Managerial Accounting MCQ Set-20

How Managerial Accounting Works

Managerial accounting encompasses many facets of accounting aimed at improving the quality of information delivered to management about business operation metrics. Managerial accountants use information relating to the cost and sales revenue of goods and services generated by the company. Cost accounting is a large subset of managerial accounting that specifically focuses on capturing a company’s total costs of production by assessing the variable costs of each step of production, as well as fixed costs. It allows businesses to identify and reduce unnecessary spending and maximize profits.

331. Given figures showing: Sales £8,200; Opening stock £1,300; Closing stock £900; Purchases £6,400; Carriage inwards £200, the cost of goods sold figure is:

1. Another figure
2. £6,200
3. £6,800
4. £7,000

Correct answer: (D)
£7,000

332. When Lee makes out a cheque for £50 and sends it to Young, then Lee is known as:

1. The payee
2. The banker
3. The drawer
4. The creditor

Correct answer: (C)
The drawer

333. ‘Posting’ the transactions in bookkeeping means:

1. Making the second entry of a double entry transaction
2. Entering items in a cash book
3. Making the first entry of a double entry transaction
4. Something other than the above

Correct answer: (A)
Making the second entry of a double entry transaction

334. Given a purchases invoice showing 5 items of £80 each, less trade discount of 25 per cent and cash discount of 5 per cent, if paid within the credit period, your cheque would be made out for:

1. £260
2. £280
3. £285
4. None of these

Correct answer: (C)
£285

335. We originally sold 25 items at £12 each, less 331/3 per cent trade discount. Our customer now returns 4 of them to us. What is the amount of credit note to be issued?

1. £36
2. £30
3. £32
4. £48

Correct answer: (C)
£32

336. At the balance sheet date the balance on the Accumulated Provision for Depreciation Account is:

1. Transferred to Depreciation Account
2. Transferred to the Asset Account
3. Transferred to Profit and Loss Account
4. Simply deducted from the asset in the Balance Sheet

Correct answer: (D)
Simply deducted from the asset in the Balance Sheet

337. A credit balance brought down on a Rent Account means:

1. We have paid too little in rent
2. We have paid too much rent
3. We owe that rent at that date
4. We have paid that rent in advance at that date

Correct answer: (C)
We owe that rent at that date

338. Which of the following are not true? A Bank Reconciliation Statement is

1. (i) Part of the double entry system
2. (ii) Not part of the double entry system
3. (iii) Sent by the firm to the bank
4. (iv) Posted to the ledger accounts.

1. (i), (ii) and (iv)
2. (i), (iii) and (iv)
3. (i) and (ii)
4. (ii), (iii) and (iv)

Correct answer: (B)
(i), (iii) and (iv)

339. Which of the following do not affect trial balance agreement?

1. (i) Sales £105 to A Henry entered in P Henry’s account
2. (ii) Cheque payment of £134 for Motor expenses entered only in Cash Book
3. (iii) Purchases £440 from C Browne entered in both accounts as £404
4. (iv) Wages account added up incorrectly, being totaled £10 too much.

1. (i) and (iii)
2. (ii) and (iii)
3. (i) and (iv)
4. (iii) and (iv)

Correct answer: (A)
(i) and (iii)

340. What should happen if the balance on a Suspense Account is of a material amount?

1. Write it off to Profit and Loss Account
2. Should be written off to the balance sheet
3. Carry forward the balance to the next period
4. Find the error(s) before publishing the final accounts

Correct answer: (D)
Find the error(s) before publishing the final accounts