Managerial Accounting MCQ Set-5

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-5

61. Management accounting is applicable to

1. Service entities
2. Manufacturing entities
3. Non profit entities
4. All of these

Correct answer: (D)
All of these

62. Insurance prepaid is shown as

1. Current assets
2. Current liabilities
3. Fixed asset
4. Fixed liability

Correct answer: (A)
Current assets

63. Financial accounting is concerned with

1. Recording of business expenses and revenue
2. Recording of costs of products and services
3. Recording of day to day business transactions
4. None of the above

Correct answer: (C)
Recording of day to day business transactions

64. Goods given as samples should be credited to:

1. Advertisement account
2. Sales account
3. Purchase account
4. None of the above

Correct answer: (C)
Purchase account

65. Investment of X company profit in shares of other company PQR Pvt. ltd are recorded in

1. Asset side of Balance Sheet
2. Liability side of Balance Sheet
3. Profit & Loss a/c
4. Not recorded in Balance Sheet

Correct answer: (A)
Asset side of Balance Sheet

66. Sales made to Mahesh for cash should be debited to

1. Cash account
2. Mahesh Account
3. Sales account
4. Purchase account

Correct answer: (A)
Cash account

67. Income tax paid by a sole proprietor on his business income should be:

1. Debited to trading account
2. Debited to profit and loss account
3. Deducted from capital account in the balance sheet
4. None of the above

Correct answer: (C)
Deducted from capital account in the balance sheet

68. What comes in is to be debited, what goes out is to be credited.

1. Rules of Personal
2. Rules of Real
3. Rules of Nominal
4. All of these

Correct answer: (B)
Rules of Real

69. Which of the following is not an example of real a/c:

1. Machinery
2. Building
3. Cash
4. Creditor

Correct answer: (D)
Creditor

70. Payment received from Debtor

1. Decreases the Total Assets
2. Increases the Total Assets
3. Results in no change in the Total Assets
4. Increases the Total Liabilities

Correct answer: (C)
Results in no change in the Total Assets

71. 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)
Water

72. Purchases of goods on credit from A is recorded as:

1. Debit purchases a/c; credit cash a/c
2. Debit A a/c; credit purchases a/c
3. Debit purchases a/c; credit A a/c
4. Debit A a/c; credit stock a/c

Correct answer: (C)
Debit purchases a/c; credit A a/c

73. Payment received from debtor:

1. Decreases the total assets
2. Increases the total assets
3. Results in no change in total assets
4. Increase the total liabilities

Correct answer: (C)
Results in no change in total assets

74. The transferring of debit and credit items from journal to the respective accounts in the ledger is called as

1. Ledger
2. Posting
3. Forward journal
4. None of these

Correct answer: (B)
Posting

75. The following comments all relate to the recording process. Which of these statements is correct?

1. The general ledger is a chronological record of transactions.
2. The general ledger is posted from transactions recorded in the general journal.
3. The trial balance provides the primary source document for recording transactions into the general journal.
4. Transposition is the transfer of information from the general journal to the general ledger.

Correct answer: (B)
The general ledger is posted from transactions recorded in the general journal.

KEY TAKEAWAYS Managerial Accounting MCQ set-5