This quiz works best with JavaScript enabled. Home > Finance > Accounting > Management Accounting > Management Accounting – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Management Accounting Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Does the following transaction result in Change in Working Capital as per Funds flow statement?" Preliminary Expenses written Off" A) No. B) Yes. Show Answer Correct Answer: A) No. 2. Which of the following is least likely to be the problem associated with payback period? A) It does not consider whole project life. B) It is difficult to calculate in practical situations. C) It neglects the cash flows after payback period. D) It does not consider time value of money. Show Answer Correct Answer: B) It is difficult to calculate in practical situations. 3. Variable overhead costs can be managed by: A) Reducing the consumption of the cost-allocation base. B) Eliminating nonvalue-adding variable costs. C) Planning for appropriate capacity levels. D) Both A and B are correct. Show Answer Correct Answer: D) Both A and B are correct. 4. Which of the following groups would be least likely to receive detailed management accounting reports? A) Production supervisor. B) Sales head. C) Managers. D) Stockholder. Show Answer Correct Answer: D) Stockholder. 5. What is margin of safety if actual sales id Rs. 20, 000 and BEP sales 15, 000 A) 5000 units. B) 35, 000 units. C) Rs. 35, 000. D) Rs. 5000. Show Answer Correct Answer: D) Rs. 5000. 6. What is the difference between a loan and a grant? A) You have to pay back a grant but not a loan. B) You borrow money for a loan and pay money for a grant. C) There is no difference. D) You have to pay back a loan, but not a grant. Show Answer Correct Answer: D) You have to pay back a loan, but not a grant. 7. Management accounting is? A) Subjective. B) Objective. C) Both A and B. D) None of the above. Show Answer Correct Answer: A) Subjective. 8. Which of the following descriptors refers to management accounting information? A) It is verifiable and reliable. B) It is driven by rules. C) It is prepared for shareholders. D) It provides reasonable and timely estimates. Show Answer Correct Answer: D) It provides reasonable and timely estimates. 9. According to Companies (Amendment) Act 2000, a company limited by share canissue ..... kinds of shares. A) 1. B) 2. C) 3. D) None of above. Show Answer Correct Answer: B) 2. 10. Which type of loan does the gov't. pay the interest on while you are in school? A) A grant. B) Subsidized loan. C) Perkins loan. D) Unsubsidized loan. Show Answer Correct Answer: B) Subsidized loan. 11. The owner contributes her personal truck to the business A) Assets (NE). B) Liabilities (NE). C) Equity (D). D) None of above. Show Answer Correct Answer: B) Liabilities (NE). 12. Installation of new machinery A) Revenue Expenditure. B) Capital Expenditure. Show Answer Correct Answer: B) Capital Expenditure. 13. Which of the following could be a reason for a favorable material price variance? A) The purchasing manager bargaining effectively with suppliers. B) The purchasing manager giving orders for small quantity to reduce storage cost. C) The purchasing manager accepting a bid from the highest-priced supplier to ensure the quality of material. D) The personnel manager hiring under skilled workers. Show Answer Correct Answer: A) The purchasing manager bargaining effectively with suppliers. 14. If we start preparing a budget from scratch i.e with no account taken of the previous period's budget, this is known as A) Priority Based Budgeting. B) Zero Based Budgeting. C) Rolling Budgeting. D) Incremental budgeting. Show Answer Correct Answer: B) Zero Based Budgeting. 15. Operating ratio is ..... A) Cost of production / Net revenue from operations. B) Cost of the production + Operating expenses / Net revenue from operations. C) Cost of revenue from operation + Operating expenses / Net revenue from operations. D) Cost of revenue from operations + Selling expenses / Net revenue from operations. Show Answer Correct Answer: C) Cost of revenue from operation + Operating expenses / Net revenue from operations. 16. What is the cost unit for electricity cost? A) Kilowatt hours. B) Liters. C) Tons. D) None of above. Show Answer Correct Answer: A) Kilowatt hours. 17. If you sold a dresser and were paid with a check, and you took it and deposited it in the bank, this would be a ..... to your account. A) Transition. B) Credit. C) Balance. D) Debit. Show Answer Correct Answer: B) Credit. 18. Which of the following is not relevant which making further processing decision? A) Joint Cost. B) Further Processing Cost. C) Joint Cost and further processing cost. D) None of above. Show Answer Correct Answer: A) Joint Cost. 19. A list of activities accompanied by information that describes each activity is an activity ..... A) Journal. B) Manifesto. C) Diary. D) Dictionary. Show Answer Correct Answer: D) Dictionary. 20. Financial Accounting is used by Externals or Shareholders, meanwhile Management Accounting is used by Internal or Management. Is the difference between Financial Accounting and Management Accounting in terms of? A) Time Focus. B) Primary Users. C) Type of Information. D) Frequency. Show Answer Correct Answer: B) Primary Users. 21. I have 40 units of inventory that cost £3.00 (total £120) and I have just received 20 more at £3.60 per unit. What is the total number of units I have, and the total cost if I use the AVCO method of valuing inventory? A) 40 units @ £3.00 = £120. B) 60 units @ £3.60 = £216. C) 60 units @ £3.30 = £198. D) 60 units @ £3.20 = £192. Show Answer Correct Answer: D) 60 units @ £3.20 = £192. 22. Choose the various ways to start a business.i. Buying an existing businessii. Running a franchiseiii. Inheriting a family businessiv. Establishing a new business A) I and ii. B) Ii and iii. C) I, ii and iii. D) I, ii and iv. Show Answer Correct Answer: D) I, ii and iv. 23. Which of the following ratio measures short term solvency of a business? A) Solvency ratios. B) Activity ratios. C) Liquidity ratios. D) Profitability ratios. Show Answer Correct Answer: C) Liquidity ratios. 24. Integrity is an ethical requirement for all management accountants. One aspect of integrity requires A) Refraining from improper use inside information. B) Maintenance of an appropriate level of professional competence. C) Performance of professional duties in accordance with applicable laws. D) Avoidance of conflict of interest. Show Answer Correct Answer: D) Avoidance of conflict of interest. 25. If Selling price is 250 and desired profit is 50, then how much is target costing? A) 220. B) 200. C) 300. D) None of these. Show Answer Correct Answer: B) 200. 26. What do we call the amount of money (or income) that a company gets from its customers? A) Cashflow. B) Revenue. C) Salary. D) Profit. Show Answer Correct Answer: B) Revenue. 27. Which term of accounting is mainly concerned with the preparation of specific purpose financial statements for the management to base financial decisions on? A) Cost accounting. B) Auditing. C) Management Accounting. D) Financial accounting. E) Tax accounting. Show Answer Correct Answer: C) Management Accounting. 28. Companies may determine standards by evaluating their capacity to enable goal achievement, by listening to customers, by observing competitors or by benchmarking other companies. A) False. B) True. Show Answer Correct Answer: B) True. 29. The increase or decrease in the total cost of a production run for making one additional unit of an item is called ..... A) ABC costing. B) Marginal Costing. C) Sunk cost. D) Adsorption Costing. Show Answer Correct Answer: B) Marginal Costing. 30. The company repays the suppliers A) Assets (D). B) Liabilities (I). C) Equity (D). D) None of above. Show Answer Correct Answer: A) Assets (D). ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesManagement Accounting Quiz 1Management Accounting Quiz 2Management Accounting Quiz 4Management Accounting Quiz 5Management Accounting Quiz 6Management Accounting Quiz 7Management Accounting Quiz 8Management Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books