Managerial Accounting MCQ Set-8

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-8

111. ______________ is a person or item for which cost may be ascertained.

1. Cost unit
2. Cost centre
3. Cost object
4. Cost estimation

Correct answer: (B)
Cost centre

112. Which of the following is not a fixed asset?

1. Building
2. Bank Balance
3. Plant Patents
4. Goodwill

Correct answer: (B)
Bank Balance

113. 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

114. The reduction in the value of the fixed assets which can arise due to time factor is

1. Discount
2. Depreciation
3. Reduction
4. None of the above

Correct answer: (b)
Depreciation

115. Which of the following should not be called sales?

1. Good sold on credit
2. Office fixtures sold
3. Sale of item previously included in purchase
4. Good sold for cash

Correct answer: (B)
Office fixtures sold

116. Which of the following is not regarded as the fundamental accounting concept?

1. The going concern concept
2. The separate entity concept
3. The prudence (conservatism) concept
4. Correction concept

Correct answer: (D)
Correction concept

117. Outstanding salaries are shown as:

1. Added to Salaries while preparing P & La/c
2. Shown in liability side of Balance sheet under current Liability
3. (a) &(b) above
4. None of the above

Correct answer: (C)
(a) &(b) above

118. 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

119. Which of the following account balance will be shown on debit side of Trial Balance?

1. Outstanding expenses
2. Cash a/c
3. Short term loan
4. creditors

Correct answer: (D)
creditors

120. Cash Purchases:

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

Correct answer: (C)
Decreases assets

121. The practice of appending notes regarding contingent liabilities in accounting statements is in pursuance to:

1. Convention of consistency
2. Money measurement concept
3. Convention of conservatism
4. Convention of disclosure

Correct answer: (D)
Convention of disclosure

122. Sales are equal to:

1. Cost of goods sold + gross profit
2. Cost of goods sold – gross profit
3. Gross profit- Cost of goods sold
4. None of the above

Correct answer: (B)
Cost of goods sold + gross profit

123. Identify which is wrong rule

1. Nominal account- debit all expenses & losses
2. Real account- credit what comes in
3. Nominal account- credit all incomes & gains
4. Personal account- debit the receiver

Correct answer: (B)
Real account- credit what comes in

124. The work of factory employees that can be physically associated with converting raw material into finished goods is classified as-

1. Manufacturing overhead
2. Indirect materials
3. Indirect labour
4. Direct labour

Correct answer: (D)
Direct labour

125. ______________ cost will still be incurred although a plant is shut down temporarily.

1. Cost of raw material
2. Advertising
3. Depreciation
4. Carriage

Correct answer: (D)
Depreciation

KEY TAKEAWAYS Managerial Accounting MCQ set-8