This quiz works best with JavaScript enabled. Home > Finance > Accounting > Management Accounting > Management Accounting – Quiz 36 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Management Accounting Quiz 36 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Financial statements are the major means of communicating accounting information to interested parties. A) True. B) False. Show Answer Correct Answer: A) True. 2. 1) The flexible budget contains: A) Budgeted amounts for actual output. B) Actual costs for actual output. C) Static budget amounts for planned output. D) Actual costs for planned output. Show Answer Correct Answer: A) Budgeted amounts for actual output. 3. Participatory budgeting can involve A) Senior Manager. B) Junior Manager. C) Financial staff. D) Head of finance department. Show Answer Correct Answer: B) Junior Manager. 4. This involves the study and evaluation of long-term decision-making. A) Break-even point. B) Margin of Safety. C) Capital Investment Appraisal. D) None of above. Show Answer Correct Answer: C) Capital Investment Appraisal. 5. Cash flow statement in based upon A) Cash basis of accounting. B) Accrual basis of accounting. C) A and b both. D) None of these. Show Answer Correct Answer: A) Cash basis of accounting. 6. Have a right granted to an individual or group to market a company's goods or services within a certain territory or location.Identify the right term based on this statement. A) Partnership. B) Franchise. C) Public Limited. D) Sole proprietorship. Show Answer Correct Answer: B) Franchise. 7. Goods that have been started but are not complete are considered classified as which of the following? A) Finished goods inventory. B) Cost of goods sold. C) Direct materials inventory. D) Work in process. Show Answer Correct Answer: D) Work in process. 8. Owners equity just refer to the Capital of the owner A) False. B) True. Show Answer Correct Answer: B) True. 9. Which transaction is a capital receipt? A) Proceeds of sale of equipment. B) Cash received from sale of inventory. C) Bank interest received on deposits. D) Premises rent received from the tenant. Show Answer Correct Answer: A) Proceeds of sale of equipment. 10. What is the main purpose of the Cash Flow Statement? A) To assess liquidity and capital employed. B) To provide a basis for assessing the value of the business. C) To show how the business is financed and how funds are deployed. D) To present the sources and uses of cash. Show Answer Correct Answer: D) To present the sources and uses of cash. 11. Budgeting is a ..... A) Technique. B) Method of costing. C) Maintaining ledget accounts. D) None of these. Show Answer Correct Answer: A) Technique. 12. If there is a mistake with one of your bank accounts, who should you contact to resolve the issue? A) No one, you can't resolve the issue. B) Your financial institution. C) The local police station. D) The CFPB. Show Answer Correct Answer: B) Your financial institution. 13. Liquidity ratio measures A) Firm's ability to meet current obligations. B) Proportion of dent and equity in the financing. C) Firm's efficiency in utilizing the assets. D) Overall performance of the firem. Show Answer Correct Answer: A) Firm's ability to meet current obligations. 14. Babar is a wholesaler selling furniture to retailers. Which is a revenue receipt? A) Additional capital introduced to open a new furniture showroom. B) Mid-term loan from the bank for working capital purpose. C) Proceeds of sale of furniture at list price. D) Proceeds from sale of old office equipment at book value. Show Answer Correct Answer: C) Proceeds of sale of furniture at list price. 15. When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would be true? A) Work in Process will decrease. B) Gross margin will increase. C) Cost of Goods Sold will increase. D) Net income will decrease. Show Answer Correct Answer: B) Gross margin will increase. 16. The normal balance is always the side of the t account that increases. A) True. B) False. Show Answer Correct Answer: A) True. 17. Why does the owner of a business calculate profit? A) To find out how much he owes to creditors (trade payables). B) To reconcile the cash book balance with the balance on the bank statement. C) To know how much money may be taken as drawings without reducing capital. D) To find out how much debtors (trade receivables) owe him. Show Answer Correct Answer: C) To know how much money may be taken as drawings without reducing capital. 18. Which of the following words DOES NOT describe a main focus of management accounting? A) External. B) Control. C) Planning. D) Decision making. Show Answer Correct Answer: A) External. 19. Owner's drawing and expenses increase with a A) Credit. B) Debit. Show Answer Correct Answer: B) Debit. 20. System set up by federal gov't. to supervise and regulate member banks and to help banks serve the public efficiently. A) E-commerce banking system. B) Checks and balances system. C) Federal reserve system. D) None of the above. Show Answer Correct Answer: C) Federal reserve system. 21. Which of the following is not a basic feature of a financial accounting system? A) Subjective information. B) Disaggregate information. C) Both of the given choices. D) None of the given choices. Show Answer Correct Answer: C) Both of the given choices. 22. Net profit ratio shows the relation between net profit and ..... A) Sales return. B) Cost of sales. C) Gross Sales. D) Net sales. Show Answer Correct Answer: D) Net sales. 23. Comaprison of two or more departments or divisions belonging to the same firm with the objectives of making meaningful analysis for the purpose of increasing the efficiency of the departments ..... A) Department analysis. B) Ratio analysis. C) Inter firm comparison. D) Intra firm comparison. Show Answer Correct Answer: D) Intra firm comparison. 24. Fraud means an international misstatement of financial statements A) True. B) False. Show Answer Correct Answer: A) True. 25. Place the following steps from the five-step decision process in order:A = Obtain information including historical costsB = Evaluate performance to provide feedbackC = Make decisions choosing among alternativesD = Make predictions about the futureE = Identify the problem and uncertainties A) D, C, B, A, E. B) E, A, D, B, C. C) E, A, D, C, B. D) A, E, D, B, C. Show Answer Correct Answer: C) E, A, D, C, B. 26. Which is the tools of Management accounting? A) Budgetary Control. B) Standard Costing. C) Both the above. D) None of these. Show Answer Correct Answer: C) Both the above. 27. Benchmarking is a process: A) In which overhead costs are absorbed into units of output, or 'jobs'. B) In which a firm's performance levels are compared against the best levels of performance in competing companies or in companies having similar processes. C) Which is based on calculating the breakeven point and analyzing the consequences of changes in various factors calculating the breakeven point. D) In which the underlying processes of an organization is optimized using a systematic approach to achieve more efficient goals. Show Answer Correct Answer: B) In which a firm's performance levels are compared against the best levels of performance in competing companies or in companies having similar processes. 28. Which of the following explains the difficulty of setting-up EMA? A) Lack of environmental accounting standards. B) Many environmental costs and materials occur outside the organisation. C) Ecological issues are not yet known. D) None of the given answers. Show Answer Correct Answer: A) Lack of environmental accounting standards. 29. Conversion cost includes cost of converting ..... into ..... A) Raw material, Finished goods. B) WIP, Finished goods. C) Raw material, WIP. D) Finished goods, Saleable goods. Show Answer Correct Answer: A) Raw material, Finished goods. 30. The concept of "management by exception" requires management's A) Consideration of only those items which vary materially from plans. B) Consideration of rare events. C) Consideration of items selected random. D) None of the above. Show Answer Correct Answer: A) Consideration of only those items which vary materially from plans. ← 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