Financial and Management Accounting Unit1 - 1 Mark Quiz Questions

1.Accounting was practiced through the means of cones, discs, spheres and pellets representing the token to measure commodities like sheep, clothing or bread. In which civilization this type of practice was prevalent? a. Babylonia b. Rome c. Indian civilization d. America 2.Indicate the best answer for the question as what is the primary function of book keeping. a. Recording economic data b. Calculate profit and loss at the end of an accounting period c. Classification and recording business transactions d. Obtain non economic data 3.One of the ingredients responsible for the creation of double entry book keeping is Private property. What does this mean? a. Right to modify the ownership of goods b. Power to transfer physical possession of goods c. Right to transfer public property from one person to another. d. Right to transfer ownership of goods from one person to another 4.The scope of Accounting is a. Preparation of ledger accounts and final accounts b. Preparation of final accounts c. Recording transactions, posting to ledger, prepare trial balance and final accounts

d. Recording and final accounts preparation

5.What is Accountancy? a. Subject of record keeping b. Profession of accounting c. System of holding a person accountable d. Knowledge of finding out profit or loss 6.What is the relationship between book keeping and accounting? a. Both are concerned with recording economic data b. They are synonymous. c. Book keeping is concerned with recording transactions while accounting is measuring, analyzing and communicating the financial data d. Accounting stops, book keeping starts 7.What new branch of accounting did emerge from industrial revolution? a. Government Accounting b. Financial Accounting c. Management Accounting d. Cost Accounting 8.Which of the following is non financial transaction? a. Production manager and Marketing manager quarrel each other in office b. Receiving commission for services rendered c. Payment of income tax d. Purchasing house property for personal purposes 9.Why did corporate form of organization create a need for increased financial disclosure and reporting?

a. Owing to separation between ownership and management b. Owing to demand from shareholders c. Owing to the large size of the organization. d. Owing to increased number of stake holders

10.Why is book keeping necessary? a. One can not remember particulars of all transactions, taking place during an accounting period b. Business transactions take place rarely c. It is more a formality d. To satisfy the stakeholders

Unit2 - 1 Mark Quiz Questions
1.A business unit is set up to exist for a long time. It is

a. Concept b. Luck c. Convention d. Practice 2.A convention is different from a concept because

a. It is a presumption b. It is a time tested principle c. Convention represents meaningless customs d. It is subjective and convenient principle 3.A has deposited Rs.5 lakh in four installments during the first four weeks of starting a financial company. Next month, the company is closed without paying back the money. Does this defeat the business concept of a. Separate business Unit b. Money measurement concept c. Accrual concept d. Going concern concept

4.A manufacturing Company has produced 50000 units of a product costing Rs.2,50,000. What accounting concept is missing in the above statement? a. Accrual concept b. Separate business unit c. Money measurement concept d. Periodicity concept 5.A manufacturing Company has produced 50000 units of a product during 2006. What accounting concept is missing in the above statement? a. Going concern concept b. Accrual concept c. Money measurement concept d. Separate business unit 6.Accounting Principles are based on a. Arbitrary practice b. Convenience c. Subjectivity d. Practicability 7.Building is an asset, depreciated usually under fixed installment method. Is it a. Convention b. Necessity c. Unreasonable habit d. Concept 8.Business entity is distinct from its owner. This helps in a. If business goes off, the owner does not b. If owner dies, the business does continue c. If business ceases to exist, the owner also ceases. d. Treating business unit is independent of its owner

9.What do you mean by a concept? a. A willful prediction b. Reasonable assumption c. Universal characteristic d. A regulated condition 10.Why do we need principles? a. To fulfill a formality b. To build up a science c. To lay down rules for action d. To control activities

Unit3 - 1 Mark Quiz Questions
1."Capital is invested in the business. How does it impact the accounting equation?" a. Cash increases the liability and capital increases asset of the business b. Capital of the business increases c. Capital appears as a liability and cash appears as asset to the business. d. Cash is received into the business as asset

