Managerial Accounting MCQ Set-9

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-9

126. According to which concept business is treated as a unit apart from owner

1. Dual concept
2. Divider concept
3. Entity concept
4. Landlord concept

Correct answer: (C)
Entity concept

127. Variable cost per unit

1. Remains fixed
2. Fluctuates with volume of production
3. Varies in consideration with the volume of sales
4. None of the above

Correct answer: (B)
Fluctuates with volume of production

128. Making the provision for doubtful debts and discount on debtors in anticipation of actual bad debts and discount is an example for which concept

1. Conservatism concept
2. Continuity concept
3. Realization concept
4. All of these

Correct answer: (A)
Conservatism concept

129. liabilities in balance sheet include the following items

1. Long term loan
2. Short term loan
3. Owner’s fund
4. All of these

Correct answer: (D)
All of these

130. Net profit is calculated in

1. Trading a/c
2. Balancesheet
3. Profit & loss a/c
4. Trial balance.

Correct answer: (C)
Profit & loss a/c

131. The going concern concept assumes that

1. The entity continue running for foreseeable future
2. The entity continue running until the end of accounting period
3. The entity will close its operating in 10 years
4. The entity can’t be liquidated

Correct answer: (A)
The entity continue running for foreseeable future

132. Accounting principles are divided into two types. These are ______________

1. Accounting Concepts
2. Accounting Conventions
3. Accounting Standards
4. Accounting Concepts &Accounting Conventions

Correct answer: (D)
Accounting Concepts &Accounting Conventions

133. Which expenses is a Capital Nature?

1. Depreciation
2. Wages
3. Salary
4. Stationary

Correct answer: (A)
Depreciation

134. The basic function of financial accounting is to

1. Record all business transaction
2. Interpret financial data
3. Assist the management in performing function effectively

Correct answer: (B)
Interpret financial data

135. Accounting principles are generally based on

1. Practicability
2. Subjectivity
3. Convenience in recording
4. None of these

Correct answer: (A)
Practicability

136. According to the money measurement concept the following will be recorded in the books of accounts of the business

1. Health of the managing director of the company
2. Quality of company goods
3. Value of plant and machinery
4. Health of labour in factory

Correct answer: (C)
Value of plant and machinery

137. In case of a debt becoming bad, the amount should be credited to

1. Debtors Accounts
2. Bad debts a/c
3. Sales a/c

Correct answer: (A)
Debtors Accounts

138. Accountant should follow the same principles of accounting continuously is as per which accounting convention

1. Convention of conservatism
2. Convention of full disclosure
3. Convention of consistency
4. None of these

Correct answer: (C)
Convention of consistency

139. A system in which accounting entries are made on the basis of amounts having become due for payment or receipt is called

1. Cash concept
2. Accrual concept
3. Matching concept
4. On-going concept

Correct answer: (B)
Accrual concept

140. Debit all expenses and losses Credit all gains and income.

1. Real a/c
2. Personal a/c
3. Nominal a/c
4. None of these

Correct answer: (C)
Nominal a/c

KEY TAKEAWAYS Managerial Accounting MCQ set-9