Accounting for Managers Online MCQ Set 12

QN01. Sunk costs are:

1. relevant for decision making
2. Not relevant for decision making
3. cost to be incurred in future
4. future costs

Answer

(B) Not relevant for decision making

QN02. Information about an item is ______________ if its omission or misstatement might influence the financial decision of the users taken on the basis of that information

1. Concrete
2. Complete
3. Immaterial
4. Material

Answer

(D) Material

QN03. Proposed dividends” is shown in the Balance Sheet of a company under the head:

1. Provisions
2. Reserves and Surplus
3. Current Liabilities
4. Other Liabilities

Answer

(A) Provisions

QN04. Authorized capital, also known as

1. ominal capital
2. Paid up capital
3. Issues capital
4. None of these

Answer

(A) Nominal capital

QN05. Trade Payables are recorded in ______________

1. Asset side of B/S
2. Liability side of B/S
3. P & L a/c
4. None of the above

Answer

(B) Liability side of B/S

QN06. Cost accounting emerged mainly on account of:

1. Statutory requirements
2. Competition in the market
3. Labour unrest
4. Limitations of financial accounting

Answer

(D) Limitations of financial accounting

QN07. Rent paid to landlord should be credited to

1. Landlords account
2. Rent account
3. Cash account
4. Expense account

Answer

(C) Cash account

QN08. The primary objective of management accounting is

1. Prepare final a/c
2. Provide management complete and true information
3. Both (a) & (b)
4. None of these

Answer

(B) Provide management complete and true information

QN09. Cost of goods sold= opening stock+ net purchases+ expenses on Purchases – sales Which part of formula is wrong?

1. opening stock
2. net purchases
3. expenses on Purchases
4. sales

Answer

(D) sales

QN10. Interest on drawings is:

1. Expenditure for the business
2. Cost for the business
3. Gain for the business
4. None of the above

Answer

(C) Gain for the business

QN11. The basic concepts related to p& l a/c are:

1. Realization Concept
2. Matching Concept
3. Cost Concept
4. Both a and b above

Answer

(D) Both a and b above

QN12. All those to whom business owes money are:

1. Debtors
2. Investors
3. Creditors
4. Shareholders

Answer

(C) Creditors

QN13. All direct & indirect expenses related to business are charged:

1. Profit and loss account
2. Trading account
3. Trading account Profit and Loss account
4. Directly to Balance sheet

Answer

(C) Trading account Profit and Loss account

QN14. If loan have been guaranteed by managers and directors is called as

1. Loan
2. Unsecured Loan
3. Secured Loan
4. Advance by Manager & director

Answer

(C) Secured Loan

QN15. Opening stock + ______________ + Direct Expenses (Carriage on Raw material)-Closing Stock = ______________

1. Sales, Purchases
2. Sales, Sales return
3. Purchases, Cost of goods produced
4. Purchases, Cost of goods sold

Answer

(C) Purchases, Cost of goods produced

QN16. 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

QN17. Credit balance of profit & loss a/c shown on

1. Asset side of balance sheet
2. Liability side of balance sheet
3. Not shown in balance sheet
4. Half on asset side and half on liability side

Answer

(B) Liability side of balance sheet

QN18. Outstanding expenses are charged to

1. Asset side of balance sheet
2. Liability side of balance sheet
3. Not charged to balance sheet
4. None of these

Answer

(B) Liability side of balance sheet

QN19. 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) Loan from Mr.Y

QN20. The revenue recognition principal dictates that all types of incomes should be recorded or recognized when

1. Cash is received
2. At the end of accounting period
3. When they are earned
4. When interest is paid

Answer

(C) When they are earned

QN21. Which of the following is time span into which the total life of a business is divided for the purpose of preparing financial statements?

1. Fiscal year
2. Calendar year
3. Accounting period
4. Accrual period

Answer

(C) Accounting period

QN22. If the total assets of the company amount to Rs 1,50,000 and owner’s equity is Rs 70,000,the amount of liabilities will be

1. Rs 70,000
2. Rs 80,000
3. Rs 90,000
4. Rs 1,00,000

Answer

(B) Rs 80,000

QN23. The system of recording transaction based on dual aspect concept is called

1. Double account system
2. Double entry system
3. Single entry system
4. None of these

Answer

(B) Double entry system

QN24. The convention of conservatism is applicable

1. In providing for discount on creditors
2. In making provision for bad doubtful debts
3. Providing depreciation
4. None of these

Answer

(B) In making provision for bad doubtful debts

QN25. Rules of action or conduct adopted by the accountants universally while recording accounting transaction

1. Accounting convention
2. Accounting concepts
3. Accounting principles
4. None of these

Answer

(C) Accounting principles

QN26. Which of the following items would not fall under the definition of an asset?

1. Land
2. Machine
3. Cash
4. Milk

Answer

(D) Owner Equity

QN27. Basic assumptions or conditions upon which the science of accounting is based.

1. Accounting convention
2. Accounting concepts
3. Accounting principles
4. None of these.

Answer

(B) Accounting concepts

QN28. Which of the following is time span into which the total life of a business is divided for the purpose of preparing financial statements?

1. Fiscal year
2. Calendar year
3. Accounting period
4. Accrual period

Answer

(C) Accounting period

QN29. The system of recording based on dual aspect concept is called:

1. Double account system
2. Double entry system
3. Single entry system
4. All the above

Answer

(B) Double entry system

QN30. Preliminary expenses are recorded in ______________

1. Equity and liabilities-Liability side of B/S
2. Current liabilities- Liability side of B/S
3. Fixed assets- Asset side of B/S
4. Asset side of B/S

Answer

(D) Asset side of B/S

QN31. ______________ is a person or item for which cost may be ascertained.

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

Answer

(B) Cost centre

QN32. Which of the following is not a fixed asset?

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

Answer

(B) Bank Balance

QN33. 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

Answer

(C) Entity concept

QN34. 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

Answer

(b) Depreciation

QN35. 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

Answer

(B) Office fixtures sold

QN36. 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

Answer

(D) Correction concept

QN37. 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

Answer

(C) (a) &(b) above

QN38. Marginal costing is concerned with:

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

Answer

(B) Variable cost

QN39. 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

Answer

(D) creditors

QN40. Cash Purchases:

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

Answer

(C) Decreases assets