Sri Vijay Vidyalaya College of arts and science

PG and Research department of commerce –nallampalli

ACCOUNTING FOR MANAGERIAL DECISION-ONE MARKS 2019

1. Management accounting maintains

(a) Journal (b) journal and ledger (c) ledger alone

(d) None of these

2. Management accounting helps management in

(a) Preparation of final accounts (b) Raising finance

(c) Filing tax returns (d) decision making

3. Management accounts analysis accounting data with the help of

(a) Tools and techniques (b) statutory forms

(c) Auditors (d) none of these

4. Basic objectives of management accounts is

(a) To ascertain profit or loss

(b) To settle disputes between management and workers

(c) To report to different levels of management on performance

(d) None of these

5. Management accounts is suitable for

(a) Small business (b) Cooperative societies

(c) Non profit organisations (d) large industrial and trading concerns

6. Management accounting uses primary data from financial accounting and...................

accounting

(a) cost (b) decision making (c) management (d) final accounts

7. Management accounting provides alternative choices for managerial.......................

(a) Demand (b) decision (c) supply (d) collateral

 8. Marginal costing is a .................used in management accounting for the purpose of
profit planning
(a) Decision (b) costing (c) techniques (d) auditors

9. Standard costing is a cost control .................. used in management accounting

(a) Analysis (b) methods (c) tools (d) initial starting

10. Capital budgeting is used in management accounting for the purpose of ranking
....................proposals.

(a) Objectives (b) scope (c) investment (d) net income

11. Financial statement analysis is extensively used in management accounting to assess

the............ of a business concern

(a) Performance (b) tangible (c) intangible (d) profit

12. A ratio is a................

(a) Journal entry (b) business transaction

(c) Relationship between two items (d) none of the above

13. A ratio is expressed in..................

(a) Rupees (b) weights (c) proportion (d) none of these

14. Ratio analysis involves the process of................

(a) Recording (b) computation (c) Relationship between two items

(d) None of the above

15. Earnings per share (EPS) is a..........................

(a) Profitability ratio (b) turnover ratio (c) liquidity ratio (d) none of these

16. Solvency ratio includes

(a) G/P ratio (b) fixed assets turnover ratio (c) capital gearing ratio

(d) P/E Ratio

17. The Liquid Ratio should be around.................

(a) 4 (b) 5 (c) 2 (d) 1

18. The ideal current ratio is.................

a) 5 b) 4 c) 3 d)2

19. The ‘Safe level ‘for proprietary ratio is .............

a) 0.50 b) 2 c) 1 d) 3

20. Solvency ratio indicates...........................

a) Profitability b) activity c) credit worthiness d) all the above

21. Current ratio indicates..............................

a) Ability to meet short term obligations b) Efficiency of management

c) Profitability d) none of these

22. Net worth refers to owners.......................

a) Cash b) activity c) funds d) profitability

23. EPS refers to net profit earned by a company per..........

a) Market b) share c) price d) quick

24. P/E is the relationship between the market ...................... of a company’s share and its
earnings per share

A) Price b) range c) liabilities d) assets

25. In current ratio, the numerator is current............

a) Assets b) cash c) funds d) share

26. In debt equity ratio, the term equity refers to the ................funds

A) Dividend b) shareholder c) debenture holder d) preference shareholder

27. Operating Ratio is a..............ratio

A) Reliability b) liability c) profitability d) responsibility

28. Liquid ratio is also called...................Ratio and also .............Ratio

a) Creditors turnover ratio b) debtors turnover ratio c) Quick: Acid test d) current ratio

29. in proprietary Ratio. The denominator is........................

a) Tangible assets b) intangible assets c) current assets d) fixed assets

30. In fixed assets turnover ratio, the numerator may be cost of goods sold or............

a) Payment b) sales c) purchase d) receipt

31. Working capital is the difference between current assets and current...........

a) Assets b) liabilities c) fund d) statement

32. The term ‘fund’ refers to

a) Reserves b) working capital c) profit

33. Gross working capital is the

a) Total value of current assets b) total value of fixed assets c) total value of all assets

34. Fund from operation is

a) Gross profit b) net profit c) operating profit d) none of these

35. Depreciation is

a) An external sources of funds b) an application funds c) a non fund item

36. Proposed dividend, if already reduced while ascertaining net profit, is

a) Added back to net profit to find funds from operation

b) To be reduced from net profit

c) Ignored while ascertaining funds from operation

37. Sale of fixed assets is

a) An item of fund from operation b) an external sources of fund

c) An application of funds

38. Short term investment is

a) Current assets b) current liability c) an application of funds

39. Payment o dividend is

a) An application of funds b) a sources of funds c) neither sources nor application

40. Income tax paid is application of funds

a)current liability b) current assets c)an application of funds

41. Funds inflow from operations is

a) An internal sources of funds b) an application of funds c) an external sources of funds

42. Purchase of fixed asset by issue of share is

a) Sources of funds b) application of funds c) an item to be ignored in funds flow

analysis

43. Issue of bonus shares out of reserves

a) Increases working capital b) decrease working capital

c) Does not affect working capital

44. Funds means.....................

a) Working b) a sources of funds c) neither sources nor application

45........................in current asset increase working capital

a) Payment b) sales c) purchase d) increases

46..................in current liability increase working capital

a) Decrease b) neither sources nor application c) a non fund item

47. Sale of fixed asset is a..................item.

a) Sources b) current assets c)an application of funds

48. Tax paid is a...............item

a) Application b) Sources c) neither sources nor application

49. Loss on sale of fixed assets is a.......................item.

a) Non fund b) neither sources nor application c) increases

50. Issue of debentures for cash is a ...............of fund

a) Sources b) current assets c) application

51. Purchase of long term investment is an..............of funds

a) Source b) current assets c) application

52. Redemption of preference share is an..................of funds

a) Source b) current assets c) application

53. Dividend received is a..............source of funds

A) External b) internal c) both internal and external

54. ‘Cash flows’ include

a) Cash receipts only b) cash payments c) cash receipts and payments

d) Cash and non-cash incomes and expenses

55. Cash from operating activities include

a) Cash from business activities b) cash from business activities and changes in current

