Accounting for Managers Online MCQ Set 14

QN01. Which does not comes under the head of asset:

  1. Fixed asset
  2. Investment
  3. Current asset
  4. Owners equity
Answer

(D) Owners equity

QN02. The word accounting can be classified in to:

  1. Financial accounting and management accounting
  2. Financial accounting and cost accounting
  3. Financial accounting, management accounting and cost accounting
  4. Cannot be classified
Answer

(C) Financial accounting, management accounting and cost accounting

QN03. The work of a book keeper is ______________ in nature.

  1. Analytical
  2. Clerical
  3. Executive
  4. Non – executive
Answer

(B) Clerical

QN04. 206. Which of the following is true for: – "In accounts recording is done of_ _ _ _ _"

  1. only financial transaction
  2. only non- financial transaction
  3. Both
  4. Personal transaction of Proprietor
Answer

(A) only financial transaction

QN05. Salary is one of the ______________ expenses

  1. Capital
  2. Revenue
  3. Direct
  4. Non – cash
Answer

(B) Revenue

QN06. A company’s telephone bill consisting of a Rs.200 monthly base amount, plus long distance charges, would be classified as a:

  1. Variable cost
  2. Committed fixed cost
  3. Direct cost
  4. Semi variable cost
Answer

(D) Semi variable cost

QN07. The practice of appending notes regarding contingent liabilities in accounting statement is pursuant of

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

(C) Convention of conservatism

QN08. In manufacturing a product, prime costs are:

  1. Raw materials and manufacturing overhead
  2. Indirect materials and manufacturing overhead
  3. Indirect labour and manufacturing overhead
  4. Direct materials and direct labour
Answer

(D) Direct materials and direct labour

QN09. Because of automation, which component of product cost is declining?

  1. Direct labour
  2. Direct materials
  3. Manufacturing overhead
  4. Advertising
Answer

(A) Direct labour

QN10. 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

QN11. Calculate the prime cost from the following information:
Direct material purchased: Rs. 1,00,000
Direct material consumed: Rs. 90,000
Direct labour: Rs. 60,000
Direct expenses: Rs. 20,000
Manufacturing overheads: Rs. 30,000

  1. Rs. 1,80,000
  2. Rs. 2,00,000
  3. Rs. 1,70,000
  4. Rs. 2,10,000
Answer

(C) Rs. 1,70,000

QN12. Aggregate of cost of goods sold and selling and distribution overheads is known as:

  1. Total Cost
  2. Office Cost
  3. Cost of sales
  4. Selling overhead
Answer

(A) Total Cost

QN13. 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

QN14. Which one of the following would not be classified as manufacturing overhead?

  1. Indirect labour
  2. Direct materials
  3. Insurance on factory building
  4. Indirect materials
Answer

(B) Direct materials

QN15. A manufacturing process requires small amounts of glue. The glue used in the process is classified as

  1. A prime cost
  2. An indirect material
  3. A direct material
  4. Miscellaneous expense
Answer

(B) An indirect material

QN16. Lubricants, used regularly in a production process, are classified as

  1. Miscellaneous expense
  2. Direct materials
  3. Indirect materials
  4. Immaterial items
Answer

(C) Indirect materials

QN17. Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

  1. Direct materials, direct labor, and factory overhead.
  2. Direct materials and direct labor only.
  3. Direct materials, direct labor, factory overhead, and administrative overhead.
  4. Direct labor and factory overhead.
Answer

(C) Direct materials, direct labor, factory overhead, and administrative overhead.

QN18. Accounting principles are ______________ which are adopted by the accountant universally while recording accounting transaction.

  1. Rules of action or conduct
  2. Which u can change as per accountant
  3. Which keep changing every year
  4. None of these
Answer

(C) Rules of action or conduct

QN19. Showing purchased office equipments in financial statements is the application of which accounting concept?

