Management Accounting Set 6 MCQs

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.