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FM & Accounting MCQ's

FM & Accounting MCQ's

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Published by: ✬ SHANZA MALIK ✬ on Jan 23, 2011
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PLANET IT
TM
PLANET IT
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PLANET IT
TM
Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999
Page No. 1
FINANCIAL & MANAGEMENT ACCOUNTINGMB0025
Section 11 Accounting is a branch of knowledge, concerned withrecording classifying analyzing and reporting financialinformation to _____ regarding the financial performance of organisation.a) Ownerb) Bankersc) Creditord) All2 _____ is the discipline of measuring, communicating andinterpreting financial activities and it is widely referred to aslanguage of businessa) Accountingb) Record keepingc) Financial managementd) None3 _____ is a person to whom the business owes some thing.a) Debtorb) Creditorc) Traderd) Stock Holder4 Institute of Chartered Accountants of India establishedAccounting Standards Board in _____a) 1978b) 1877c) 1976d) 19775 While revenue expenses are charged against profit, capitalexpenses are shown in the balance sheet as _____a) Assetb) Liabilitiesc) Cashd) None6 _____ is a business activity involving transfer of money ormoney’s wortha) Saleb) Transactionc) Cash flowd) None7 _____ is a book of original entrya) Journalb) Book keepingc) Both a & bd) None8 Purchases book is also called _____a) Purchases keepingb) Cash journalc) Purchases journald) Any of them9 What is bills receivable for a _____ is bills payable to the_____a) Drawee, Drawerb) Creditor, Debtorc) Drawer, Draweed) Debtor, Creditor10 Cash book containing cash and bank columns is known asa) Multi column cash bookb) Double column cash book c) Debit or credit cash bookd) None11 _____ contains accounts of creditors from whom goods arepurchase on credita) Debtors ledgerb) Creditors ledgerc) General ledgerd) None12 Posting is done from ______a) Journal bookb) Subsidiary booc) Any of themd) None of them13 _____ stands as a bridge between primary and secondarybooks on one hand and final statements of accounts on theother handa) Trial balanceb) Ledgerc) Journald) None14 Which of the following is not an error which do not affectstrial balancea) Error of omissionb) Error of commissionc) Error of principled) None15 _____ error is also called off-setting errora) Compensating errorb) Commission errorc) Omission errord) None16 The basis for preparing final accounts is the Trial Balance.For Trial Balance, the _____ are the root.a) Ledger balanceb) Journal entriesc) Scientifically recordingd) Book keeping17 Expenses due but not yet paid are known as ______a) Outstanding expensesb) Instanding expensesc) Debtsd) Credit18 _____ debts are those debts which are not recovereda) Outstanding debtsb) Unrecovered debtsc) Unaccepted debtsd) Bad debts19 There are _____ types of discounts allowed to customers ina business.a) Threeb) Twoc) Fourd) Five20 Which one is not a management accounting techniquea) Break-even analysisb) Ratio analysisc) Variance analysisd) ABC analysis21 Costs incurred in the past is _____ costa) Relevant costb) Sundry costc) Sunk costd) None22 ‘Every fact that is learned becomes a key to other facts’.said by:-a) E.Y. Youmansb) Genouc) Y.O Hertzd) None23 Which one is not correctRatio can be expressed in the following form:a) As proportionb) As percentagec) As decimald) As turnover or rate24 _____ measures the firm’s ability to meet its short termobligations.a) Liquidity Ratiob) Profitability Ratioc) Leverage Ratiod) Current Ratio25 Which one is not a current ratioa) Trade debtorsb) Bank overdraftc) Marketable securitiesd) Cash inhand26 Liquid Ratio is also known as _____a) Quick Ratiob) Acid Test Ratioc) Bothd) None27 Net profit ratio is also called _____a) Net profit Marginb) Profit after taxesc) Operating profit margind) None28 STO stand fora) Sales Turnover Ratiob) Stock Trade Ratioc) Sales Takeover Ratiod) Stock Turnover Ratio29 Decrease in _____ is always a source of funds for the
 
PLANET IT
TM
PLANET IT
TM
PLANET IT
TM
Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999
 