2."Patent rights" Account is a _____ a. Tangible real account b. Intangible real account c. Personal account d. Nominal account

3."Ramesh has taken a loan of Rs.20000 from Suresh.How does this transaction affect the asset and liablility of his business?" a. Liability of Ramesh increases and cash in the business decreases b. B.Liability of the business decreases and Cash as an asset of the business decreases c. Liability of Ramesh increases and Cash (Asset) balance in the business increases

d. Liability of Ramesh decreases and cash in the business increases 4.What do you understand by an 'Account'? a. It is part and parcel of Accountancy b. It is commonly used accounting terminology c. It is an indicator of a head d. It is a summary of transactions pertaining to a particular head 5.What is 'Accounting Trail'? a. Process of commencing from recording to preparation of final accounts b. Process of preparing a trial balance c. Process of preparing all accounts d. Process of finding out P & L Account 6.What is a personal account? a. Account relating to individuals and persons. b. It is an individual transaction c. It is a private account d. It is not real or nominal account. 7.What is a real Account? a. Account which is existing b. Account which is tangible and can be felt c. Account which is not personal d. Account which is truthful

8.What is mercantile system of double entry? a. System adopted by merchants. b. System of recording only cash transactions c. Ststem of recording both cash and credit transactions d. System of recording only credit transactions 9.What is single entry system of book keeping? a. Transactions get recorded only once b. Only one aspect of transaction is recorded c. It is simple to understand d. Only a few personal accounts and real accounts are considered in single entry

10.Why is double entry system of book keeping better than single entry system?

a. Both aspects of a transaction are recorded b. Double entry is more elaborate c. Transactions get recorded doubletime d. All transactions are recorded

Unit4 - 1 Mark Quiz Questions
1.Credit sales create a. Supplier b. Tr. Creditors c. Agents d. Tr. Debtors

2.Debit all assets and credit all liabilities. This principle hold good because, they belong to a. Nominal accounts b. Real accounts c. Personal and real a/s accounts d. Personal accounts 3.How do you read this journal entry cash account: Dr To capital account a. cash account debtor to credit of capital account b. cash account is debited to capital account c. cash account debtor to capital account d. cash account is debit capital account is credit 4.If credit purchases are recorded in purchases book, in which book purchases are recorded a. journal b. bank pass book c. Journal proper d. cash book 5.Indicate the correct principle for nominal accounts a. Debit all impersonal assets and credit all impersonal liabilities b. Debit all expenses or losses and credit all incurs orgains c. Debit the giver and credit the receiver d. Debit all payments and credit all receipts 6.Narration to each journal entry is necessary because a. It is formality or convention b. It is a clear indication of transation c. It is difficult to remember why is it drawn d. It describes the transaction

7.Purchases book is a subsidiary book containing a. All purchases b. cash purchases of goods c. Purchases of goods d. Purchases of goods only 8.Sales books, also called sales day book, contains

a. Credit sales of goods b. Sales of goods made during an accounting period c. Sales of goods and other assets d. Cash sales of goods 9.State the rule of journalising with regard to personal accounts a. Debit what comes in and credit wher goes amt b. Debit all assets and credit all liabilities c. Debit the given and credit the receiver d. Debit the receiver and credit the given 10.Subsidiary books are also books of original entry because a. They contain non busing transactions b. They contain record of subsidiary transaction c. They contain record of transactions d. They contain original record of transactions 11.Subsidiary books are also called journal because a. They are prepared in substitution to journal b. They are prepared by llarge organisations c. They are note books of original entry, but prepared in the place of journal d. They contain the same particular as journal contains

