cost absorption?

Percentage of direct material cost

Machine hour rate

Labour hour rate

Repeated distribution method

Q18 | A Local Authority is preparing cash Budget for its refuse disposal department. Which ofthe following items would not be included in the cash budget?

Capital cost of a new collection vehicle

Depreciation of the machinery

Operatives wages

Fuel for the collection Vehicles

Q19 | Which of the following characteristics does NOT pertain to management accounting?

Provides information and estimates about future activity

Generates specific-purpose financial statements and reports

Provides financial and operating data multidisciplinary in scope

Has externally imposed standards

Q20 | A budget which is prepared in a manner so as to give the budgeted cost for any level ofactivity is known as -

Master budget

Zero base budget

Functional budget

Flexible budget

Q21 | ___________ is a summary of all functional budgets in a capsule form.

Functional Budget

Master Budget

Long Period Budget

Flexible Budget

Q22 | When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000,the P/V ratio is -

20%

30%

25%

40%

Q23 | From following which is not a principle of good reporting ?

Simplicity

Accountability

Promptness

Accuracy

Q24 | From day to day operation which report is prepare ?

Routine

Special

Investigative

External

Q25 | Any special event happen into the business then which report is prepared ?

Routine

Special

External

Control