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.

361. In a limited company which of the following are shown in the Appropriation Account?

1. (i) Debenture interest
2. (ii) Proposed dividend
3. (iii) Transfers to reserves
4. (iv) Directors’ remuneration

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

Correct answer: (C)
(ii) and (iii)

362. Which of the following is a liability?

1. Motor Vehicles
2. Machinery
3. Creditors for goods
4. Cash at Bank

Correct answer: (C)
Creditors for goods

363. Which of the following should not be called ‘Sales’?

1. Goods sold for cash
2. Sale of item previously included in ‘Purchases’
3. Office fixtures sold
4. Goods sold on credit

Correct answer: (C)
Office fixtures sold

364. What would have been the balance on the account of C De Freitas in MC17 on 19 May 20X5?

1. A credit balance of £445
2. A credit balance of £95
3. A credit balance of £265
4. A debit balance of £265

Correct answer: (D)
A debit balance of £265

365. Which of these best describes fixed assets?

1. Are bought to be used in the business
2. Are expensive items bought for the business
3. Are items which will not wear out quickly
4. Are of long life and are not bought specifically for resale

Correct answer: (D)
Are of long life and are not bought specifically for resale

366. Which of the following are personal accounts?

1. (i) Buildings
2. (ii) Wages
3. (iii) Debtors
4. (iv) Creditors

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

Correct answer: (D)
(iii) and (iv) only

367. Discounts received are:

1. Deducted by us when we pay our accounts
2. Deducted when we receive cash
3. Given by us when we sell goods on credit
4. None of these

Correct answer: (A)
Deducted by us when we pay our accounts

368. Entered in the Purchases Journal are:

1. Discounts received
2. Purchases invoices
3. Payments to suppliers
4. Trade discounts

Correct answer: (B)
Purchases invoices

369. A firm bought a machine for £3,200. It is to be depreciated at a rate of 25 per cent using the Reducing Balance Method. What would be the remaining book value after 2 years?

1. £2,400
2. £1,800
3. £1,600
4. Some other figure

Correct answer: (B)
£1,800

370. A Provision for Doubtful Debts is created:

1. When debtors cease to be in business
2. To provide for possible bad debts
3. When debtors become bankrupt
4. To write off bad debts

Correct answer: (B)
To provide for possible bad debts