Managerial Accounting MCQ Set-19

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.

321. Net present value ______________.

1. Is equal to the initial investment in a project
2. Is equal to the present value of the project benefits
3. Is equal to zero when the discount rate used is equal to the IRR
4. Is simplified by the fact that future cash flows are easy to estimate

Correct answer: (B)
Is equal to the present value of the project benefits

322. Profit maximization is a

1. Short term concept
2. Long term concept
3. Both a & b
4. None

Correct answer: (A)
Short term concept

323. Which of the following is the variability of return on stocks or portfolios associated with changes in return on the market as a whole?

1. Systematic risk
2. Standard deviation
3. Unsystematic risk
4. Coefficient of variation

Correct answer: (A)
Systematic risk

324. When the bond approaches its maturity, the market value of the bond approaches to which of the following?

1. Intrinsic value
2. Book value
3. Par value
4. Historic cost

Correct answer: (A)
Intrinsic value

325. Bonds are hybrid of

1. Annuity due + Lumpsum amount
2. Ordinary annuity + Lumpsum amount
3. Annuity due + Ordinary annuity
4. Perpetuity + Lumpsum amount

Correct answer: (B)
Ordinary annuity + Lumpsum amount

326. Which one of the following can issue the corporate bond?

1. Individuals
2. Government
3. Public limited companies
4. All of before

Correct answer: (C)
Public limited companies

327. A Bond that pays no interest payments and sells at a deep discount is called

1. Bond
2. Zero Coupon
3. Convertible
4. Tax-free

Correct answer: (B)
Zero Coupon

328. Which of the following statements is incorrect?

1. Assets – Capital = Liabilities
2. Liabilities + Assets = Capital
3. Liabilities + Capital = Assets
4. Assets – Liabilities = Capital

Correct answer: (B)
Liabilities + Assets = Capital

329. Given the following, what is the amount of Capital? Assets: Premises £20,000; Stock £8,500; Cash £100. Liabilities: Creditors £3,000; Loan from A Adams £4,000

1. £21,100
2. £21,400
3. £21,600
4. £32,400

Correct answer: (C)
£21,600

330. To find the value of closing stock at the end of a period we

1. do this by stocktaking
2. deduct cost of goods sold from sales
3. deduct opening stock from cost of goods sold
4. look in the stock account

Correct answer: (A)
do this by stocktaking

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