12.What do you mean by primary books of accounts a. They are the books containing original entry b. They are important books c. They are not secondary d. They are the first books 13.What is in ward invoice a. Document to show the description of purchases of goods made b. Document issued by receiver of goods c. Document issued by godown keeper d. Document that comes in 14.What is journalising a. A career of journalism b. Process of making a record c. Writing a transaction in a book d. Systematic recording of journal entries in journal 15.What is the double entry principle for real accounts a. Debit all expenses and credit all incomes b. Debit what is benefitied and credit what is not benefited c. Debit what comes in and credit what goes amount d. b.Debit the receiver and credit the giver

Unit5 - 1 Mark Quiz Questions
1.What is closing entry? a. Entry on the date of closing the accounting period b. An entry to close the business c. Entry to close revenue accounts to prepare final accounts d. Entry drawn at the end of the day

2.What is Journal Proper? a. Journal , properly being maintained b. Journal of all uncovered accounts c. Journal containing proper accounts d. Journal containing all such transactions, not covered byGeneral Journal or subsidiary books 3.What is opening journal entry? a. Journal entry found on opening the Journal b. Entry made at the beginning of the journal c. Entry made on the opening date of accounting year d. Entry of assets and liabilities and capital as on the opening date of the accounting period 4.What is secondary book in accounting? Is it a. Replica of Journal b. Book of less importance c. Book of second entry to ensure internal check d. Ledger of accounts, posting being made from journal

Unit6 - 1 Mark Quiz Questions
1.Identify in the following an error that can be disclosed by TB a. Salary account is wrongly debited instead of repairs are b. b.Mr X a/c is debited more by Rs 100 and Mrs X a/c is debited less by Rs 100 c. A transaction of purchase is completely not taken to journal at all d. Sales a/c is undercast by Rs 500

2.If assets accounts and expenses accounts are shown on debit side of TB, what accounts are shown an credit side of TB a. Income & capital accounts b. Income accounts c. Liabilities, capital and income accounts d. Liabilities and capital accounts 3.If personal account shows a credit balance, what does this indicate ?

a. It indicates 'Creditor' b. It indicates an item of income c. It indicates a 'Debtors' d. It indicates an asset 4.If T.B does not tally , what is its consequence ? a. P&L A/C may not tally b. Trading A/C may not tally c. Balancesheet does not tally d. Profit/ loss may not be correct 5.Interest on fixed Deposit is an item found in TB a. Neither debit not credit b. On credit c. Both debit and credit d. On Debit side 6.The object of preparing trial balance is a. To check arithmetic accuracy of ledger posting b. To classify different accounts such as personal, real & nominal c. To verify the correctness of journal entries d. To summarise ledger accounts

7.The two methods of preparing trial balance are a. Total method & credit method b. Debit method & credit method c. Horizontal & vertical methods d. Journalising & ledger 8.There are 2 types of errors in accounting process. They are a. Good and bad errors b. Intentional and unintentional c. String & weak errors d. Disclosed and not disclosed by TB 9.What do you mean by error disclosed by TB ? a. Error that are dangerous b. Errors which are not closed c. Errors that are notified by TB d. Error that can be found as TB does nto tally 10.Which of the following contains error of commission? a. Ramanan,s account is debited instead of ramana's a/c b. An invoice of Rs 1200 is takenas Rs 1020 in the journal c. Ravi,s account is debited by Rs 2000 but posted to the credit side of his a/c d. Plant purchased is transferred to purchases a/c

Unit7 - 1 Mark Quiz Questions
1.Final accounts are prepared recognizing the concept of a. Money measurement concept b. Income recognition concept c. Separate entity concept d. Accrual Concept

2.If outstanding expense account appears in the trial balance, what does it mean?