  1. Historical cost convention
  2. Materiality
  3. Prudence
  4. Matching concept
Answer

(B) Materiality

QN20. 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

(A & B) Good sold on credit & Office fixtures sold

QN21. Material concept tell about

  1. Disclosure of loss
  2. Disclosure of profit
  3. Disclosure of all information which are important for investor
  4. Disclosure of all information which are important for management
Answer

(C) Disclosure of all information which are important for investor

QN22. Using “lower of cost and net realisable value(Market Value)” for the purpose of inventory valuation is the implementation of which of the following concepts?

  1. The going concern concept
  2. The separate entity concept
  3. The prudence concept
  4. Matching concept
Answer

(C) The prudence concept

QN23. Which financial statement represents the accounting equation ASSETS = LIABILITIES + OWNER'S EQUITY

  1. Income Statement
  2. Cash Flow Statement
  3. Balance Sheet
  4. Fund Flow Statement
Answer

(C) Balance Sheet

QN24. Cost accounting aims at ascertain ______________ of product

  1. Cost
  2. Net profit
  3. Gross profit
  4. Selling price
Answer

(A) Cost

QN25. The purpose of financial accounts is reporting to

  1. Management only
  2. Government only
  3. Investor only
  4. All of these
Answer

(D) All of these

QN26. Financial accounting use data

  1. Projected data
  2. External data only
  3. Historic data
  4. Manager data only
Answer

(C) Historic data

QN27. 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

(C) Rules of Nominal

QN28. Payment of salary is recorded by:

  1. Debiting salary a/c; crediting cash a/c
  2. Debiting cash a/c; crediting salary a/c
  3. Debiting employee a/c; crediting cash a/c
  4. Debiting employee a/c; crediting salary a/c
Answer

(A) Debiting salary a/c; crediting cash a/c

QN29. Amortization of intangible Asset Such as Goodwill which has indefinite life is an example of accounting concept

  1. Conservatism Concept
  2. Continuity Concept
  3. Realisation Concept
  4. Measurement Concept
Answer

(A) Conservatism Concept

QN30. ______________ cost refers to those cost which have already been incurred and cannot be altered by any decision in the future.

  1. Opportunity cost
  2. Sunk Cost
  3. Incremental cost
  4. Decremental cost
Answer

(B) Sunk Cost

QN31. The main object of cost accounting is:

  1. To record day to day transactions of the business
  2. To reveal managerial efficiency
  3. To ascertain true cost of products and services
  4. To determine tender price
Answer

(C) To ascertain true cost of products and services

QN32. The nature of financial accounting is

  1. Historical
  2. Forward looking
  3. Analytical
  4. Social
Answer

(A) Historical

QN33. An accounting that deals with the accounting and reporting of information to management regarding the detail information is

  1. Financial accounting
  2. Management accounting
  3. Cost accounting
  4. Real Accounting
Answer

(B) Management accounting

QN34. Bad debt amount should be credited to

  1. Debtors account
  2. Bad debts account
  3. Sales account
  4. Creditors account
Answer

(A) Debtors account

QN35. Management accounting concentrates on ______________

  1. Opening books of account
  2. Preparation of financial statements
  3. Control of business activities
  4. None of these
Answer

(C) Control of business activities

QN36. Which of the following is not an internal user of management information?

  1. Creditor
  2. Department manager
  3. Controller
  4. Treasurer
Answer

(A) Creditor

QN37. Double entry system is used in which type of accounting

  1. Cost
  2. Financial
  3. Management
  4. All
Answer

(B) Financial

QN38. Which type of asset class includes those assets which have only definite use and become valueless when the yield is over?

  1. Fixed asset
  2. Current asset
  3. Fictitious asset
  4. Wasting asset
Answer

(D) Wasting asset

QN39. Cost accounting is applied to:

  1. Public undertakings only
  2. Large business enterprise only
  3. Small business concerns only
  4. Manufacturing and service concern
Answer

(D) Manufacturing and service concern

QN40. Reserve for doubtful debts appearing in the trial balance should be:

  1. credited to P & L a/c
  2. Shown as liability side in balance sheet
  3. Reduced from related asset in the balance sheet
  4. Both a and b
  5. Both a and c
Answer

(E) Both a and c

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