This quiz works best with JavaScript enabled. Home > Finance > Accounting > Management Accounting > Management Accounting – Quiz 27 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Management Accounting Quiz 27 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following describes a situation in which an employee prefers to exert less effort than the effort the owner desires because the employee's effort cannot be accurately monitored and enforced? A) Performance report variance. B) Goal incongruence. C) Incentive report variance. D) Moral hazard. Show Answer Correct Answer: D) Moral hazard. 2. Formula for liquid ratio= A) Quick assets/Current liabilities. B) Current assets/current liabilities. C) Current liabilities/current assets. D) None of above. Show Answer Correct Answer: A) Quick assets/Current liabilities. 3. When was the term Management Accounting coined? A) 1970. B) 1940. C) 1931. D) 1950. Show Answer Correct Answer: D) 1950. 4. Variable costs are costs that change in direct proportion to the production unit. All direct costs including direct materials, direct labour and direct expenses are variable costs. A) True. B) False. Show Answer Correct Answer: A) True. 5. Interest expense on loan from bank A) Capital Expenditure. B) Revenue Expenditure. Show Answer Correct Answer: B) Revenue Expenditure. 6. Financial Year of Nini Business expires June 30, 2018.Select the correct title for this income statement. A) Income Statement for the year ended June 30, 2018. B) Income Statement for the year ended July 1, 2017. C) The income statement ends June 30, 2018. D) Income Statement on July 1, 2017. Show Answer Correct Answer: A) Income Statement for the year ended June 30, 2018. 7. Which of the following are characteristics of B E P A) No loss and no profit. B) Total revenue is equal to total cost. C) Contribution is equal to fixed cost. D) All the above. Show Answer Correct Answer: D) All the above. 8. The financial risk affects an organization's ability to obtain ongoing financing. A) Financing risk. B) Market risk. C) Liquidity risk. D) Credit risk. Show Answer Correct Answer: A) Financing risk. 9. If the total cost of 1000 units is Rs.60000 and that of 1001 units is Rs.60400, then the increase of Rs.400 in the total cost is ..... A) Prime cost. B) All variable overheads. C) Marginal cost. D) None of the above. Show Answer Correct Answer: C) Marginal cost. 10. "The term used to describe the accounting methods, systems and techniques which, couple with special knowledge and ability, assist management in its task of maximising profit or minimising losses" is defined by ..... A) J.Batty. B) Hawkins. C) I.C.M.A. D) Kohler. Show Answer Correct Answer: A) J.Batty. 11. Cost units used in power sector is: A) Number of hours. B) Number of electric points. C) Kilowatt-hour (kWh). D) Kilo meter (K.M). Show Answer Correct Answer: C) Kilowatt-hour (kWh). 12. Working capital turnover ratio can be determined by A) Gross profit/ Working capital. B) Cost of goods sold / Net Sales. C) Cost of goods sold/ working capital. D) None of the above. Show Answer Correct Answer: C) Cost of goods sold/ working capital. 13. Competitiveness can be best measured by A) Sales margin. B) Income margin. C) Cost margin. D) Gross margin. Show Answer Correct Answer: D) Gross margin. 14. The amount of revenue required to earn a targeted profit is equal to A) Targeted profit divided by the variable cost ratio. B) Targeted profit divided by the contribution margin ratio. C) Total fixed cost divided by contribution margin. D) Total fixed cost plus targeted profit divided by contribution margin ratio. Show Answer Correct Answer: D) Total fixed cost plus targeted profit divided by contribution margin ratio. 15. A board of directors (BoD) is an elected group of individuals that represent shareholders. A) True. B) False. Show Answer Correct Answer: A) True. 16. The debtor turnover ratio is calculated as: A) Total Debtors / Average Credit Sales. B) Average Credit Sales / Total Debtors. C) Total Credit Sales / Average Debtors. D) Average Debtors / Total Credit Sales. Show Answer Correct Answer: C) Total Credit Sales / Average Debtors. 17. Earnings per share (EPS) is a A) Profitability Ratio. B) Turnover Ratio. C) Liquidity Ratio. D) None of these. Show Answer Correct Answer: A) Profitability Ratio. 18. Identify the expense below that does not have GST A) Electricity. B) Advertising. C) Insurance. D) Interest Expense. Show Answer Correct Answer: D) Interest Expense. 19. Which of the following is NOT capital expenditure for a T-Shirt factory? A) Shop Rent. B) Office Furniture. C) Purchasing Land. D) Purchasing Machinery. Show Answer Correct Answer: A) Shop Rent. 20. Income tax paid is A) Current liability. B) Current asset. C) An application of funds. D) None of these. Show Answer Correct Answer: C) An application of funds. 21. What is the decrease side of Supplies? A) Debit. B) Credit. Show Answer Correct Answer: B) Credit. 22. Which of the following statements is true of variable overhead costs? A) Variable overhead costs always have unused capacity. B) Variable overhead costs have no efficiency variance. C) Variable overhead costs have no production-volume variance. D) Variable overhead costs have no spending variance. Show Answer Correct Answer: C) Variable overhead costs have no production-volume variance. 23. Which is a liability of a business? A) Property tax paid in advance. B) Amount owing by debtors (Trade Receivables). C) Long term loan to employee. D) Amount owing to creditors (Trade Payables). Show Answer Correct Answer: D) Amount owing to creditors (Trade Payables). 24. EMA is primarily concerned with financial management and does not consider environmental aspects. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 25. The value chain is the sequence of business functions in which: A) Value is deducted from the products or services of an organization. B) Value is proportionately added to the products or services of an organization. C) Products and services are evaluated with respect to their value to the supply chain. D) Usefulness is added to the products or services of an organization. Show Answer Correct Answer: B) Value is proportionately added to the products or services of an organization. 26. Management accounting provides information needed by management. A) True. B) False. Show Answer Correct Answer: A) True. 27. Bowden Corporation used the following data to evaluate their current operating system. The company sells items for $ 20 each and used a budgeted selling price of $ 20 per unit. Actual Budgeted Units sold 46, 000 units 45, 000 units Variable costs $ 225, 400 $ 216, 000 Fixed costs $ 47, 500 $ 50, 000 What is the static-budget variance of revenues? A) $ 2, 000 unfavorable. B) $ 2, 000 favorable. C) $ 20, 000 favorable. D) $ 20, 000 unfavorable. Show Answer Correct Answer: C) $ 20, 000 favorable. 28. The P&L account shows the historical performance of a business. There is no guarantee that future performance is linked to past performance or success. A) LIMITATION OF P & L ACCOUNTS. B) BENEFIT OF P&L ACCOUNTS. Show Answer Correct Answer: A) LIMITATION OF P & L ACCOUNTS. 29. Which of the following should not be recorded in the income and expenditure account? A) Sale proceeds of furniture. B) Loss on sale of asset. C) Sales of old news papers. D) Honorarium paid to the secretary. Show Answer Correct Answer: A) Sale proceeds of furniture. 30. Items of value owned by a business are called: A) Owner's equity. B) Liabilities. C) Bonds. D) Assets. Show Answer Correct Answer: D) Assets. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesManagement Accounting Quiz 1Management Accounting Quiz 2Management Accounting Quiz 3Management Accounting Quiz 4Management Accounting Quiz 5Management Accounting Quiz 6Management Accounting Quiz 7Management Accounting Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books