a. Outstanding expenses of last year, to be adjusted in the current year b. Closing balance of outstanding expenses of current year c. Expenses of current year outstanding d. Outstanding expenses to be considered in P&L A/C 3.On which side outstanding expenses account appear in the balance sheet? a. Asset side b. Appears in trial balance c. Appears in Journal proper d. Appears on liability side 4.Prepaid tax for 2004-05 is Rs.12,000 and prepaid tax for 2005-06 is Rs.18,000. If the taxes payable for the year is Rs.88,000, find out what is the actual tax paid in 2005-06? a. Rs. 82,000 b. Rs. 88,000 c. Rs.58,000 d. Rs. 94,000 5.Rent paid per month is Rs.5,000 . During the year 2005-06 the rent actually paid was Rs. 75,000. Find out what is prepaid in the year 2005-06? a. Rs.15,000 b. Rs.5,000 c. Rs.20,000 d. Rs. 10,000 6.The basis for preparing Final Accounts is a. Journal proper b. Trial Balance c. Journal entries d. Ledger accounts

7.What is outstanding expense? a. Expense yet to be incurred b. Expense incurred but not yet paid c. Expense which is outstanding d. Expense incurred and paid 8.What is prepaid expense? a. Expense paid in advance in the current year relating to coming year. b. Expenses to be paid in future c. Expense paid in advance for current year d. Expenses paid after preparation of final accounts 9.What is the purpose of preparing final accounts? a. To find the operational performance of the business for an accounting period

b. To know the balance at the end of the accounting period c. To know expenses and revenues d. To find out profit or loss 10.Which type of account, is outstanding expense? a. Real account b. Personal account c. Ficticious account d. Nominal account

Unit8 - 1 Mark Quiz Questions
1.A budget is a. Verbal expression b. Qualitative expression c. Quantitative expression d. Written expression

2.Budgetary control is a. Reaction in advance b. Action in advance c. No action in advance d. Planning in advance 3.Budgetary control is done through a. Production b. Budgets c. Cash d. Credit 4.Decision-making in any field is primarily a _______ of management. a. Responsibility b. Function c. Duty d. Action 5.Decisions are made. a. Ever b. Only once c. Time to time d. At emergency. 6.Forecasting and planning function include: a. Short and long term rejection. b. Short and long term forecasts c. Short and long term decisions. d. Short and long term objection

7.Functions of Management Accounting include. a. Decisions b. Postulates c. Principles d. Activities 8.Management accounting is an ______________ to the management. a. Accounting information. b. Accounting service c. Accounting necessity d. Accounting procedure 9.The data management accounting is required for a. ersonal use b. External use c. Internal use d. Official use

10.The scope of management accounting is based on. a. Financial data b. Historical financial data c. Historical production data d. Historical cash data.

Unit9 - 1 Mark Quiz Questions
1.Acid test ratio excludes a. Capital b. Liability c. Asset d. Inventory 2.Acid test ratio is a. current liabilities – stock / current assets b. current assets + stock / current liabilities c. current assets / current liabilities d. current liabilities – stock / current assets e. current assets – stock / current liabilities 3.Analysis means a. Integration b. Separation c. Narration d. Creation 4.Current ratio compares:

a. Current assets with current liabilities b. Fixed assets with current assets c. Current assets with fixed asset d. Current assets with current asset

5.Current ratio deals with a. Mutual obligation b. Mid-term obligation c. Long-term obligation d. Short-term obligation 6.Current ratio is a. current assets * current liability b. current assets – current liability c. current asset / current liabilities d. current assets + current liability 7.Current ratio is expressed as a. Average b. Proportion c. percentage d. Turnover 8.Current ratio which is lower than industry ratio indicates problem on a. Liquidity b. Liability c. Viability d. Profitability 9.Financial ratios are meant for a. Assessing performance and status b. Possessing performance and status c. Positioning performance and status d. Proving performance and status

10.For fair food industries the CR may be a. Equal to none b. Equal to one c. Less than 1 d. More than 1 11.Liquidly deals with ___________ to cash

a. Convertability b. Suitability c. Rigidity d. Rapidity 12.Ratio analysis helps to make a. Deletion b. Decision c. Deduction d. Rejection 13.Ratio analysis is a a. Bolt b. Nut c. Screw d. Tool 14.Ratio analysis is a technique of a. Analysis and finalization b. Analysis and introduction c. Analysis and conclusion d. Analysis and interpretation

