Managerial Accounting MCQ Set-18

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.

281. Life of security simply refer to

1. Yield
2. Liquidity
3. Maturity
4. Safety

Correct answer: (C)
Maturity

282. Ratio of present value of project’s future net cash flows to projects initial cash flow is

1. Profitability index
2. Internal rate of return
3. Net present value
4. Average rate of return

Correct answer: (A)
Profitability index

1. The ______________ is responsible for accounting, maintaining and auditing of the accounts.
2. Shareholders
3. Treasurer
4. Controller
5. Board of Directors

Correct answer: (C)
Controller

284. The financial ratio measured as EBIT/Interest expense is known as the firm’s

1. Profit margin
2. Return on assets
3. Interest coverage
4. Earnings before interest and taxes (EBIT)

Correct answer: (C)
Interest coverage

285. Fixed-based method is the subcategory of which of the following analysis.

1. Ratio analysis
2. Vertical analysis
3. Horizontal analysis
4. None of the above

Correct answer: (C)
Horizontal analysis

286. Which of the following best represents the total inventory costs, T, where S is total usage of the inventory item for the period, Q is the q

1. T = C (Q/2) + O (S/Q)
2. T = SQRT [2 (O) (S) / C]
3. T = SQRT [2 (C) (S) / O
4. T = C (S/Q) + O (Q/2)

Correct answer: (A)
T = C (Q/2) + O (S/Q)

287. Which of the following is NOT the present value of the bond?

1. Intrinsic value
2. Market price
3. Fair price
4. Theoretical price

Correct answer: (B)
Market price

288. ______________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.

1. Financial management
2. Profit maximization
3. Agency theory
4. Social responsibility

Correct answer: (A)
Financial management

289. Oliver Incorporated has a current ratio equal to 1.6 and a quick ratio equal to 1.2. The company has $2 million in sales and its current liabilities are $1 million. What is the company’s inventory turnover ratio?

1. 5.0
2. 5.2
3. 5.5
4. 6.0

Correct answer: (A)
5.0

290. Share and bonds floats in ______________

1. Money market
2. Capital market
3. Commercial bank
4. Equity market

Correct answer: (B)
Capital market