Accounting for Managers Online MCQ Set 11

QN01. Marginal costing is concerned with:

  1. Fixed cost
  2. Variable cost
  3. Semi variable cost
  4. None of the above
Answer

(B) Variable cost

QN02. 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
Answer

(E) All of a, b, c above

QN03. 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
Answer

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

QN04. 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
Answer

(D) All of the above

QN05. 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
Answer

(C) Classifying and recording business transaction

QN06. According to schedule VI Companies Act which item is not shown on Asset side of Balance sheet

  1. Investment
  2. Current Loan & Advances
  3. Provision
  4. Lease Holds
Answer

(C) Provision

QN07. Salary paid to factory manager is an item of:

  1. Prime cost
  2. Factory overhead
  3. Selling overhead
  4. Office overhead
Answer

(B) Factory overhead

QN08. Carriage outward is charged to

  1. Debit side Profit & Loss a/c
  2. Debit side Trading a/c
  3. Credit side of Profit & Loss a/c
  4. Credit side of trading a/c
Answer

(A) Debit side Profit & Loss a/c

QN09. 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
Answer

(C) Results in no change in the Total Assets

QN10. Accounting does not record non-financial transactions because of:

  1. Accrual concept
  2. Cost concept
  3. Continuity concept
  4. Money measurement concept
Answer

(D) Money measurement concept

QN11. Which one of the following is not an example of Intangible Assets?

  1. Patents
  2. Trade Marks
  3. Copyright
  4. Land
Answer

(D) Land

QN12. Creating provision against fluctuation in the price of investment is application of accounting concept

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

(A) Convention of conservatism

QN13. Debit what come in Credit what goes out rule for

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

(A) Real a/c

QN14. The following comments each relate to the recording of journal entries. Which statement is true?

  1. For any given journal entry, debits must exceed credits.
  2. It is customary to record credits on the left and debits on the right.
  3. The chart of accounts reveals the amount to debit and credit to the affected accounts.
  4. Journalization is the process of converting transactions and events into debit/credit format.
Answer

(D) Journalization is the process of converting transactions and events into debit/credit format.

QN15. Going concern concept assumes

  1. Business as a dissolving concern
  2. Business on relishing values
  3. Business as a going concern
  4. Asset = liability
Answer

(C) Business as a going concern

QN16. Management Accounting relates to

  1. Recording of accounting data
  2. Recording of cost data
  3. Presentation of account data
  4. None of the above
Answer

(C) Presentation of account data

QN17. Which items does not come under the balance sheet

  1. sales
  2. Share capital
  3. Reserves and surplus
  4. Unsecured loan
Answer

(A) sales

QN18. Which of the following is not related with Money Measurement Concept ?

  1. All business transaction should be expressed only in money
  2. The transactions which cannot be expressed in money, will not be recorded in accounting books
  3. Business is treated as separate from the proprietor
  4. None of These
Answer

(B) The transactions which cannot be expressed in money, will not be recorded in accounting books

QN19. Depreciation is a charge against

  1. Profit
  2. Assets
  3. Company
  4. Books of A/c
Answer

(A) Profit

QN20. Fixed assets and current assets are categorized as per concept of:

  1. Separate entity
  2. Going concern
  3. Consistency
  4. Time period
Answer

(B) Going concern

QN21. Management accounting is applicable to

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

(D) All of these

QN22. Insurance prepaid is shown as

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

(A) Current assets

QN23. 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
Answer

(C) Recording of day to day business transactions

QN24. Goods given as samples should be credited to:

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

(C) Purchase account

QN25. 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
Answer

(A) Asset side of Balance Sheet

QN26. Sales made to Mahesh for cash should be debited to

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

(A) Cash account

QN27. 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
Answer

(C) Deducted from capital account in the balance sheet

QN28. 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
Answer

(B) Rules of Real

QN29. Which of the following is not an example of real a/c:

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

(D) Creditor

QN30. 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
Answer

(C) Results in no change in the Total Assets

QN31. 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
Answer

(A) Water

QN32. 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
Answer

(C) Debit purchases a/c; credit A a/c

QN33. 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
Answer

(C) Results in no change in total assets

QN34. 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
Answer

(B) Posting

QN35. 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.
Answer

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

QN36. Cost accounting information can be used for:

  1. Budget control and evaluation.
  2. Determining standard costs and variances.
  3. Pricing and inventory valuation decisions.
  4. All of these
Answer

(D) All of these

QN37. Current liability does not include

  1. Sundry creditors
  2. Acceptances
  3. Unclaimed dividend
  4. Short term investment
Answer

(D) Short term investment

QN38. The term Management Accounting was first used in

  1. 1910
  2. 1939
  3. 1950
  4. 1960
Answer

(C) 1950

QN39. ______________ system records only actual cash receipts and payments

  1. Cash basis
  2. Accrual basis
  3. Mercantile basis
  4. Single entry basis
Answer

(A) Cash basis

QN40. Aggregate of direct costs is known as:

  1. Direct material costs
  2. Direct Wages
  3. Direct Expenses
  4. Prime Cost
Answer

(D) Prime Cost

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