15.Ratio can be expressed as:

a. Proportion, percentage, turnover b. Revision, division, conclusion c. Addition, subtraction, multiplication d. Calculation, division, simplification 16.Ratio deals with a. b.Global relationship b. Legal relationship c. Quantitative relationship d. Local relationship 17.Ratio is based on a. Comparsion b. Causation c. Narration d. Relation 18.Ratio is calculated by a. Multiplying one figure with another b. Adding one figure with another c. Subtracting one figure with another d. Dividing one figure with another 19.Ratio means a. One number expressed in percentage b. One number multiplied by itself c. One character expressed in numbers d. One number expressed in terms of another

20.Rule of Thumb of current ratio is a. 2: -1 b. 1: -1 c. 1:1 d. 2:1

Unit10 - 1 Mark Quiz Questions
1.Fund flow analyses the movement of

a. Creditors b. c.Debtors c. Funds d. Persons 2.Fund flow analysis is a __________________technique a. obsoletete b. useless c. Traditional d. modern 3.Fund flow deal with changes in a. Personnel items b. Financial items c. Technical item d. Production items flow indicates the inflows and outflows of a. Cash b. Income c. Loss d. Profit 5.Fund flow shows the movement of funds between a. Profit and loss dates b. Trading dates c. Two balance sheet dates d. Income & expenditure dates 6.Funds are used in a narrow sense indicating a. Profit b. Income c. Cash d. Assets 7.Increase in CA will increase the a. CL b. WC c. CA d. none 8.Schedule of working capital changes is prepared to find a. Net change b. No change c. Gross change d. Negative change

9.SWC deals with only a. CA and FA b. CA and FL c. CA and CL d. CA and fictious assets 10.The objective of fund flow is to inform the shareholders about a. wastage of funds b. Use of funds c. Misuse of funds d. Savings of funds

Unit11 - 1 Mark Quiz Questions
1.CFS brings in

a. Liquidity b. Profitability c. Insolvency d. Liquidation 2.CFS deals with cash a. Inflows b. Both (a) and (b) c. Outflows d. None

3.CFS depends on

a. Receipt b. Loss c. Both b & c d. Profit 4.CFS explain reasons for low balance of a. Asset b. Overdraft c. Cash d. Profit

5.CFS is a document of a. Finance b. Sales c. Personnel d. Production

Unit12 - 1 Mark Quiz Questions
1.Components of a cost is a. Direct b. Both (a) and (b) c. Indirect d. None

2.Cost is a sacritice of expense in a. Present b. Past c. Advance d. None 3.Cost is amount of resources

b. Given up c. Gone up d. Grown up 4.Cost refer to

a. Expense b. Source c. Application d. Income 5.Element of cost is

a. All the three b. Materials c. Expenses d. Labor 6.Materials may be a. Finished are b. Both (a) and (b) c. None d. Raw materials

7.Materials may be a. Direct and Indirect b. Direct or Indirect c. Direct d. Indirect 8.Notional expenditure does not involve a. Cash inflow b. Source c. None d. Cash outlay 9.Resources are expressed in a. Money equivant b. Both a and b c. Kind d. Money 10.Unit 1980's, CA was in the domain of a. Doctor b. Engineer c. Economist d. Daughter 11.CFS is measured based on a. Statement b. Expenses c. Income d. Both (a) & (b)

12.CFS is prepared to know the position of a. Asset b. Profit c. Flow d. Cash 13.CFS is prepared with the help of a. Pass book b. Cash book c. Balance sheet d. Petty cash book 14.Its importance of CFS is in its a. Range b. Short term c. All d. Plan

