Managerial Accounting MCQ Set-2

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-2

1. 16. Financial information should be neutral and bias free” is the dictation of which one of the following?
   1. Completeness concept
   2. Faithful representation Concept
   3. Objectivity Concept
   4. Duality Concept

   Correct answer: (C)
   Objectivity Concept

   17. Which of the following statements is not an objective of financial reporting?
   1. Provide information that is useful in investment and credit decisions.
   2. Provide information regarding policy of organisation
   3. Provide information that is useful in assessing cash flow prospective
   4. None of theses

   Correct answer: (B)
   Provide information regarding policy of organisation

   18. A company’s telephone bill consisting of a Rs.200 monthly base amount, plus long distance charges, would be classified as a:
   1. Variable cost
   2. Committed fixed cost
   3. Direct cost
   4. Semi variable cost

   Correct answer: (D)
   Semi variable cost

   19. A book containing a chronological record of business transaction & original record
   1. Journal
   2. Ledger
   3. Trial balance
   4. None of these

   Correct answer: (A)
   Journal

   20. Which of these items would be accounted for as an expense?
   1. Repayment of bank Loan
   2. Dividend to stock holders
   3. The purchase of land
   4. Payment of current period rent

   Correct answer: (D)
   Payment of current period rent

   21. The amount of salary paid to Suresh should be debited to
   1. The account of Suresh
   2. Salaries a/c
   3. Cash a/c
   4. Bank a/c

   Correct answer: (B)
   Salaries a/c

   22. The cash discount allowed to a debtor should be credited to
   1. Discount a/c
   2. Customer a/c
   3. Sales a/c
   4. None of these

   Correct answer: (B)
   Customer a/c

   23. Accounting does not record non-financial transactions because of:
   1. Accrual concept
   2. Cost concept
   3. Continuity concept
   4. Money measurement concept

   Correct answer: (D)
   Money measurement concept

   24. The concept of separate entity is applicable to which of following types of businesses?
   1. Sole proprietorship
   2. Corporation
   3. Partnership
   4. All of them

   Correct answer: (D)
   All of them

   25. Accounting is the process of matching
   1. Benefits & Costs
   2. Revenues & Costs
   3. Cash Inflow & Cash Outflow
   4. Potential & Real Performance

   Correct answer: (B)
   Revenues & Costs

   26. The primary objective of cost accounting is
   1. Ascertain the cost of goods and services
   2. Ascertain the profit
   3. Presentation of all data
   4. None of these

   Correct answer: (A)
   Ascertain the cost of goods and services

   27. Of the following account types, which would be increased by a debit?
   1. Liabilities and expenses.
   2. Assets and equity.
   3. Assets and expenses.
   4. Equity and revenues.

   Correct answer: (C)
   Assets and expenses.

   28. Which of the following statements about differences between financial and managerial accounting is incorrect?
   1. Managerial accounting information is prepared primarily for external parties such as stockholders and creditors; financial accounting is directed at internal users.
   2. Financial accounting is aggregated; managerial accounting is focused on products and departments.
   3. Managerial accounting pertains to both past and future items; financial accounting focuses primarily on past transactions and events.
   4. Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors.

   Correct answer: (A)
   Managerial accounting information is prepared primarily for external parties such as stockholders and creditors; financial accounting is directed at internal users.

   29. Custom and traditions which guide the accountant while preparing the accounting statements
   1. Accounting convention
   2. Accounting concepts
   3. Accounting principles
   4. None of these

   Correct answer: (C)
   Accounting principles

   30. Balance Sheet is a statement of
   1. Assets
   2. Liabilities
   3. Capital
   4. All of these

   Correct answer: (D)
   All of these

KEY TAKEAWAYS Managerial Accounting MCQ set-2