PLANET IT
TM
PLANET IT
TM
PLANET IT
TM
Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999
Page No.2businessa) Assetsb) Liabilitiesc) Any of themd) none30 CFS stand fora) Cash flow statementb) Credit flow statementc) Cash flow stockd) None31 _____ also known as ‘Statement Accounting for variationsis cash’.a) Cash flow statementb) Fund flow statementc) Cash flow stockd) Cash transaction32 ______ is the total of direct materials cost, direct labourcost and chargeable expensesa) Factory costb) Prime costc) Direct costd) Total cost33 Which Item is not include in cost sheet :a) Income taxb) Interest on capitalc) Share premiumd) None34 Marginal cost is also known ______a) Variable costb) Direct costc) Labour costd) Primary cost35 _____ is the volume of activity where the organisation’srevenues and expenses are equala) CVPb) BEPc) BPEd) CPV36 The formula to find out the BEP ( in units) is :-a) Fixed expenses / Unit contribution marginb) Fixed expenses/ Contribution sales ratioc) Contribution / Expensesd) Expenses / Contribution37 Which one is not a step in Budgeting controla) Formulation of policiesb) Preparation of forecastsc) Preparation of budgetsd) Reporting the system38 Which one is not a limitation of budgetinga) Budget planb) Rigidityc) Replacementd) None39 Which one is not an essential features of Budgeting Controa) Forecastingb) Formation of budget committeec) Accounting systemd) Feedback process40 Material cost variance is equals to :a) Standard cost x Actual costb) Standard cost - Actual costc) Actual cost - Standard costd) Standard cost + Actual costSECTION 241 (i) Book keeping inclueds recording, analyzing & communi-cating.(ii) Book keeping is an adjunct of accountinga) True Falseb) False Truec) True Trued) False False42 (i) Purchase & Sale of goods is called ______(ii) Goods sold to customers either for cash or for credit areregarded as _____a) (i) Sales (ii) Tradeb) (i) Trade (ii) Salesc) (i) Transaction (ii) Salesd) (i) Trade (ii) Transaction43 (i) Expenses are different from payments.(ii) All transaction of a business are recorded in terms of money.a) True Trueb) False Falsec) False Trued) True False44 There are two systems of double entry book keepingnamely _____a) Cash system & mercantile systemb) Cash system & expenses systemc) Credit system and debit systemd) None45 Accounting trail is the process of identifying the _____i) Transaction or events(ii) Preparation of vouchersiii) Recording them as journal entriesiv) Preparation of ledger accountsa) (i) & (ii)b) (i) (ii) & (iii)c) (ii) (iii) (iv)d) (i) (ii) (iii) & (iv)46 Journal is subdivided into several books of original entry,they are also regarded as _____a) Primary books or secondary booksb) Cash books or money booksc) Receive books or payable booksd) None47 Cash purchases are recorded in _____ and credit purchsesare recorded in _____a) Cash books, credit bookb) Purchase book, credit book c) Cash book, purchase bookd) None48 _____ are the two techniques of preparing trial balancea) Total method & Trial methodb) Trial method & Balance methodc) Total method & Balance methodd) Trial method & Direct method49 (i) In trial method balance when error are located, theyshould be rectified(ii) It is a good practice to erase the mistakes and re-write thecorrect onesa) False Trueb) False Falsec) True Trued) True False50 Management Accounting function includea) Planningb) Organizingc) Coordinatingd) All51 (i) Financial Accounting is flexible(ii) Management Accounting is rigida) True Trueb) True Falsec) False Falsed) False True52 (i) Ratio analysis is a techinque of analysis and interpreta-tion of financial statements(ii) Ratio analysis is one of the most powerful tools of profitability conceptsa) True Trueb) False Falsec) True Falsed) False True53 (i) STO is also known as stock velocity(ii) DTO is also known debtors velocitya) True Falseb) False Truec) False Falsed) True True54 (i) Working capital is current assets minus current liabilities(ii) Three common usages of the term “FUND” are cash,working capital & total financial resourcesa) True Trueb) False Truec) True Falsed) False False
 
