Managerial Accounting MCQ Set-13

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.

Managerial Accounting MCQ Set-13

176. Lubricants, used regularly in a production process, are classified as

1. Miscellaneous expense
2. Direct materials
3. Indirect materials
4. Immaterial items

Correct answer: (C)
Indirect materials

177. Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

1. Direct materials, direct labor, and factory overhead.
2. Direct materials and direct labor only.
3. Direct materials, direct labor, factory overhead, and administrative overhead.
4. Direct labor and factory overhead.

Correct answer: (C)
Direct materials, direct labor, factory overhead, and administrative overhead.

178. Accounting principles are ______________ which are adopted by the accountant universally while recording accounting transaction.

1. Rules of action or conduct
2. Which u can change as per accountant
3. Which keep changing every year
4. None of these

Correct answer: (C)
Rules of action or conduct

179. Showing purchased office equipments in financial statements is the application of which accounting concept?

1. Historical cost convention
2. Materiality
3. Prudence
4. Matching concept

Correct answer: (B)
Materiality

180. Which of the following should not be called sales?

1. Good sold on credit
2. Office fixtures sold
3. Sale of item previously included in purchase
4. Good sold for cash

Correct answer: (A & B)
Good sold on credit & Office fixtures sold

181. Material concept tell about

1. Disclosure of loss
2. Disclosure of profit
3. Disclosure of all information which are important for investor
4. Disclosure of all information which are important for management

Correct answer: (C)
Disclosure of all information which are important for investor

182. Using “lower of cost and net realisable value(Market Value)” for the purpose of inventory valuation is the implementation of which of the following concepts?

1. The going concern concept
2. The separate entity concept
3. The prudence concept
4. Matching concept

Correct answer: (C)
The prudence concept

183. Which financial statement represents the accounting equation ASSETS = LIABILITIES + OWNER’S EQUITY

1. Income Statement
2. Cash Flow Statement
3. Balance Sheet
4. Fund Flow Statement

Correct answer: (C)
Balance Sheet

184. Cost accounting aims at ascertain ______________ of product

1. Cost
2. Net profit
3. Gross profit
4. Selling price

Correct answer: (A)
Cost

185. The purpose of financial accounts is reporting to

1. Management only
2. Government only
3. Investor only
4. All of these

Correct answer: (D)
All of these

186. Financial accounting use data

1. Projected data
2. External data only
3. Historic data
4. Manager data only

Correct answer: (C)
Historic data

187. What comes in is to be debited, what goes out is to be credited.

1. Rules of Personal
2. Rules of Real
3. Rules of Nominal
4. All of these

Correct answer: (C)
Rules of Nominal

188. Payment of salary is recorded by:

1. Debiting salary a/c; crediting cash a/c
2. Debiting cash a/c; crediting salary a/c
3. Debiting employee a/c; crediting cash a/c
4. Debiting employee a/c; crediting salary a/c

Correct answer: (A)
Debiting salary a/c; crediting cash a/c

189. Amortization of intangible Asset Such as Goodwill which has indefinite life is an example of accounting concept

1. Conservatism Concept
2. Continuity Concept
3. Realisation Concept
4. Measurement Concept

Correct answer: (A)
Conservatism Concept

190. ______________ cost refers to those cost which have already been incurred and cannot be altered by any decision in the future.

1. Opportunity cost
2. Sunk Cost
3. Incremental cost
4. Decremental cost

Correct answer: (B)
Sunk Cost

KEY TAKEAWAYS Managerial Accounting MCQ set-13