Managerial Accounting MCQ Set-3

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-3

1. 31. The convention of disclosure implies that all material information should be
   1. Disclosed in the account
   2. Disclosed in the accounts which is required to owner
   3. Not disclosed
   4. None of these

   Correct answer: (A)
   Disclosed in the account

   32. Outstanding salary is shown as:
   1. An asset in the balance sheet
   2. A liability
   3. By adjusting it in the P & L a/c
   4. Both a and c above
   5. Both b and c above

   Correct answer: (E)
   Both b and c above

   33. Proprietor (owner) is treated as creditor of business due to:
   1. Periodicity concept
   2. Materiality Principle
   3. Entity Concept
   4. Consistency concept

   Correct answer: (C)
   Entity Concept

   34. Which of the following is correct
   1. Profit does not alter capital
   2. Capital can only come from profit
   3. Profit reduces capital
   4. Profit increases capital

   Correct answer: (D)
   Profit increases capital

   35. Interest , rent, electricity bill are types of account
   1. Personal a/c
   2. Impersonal a/c
   3. Real a/c
   4. Nominal a/c

   Correct answer: (D)
   Nominal a/c

   36. Cost of asset should always be equal to the cost of the liabilities. This concept is
   1. Double Entry Bookkeeping
   2. Matching Concept
   3. Consistency
   4. Money measurement Concept

   Correct answer: (B)
   Matching Concept

   37. P& l a/c is prepared for a period of one year by following:
   1. Consistency concept
   2. Conservatism concept
   3. Accounting period concept
   4. Cost Concept

   Correct answer: (C)
   Accounting period concept

   38. Prepaid expense is treated as
   1. Current asset
   2. Current liability
   3. Short term liability
   4. None of these

   Correct answer: (A)
   Current asset

   39. Which of the following is a liability?
   1. Loan from Mr.Y
   2. loan to Mr.y
   3. Both (a) (b)
   4. None of these

   Correct answer: (A)
   Loan from Mr.Y

   40. Advantages of cost accounting accrue:
   1. Only to workers
   2. Only to government
   3. Only to consumers
   4. To management, workers, consumers and government

   Correct answer: (D)
   To management, workers, consumers and government

   41. Marginal costing is concerned with:
   1. Fixed cost
   2. Variable cost
   3. Semi variable cost
   4. None of the above

   Correct answer: (B)
   Variable cost

   42. The books to be compulsorily maintained by a company are:
   1. Cash book and ledger
   2. Sales and purchase book
   3. Journal
   4. Both a and b
   5. All of a, b, c above

   Correct answer: (E)
   All of a, b, c above

   43. Which of the following best describes a trial balance?
   1. It is a list of balances on the books
   2. It is a special account
   3. Shows the financial position of a business
   4. Shows all the entries in the books

   Correct answer: (A)
   It is a list of balances on the books b) It is a special account

   44. Which of the following equation is related with Dual Aspect Concept ?
   1. Total Assets = Total Liabilities
   2. Total Assets = Capital + Outsider’s Liabilities
   3. Capital = Total Assets – Outsider’s Liabilities
   4. All of the above

   Correct answer: (D)
   All of the above

   45. The prime function of accounting is to
   1. To record economic data
   2. Provide the information basis of action
   3. Classifying and recording business transaction
   4. Attainmentofeconomic goal

   Correct answer: (C)
   Classifying and recording business transaction

KEY TAKEAWAYS Managerial Accounting MCQ set-3