Management Accounting Set 21 MCQs

Q1 | The form of balance sheet is

Vertical

Horizontal

Horizontal and vertical

Horizontal or vertical

Q2 | The term current asset doesn’t cover

Car

Debtors

Stock

Prepaid expenses

Q3 | A budgeting process which demands each manager to justify his entire budget in detail from beginning is

Functional budget

Master budget

Zero base budgeting

None of the above

Q4 | Match the columns(i) Activity Ratio -------------------- i) (Actual hours worked / Budgeted hours) * 100(ii) Capacity Ratio ------------------ ii) (Standard hours of actual production / Actual hours worked) * 100(iii) Efficiency Ratio ----------------- iii) (Standard hours for actual output / Budgeted hours) * 100

A-ii, B-iii, C-i

A-i, B-ii, C-iii

A-iii, B-i, C-ii

None of the above

Q5 | While preparing sales budget, which of the following factors are considered?

Non-operational factors

Environmental factors

Both a and b

None of the above

Q6 | _______ provides an estimate of the capital amount that may be required for buying fixed assets needed for meeting production requirements.

Production budget

Cash budget

Capital expenditure budget

None of the above

Q7 | Plant utilization budget and Manufacturing overhead budgets are types of

Production budget

Sales budget

Cost budget

None of the above

Q8 | _______ is designed after assessment of the volume of output to be produced during budgetperiod.

Cost budget

Sales budget

Production budget

None of the above

Q9 | ________ is the first step of budgetary system and all other budgets depends on it.

Cost budget

Sales budget

Production budget

None of the above

Q10 | _______also known as subsidiary budgets.

Master budget

Functional budget

Cost budget

None of the above

Q11 | _________ is stated as a budget which is made to change as per the levels of activity attained.

Fixed budget

Flexible budget

Both a and b

None of the above

Q12 | _______ is prepared for single level of activity and single set of business conditions.

Fixed budget

Flexible budget

Both a and b

None of the above

Q13 | The process of budgeting helps in the control of

Cost of production

Liquidity

Capital Expenditure

All of the above

Q14 | Which of the following statements are not true about budget, budgeting & budgetary control?

Budgetary control works on the basis of best option

Budget is one of the important mediums of communication

Budgeting develops the quality of objectivity in planning

None of the above

Q15 | Which of the following statements are true about responsibility accounting?

Responsibility accounting results in inter-departmental conflicts

In responsibility center more focus is paid on products, processes or jobs

No focus is paid on controlling costs

None of the above

Q16 | In profit center revenue represents a monetary measure of output emanating from a profitcenter in a given period irrespective whether

The revenue is realized or not

The output is sold or not

Both a and b

None of the above

Q17 | Contribution margin center is also known as

Expense center

Profit center

Investment center

(All of the above

Q18 | Which of the following is responsibility center?

Expense center

Profit center

Investment center

All of the above

Q19 | The responsibility centers, for control purposes, may be classified into _____ types.

Five

Three

Four

None of the above

Q20 | The area of focus on responsibility center is

Quantum of sales

Quantum of production

Optimum utilization of resources

All of the above

Q21 | In responsibility cost accounting the costs in focus are

Controllable costs

Uncontrollable costs

Both a and b

None of the above

Q22 | The term standard cost refers to the:

average unit cost of product produced in the previous period

budgeted unit cost of product produced in a particular period

average unit cost of product produced by other companies

average unit cost of product produced in the current period

Q23 | The sub-variance of material usage variance, known as Material mix variance 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 | Volume variance arises when

There is rise in overhead rate per hour

There is decline in overhead rate per hour

There is decrease or increase in actual output compared to the budgeted output

None of the above

Q25 | The corrective actions after the analysis of variances has to be taken by

Cost accountant

Management

Both a and b

None of the above