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Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999Ph: 011-65439499, 65066565/ 6/ 7, 28013999
Page No. 355(i) FFS is rigid but CFS is flexible(ii) FFS is concerned with the total provision of funds. CFS isconcerned with only casha) True Trueb) False Falsec) True Falsed) False True56 All managerial policies & decisions permeate all phases of cost accounting and cost information helps in :-(i) Acquiring plant and machinery(ii) Adding or reducing a product(iii) Buying or making partsa) (i) & (ii)b) (i) & (iii)c) (i) (ii) & (iii)d) (ii) & (iii)57 Calculate sales in in rupeesUnits produced 60,000. selling price per unit Rs 15. Profits tobe earned in Rs 87,500.a) 7,12,000b) 7,15,500c) 7,12,500d) 8,12,00058 Calculate MCSR or p/v ratio: Marginal cost Rs 24,000. SalesRs 60,000a) 80%b) 40%c) 60%d) 30%59 The budgets are normally classified according to theirnature. They area) Fixed budget, flexible budget, functional budgetb) Fixed budget, flexible budget, operational budgetc) Functional budget, operational budget, fixed budgetd) Operational budget, flexible budget, fixed budget60 DR Ltd. has decided to extend its range to include Denim jackets. One jacket requires a standard usage of 3 meters of direct material which has been set at a standard price of Rs.2.20 per meter. In the period, 80 jackets were made and 260meters of material consumed at a cost of Rs. 1.95 per meter.Calculate the direct material total variance.a) Rs. 21 varianceb) Rs. 22 variancec) Rs. 31 varianced) Rs. 32 varianceSECTION 261 (i) Accounting is an art and science.(ii) Accounting involves a process of identifying, classifyingand recording financial information, expressed in terms of money.(iii) Accounting is an information system.(iv) Accounting helps in taking managerial decisionsa) (i) (ii) & (iv)b) (i) (ii) (iii) & (iv)c) (i) (iii) & (iv)d) (ii) (iii) & (iv)62 Types of Accounting concepts are:-(i) Business separate entity concept, Going concern concept,Money measurement concept, Non Periodicity concept,Accrual concept(ii) Business separate entity concept, Cost & revenue concept,Money measurement concept, Non Periodicity concept,Accrual concept(iii) Business separate entity concept, Going concern concept,Money measurement concept, Periodicity concept, Accrualconcept(iv) Business separate entity concept, Going concern concept,Money measurement concept, Cost & revenue concept,Accrual concept63 Effect of Transactions on Accounting Equation(i) Increase in one asset with a decrease in another asset.(ii) An increase in one asset with an equal amount of increasein liablility.(iii) An increase in asset with an equivalent rise in theproprietor’s equity.(iv) Increase in a liability, followed by increase in proprietor’sequity.(v) Decrease in an asset and corresponding decrease inowner’s equity.a) (i) true (ii) true (iii) false (iv) true (v) trueb) (i) true (ii) false (iii) true (iv) true (v) truec) (i) true (ii) true (iii) true (iv) false (v) fasled) (i) true (ii) true (iii) true (iv) false (v) true64 Types of journal include :-a) Purchases book, sales book, purchases returns book, salesreturns book, bills receivable book, bills payable book, cashbook and journal properb) Purchases book, receive book, purchases returns book,sales returns book, bills receivable book, bills payable book,cash book and journal properc) Purchases book, sales book, purchases returns book, salesreturns book, bills credit book, bills payable book, cash book and journal properd) a) Purchases book, sales book, purchases returns book,sales returns book, bills receivalble book, bills payable book,cash book and cash transaction book 65 Match the column(1) Error of omission(2) Erroe of commission(3) Error of principle(4) Compensating errors(i) _____ occurs when a transaction is completely omitted fromthe books of accounts.(ii) If the error of wrong posting, wrong casting, wrongcalculation etc. committed in the books of original entry orledger, it is said to be _____(iii) While drawing journal entries, often _____ is committedand this goes un noticed because it does not affect the total of trial balance.(iv) It is also called off-setting errora) 1(i) 2(ii) 3(iii) 4(iv)b) 1(ii) 2(i) 3(iii) 4(iv)c) 1(i) 2(iii) 3(ii) 4(iv)d) 1(iv) 2(ii) 3(i) 4(iii)66 (i) Expenses due but not yet paid are known as doubtfulexpenses.(ii) Expenses paid in advance are regarded as prepaid ex-penses.(iii) Depreciation is reduction in the value of an asset due toconstant use of the same, which is called wear and tear.(iv) Bad debts are those debts which are not recovered. If baddebts are shown outside the trial balance, which means thatthey are identified after the preparation of Trial Balance.(v) Provision for bad debts is a liability to be incurred in futureand so it should appear on the liability side of balance sheet.a) (i) true (ii) true (iii) true (iv) true (v) trueb) (i) false (ii) true (iii) true (iv) true (v) truec) (i) false (ii) false (iii) true (iv) true (v) falsed) (i) true (ii) false (iii) true (iv) true (v) false67 Special features of Management Accounting are(i) Selective in nature(ii) Provides data(iii) Future oriented(iv) Cause and effect relationship(v) Adherence of rules(vi) Economic reality(vii) Goal congruence(viii) Quantitative techniques(ix) Certaintya) (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)b) (i) (ii) (iii) (v) (vi) (vii) (viii) (ix)c) (i) (ii) (iii) (iv) (vi) (vii) (viii)d) (i) (ii) (iv) (v) (vi) (vii) (viii) (ix)68 State true or false(i) The objective of Financial Accounting is to collect informa-tion for internal communication and use.

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