Assets and liabilities c) sales on fixed assets d) borrowing from outside sources

56. Cash from investing activities arise from

a) Cash flows on the account of dealing in fixed assets and long term investment

b) Cash flows on the account of purchase and sale of the goods

c) Cash flows on account of short term investment

d) None of the above

57. Cash flows from financing activities arise from

a) Cash flows from purchase and sale of assets

b) Cash flows on the account of purchase and sale of the goods

c) Cash flow from the issue and redemption of shares and debentures and long term

Borrowings

d) None of the above

58. Dividend paid, under AS-3 is

A) Cash flow from financing activities b) Cash from investing activities

c) Cash from operating activities

59. Cash flows include cash inflows and cash.................

a) Outflows b) cash payments c) cash receipts and payments

60. Cash inflow from operating activities is a............of cash

a) Source b) current assets c) application

61. Cash outflow an account of operating activities is an......of cash

a) Source b) current assets and liabilities c) application

62. Increase in current assets...............cash and vice versa

a) Decrease b) neither sources nor application c) a non fund item

63. Increase in current liabilities...............cash and vice versa

A) Increases b) neither sources nor application c) a non fund item

64. Provision for tax is shown as part of................activities

a) Operating b) investing c) financial

65. Issue of shares result in..........inflow

a) Budget b) cash c) finance

66. Purchase of fixed assets is classified as.....................activities

a) Operating b) investing c) financial

67. Purchase of building by issue of debentures is a..........item and it is ignored in cash flow
statement

a) Cash b) non cash c) mere cash and non cash item

68. Cash flow statement usually starts with opening balance of cash and cash equitant and
......... and with the closing balance of cash and cash equivalent

a) Ends/finishes b) starts c) continuous

69. Standard costing is a........

a) Method of costing b) Technique for cost reduction c) cost control technique

70. Variance analysis involves

a) Dividing variance according to causes b) identifying gains in working c) fixed

responsibility for loss d) none of these

71. Material price variance is loss or gain

a) Due to using more or less material b) due to wastage of material c)due to payment of
higher or lower price than what is specified d) none of the above

72. Usually standards are set up on the basis of

a) Past performance b) ideal performance c) normal performance d) attainable high

performance

73. ‘Standard hour’ represents

a) Time taken by workers for production b) expected number of hours the factory should
work c) output of different kinds expressed in terms of hours.

74. Variance is the difference between standard cost and.......cost

a) Actual b) abnormal c) budgetary

75. Standard costing system is used along with.....control system, to be more effective.

a) Budgetary b) sales c) purchase

76. Material using variance shows the difference between the material permitted to be used
and actually used for the actual...............

a) Production or output b) sales c) both

77. Idle time variance represents the cost of......wastage of time,

a) Abnormal b) normal c) gain

78. Fixed overhead calendar variance reveals the.........due to working more or less
days/hours than those budgeted

a) Loss or gain b) profit c) gain

79. Budgeting is

a) a technique b) a method of costing c) maintaining ledger accounts d) none of these

80. Consumption of raw material is based on

a) Production b) sales c) cash d) market

81. Purchase budget refers to

a) Purchase of fixed assets and liabilities b) purchase of raw material c) purchase of

advertising and distribution materials d) purchase of office supplies

82. A production budget is based ob

A) Cash budget b) overhead budget c) sales budget d) purchase budget

83. A master budget is

a) Budget for assets and liabilities b) budget of profit or loss c) budget for managerial
remuneration d) budget for operations of the entire organisation

84. A flexible budget is

A) Budget for different capacity levels b) budget for different departments c) budget for
receipts and payment d) none of the above

85. Performance budget is

a) Laying down of objectives b) measurement of output in relation to input c) flexible

budget d) fixed budget

86. Zero base budgeting refers to

a) Short term and long term budgeting b) performance reporting c) responsibility

accounting d) justification of every item in the budget afresh

87. Control ratios are

A) Comparison of actual b) planning of activities c) financial performance measurement d)

none of these

90. Budgeting involves estimation of revenue and

a) Expenditure b) profit c) income

91. Sales budget is

a) Budget of output to be sold b) budget for selling expenses c) budget of revenue and
expenses d) a list of incentives to salesmen

92. ...................... budget is for different level of activity

a) Preference b) flexible c) profit d) income

93. Consumption of raw material is based on..............budget

A) Production b) sales c) both

94. Budgetary control involves comparison of budgets with..............

a) Preference b) actual c) equity

95. Sales and......... Budgets are inter linked

a)production b)budget c) profit

96. Actual performance may differ from.......................performance

a) Budgeted b) sales c) production

97. Cash budget is for............. and........... of cash

a) Receipts and payment b) goods and services c) bills and voucher

98. ZBB is....................budgeting

A) Zero based b) sales budget c) production budget

99. Capacity ratio indicates...........actually utilised

a) Budgeted time b) sales time c) purchase times d) production

100. Efficiency ratio shows the.........of efficiency attained during a period

a) Level b) rate c) voucher

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