15.Object of CFS is to show causes of

a. Changes b. Charges c. Chases d. Chooses

Unit13 - 1 Mark Quiz Questions
1.All cost can be classified as a. Fixed b. Semi c. both (a) and (b) d. Variable 2.Break even analysis is a. Extended cost b. Expanded cost c. Extension of MC d. None 3.Break-even a technique of studing the relation of a. Cost -volume-sales b. Cost volume profit c. Cost -volume - income d. Cost volume -production 4.Break-even analysis aims to aim it to measure variations of a. All b. Cost with volume c. Cost with money d. Cost with time

5.Fixed cost per unit remain a. Constant b. Fixed c. None d. Variable 6.Fixed cost remains constant a. In price b. In value c. In total d. Per unit 7.Information entile a. Benefit b. Cost c. None d. Both (a) and (b) 8.Information is a. Commodity b. Brutality c. Vitality d. Modality 9.Marginal cost is a. Variable b. Semi variable c. None d. Fixed

10.Marginal cost is not a system of a. Cost calculation b. Cost manipulation c. Cost ascertainment d. None 11.Marginal costing considers only cost of a. Fixed b. Semi-variable c. None d. Variable 12.Marginal costing excludes

a. Fixed costs b. Variable c. None d. Semi-variable 13.Mariginal cost is also known as a. Variable cost b. None c. Variance cost d. Standard cost 14.Sales mix will remain a. both (a) and (b) b. All the three c. Variable d. Constant

15.Under marginal cost, costs are classified as a. None b. Fixed c. Variable d. Both (a) and (b) 16.Under marginal costing, WIP is valued as a. Factory cost b. Marginal cost c. Prime cost d. Total cost 17.Variable cost is constant in a. Both (a) and (b) b. None c. Total d. Per unit 18.Variable cost varies in a. None b. Total c. Proportion d. Ratio 19.Variable cost varies in a. Sales b. None c. Both (a) and (b) d. Production

20.Variable cost varies in a. Per unit b. Both (a) and (b) c. None d. Total

Unit14 - 1 Mark Quiz Questions
1.Budget are a. elaborate b. actual c. estimate d. accrual 2.Budget is a statement of a. financial b. none c. quantitative d. both (a) and (b) 3.Budget is an

a. economic service b. political service c. family service d. national service

4.Budget is an exercise of

a. Forward plan b. vertical plan c. backward plan d. horizontal plan 5.Budgetary control brings in a. consolidation b. cooperation c. covariation d. coordination 6.Budgetary control is a ____ for management control a. fitting b. tool c. none d. fixtures 7.Budgetary control is control of a. output b. operation c. both a and b d. none 8.Budgetary control objective is to maximise a. income b. profits c. loss d. expenses

9.In budgeting planning refers to budget a. calculation b. valuation c. preparation d. manipulation

10.Planning deals with gools of operation pertaining to a. short term b. both (a) and (b) none c. none d. long term

Unit15 - 1 Mark Quiz Questions
1.Allowances are made for ___________while setting standards a. both a and c b. wastages of abnormal c. normal wastage d. Abnormal wastage 2.Analysis of actual costs with _______ is done with standard costing a. Pre-mature b. Pre-determined c. prepaid d. Pre-conceived

3.For direct material, focus is on

a. both a and c b. price c. Quantity d. none 4.In standard costing standards are based on

a. technical info b. research info c. economic info d. general info 5.Normal allowances are based on a. normal time b. Ideal time c. none d. Idle time 6.Standard costing are commonly used in a. None b. service c. manufacturing organization d. both a and d 7.Standard costing is a system of a. cost control b. cost classification c. cost ascertainment d. none

8.Standard costing is a system of a. Financial accounting b. Cost accounting c. none d. management accounting 9.Standard costing is mainly applied to a. processes b. products c. both a and b d. none 10.Standard costing is normally associated with a. marterial control b. overhead control c. Budgetary control d. labor control 11.Standard costing restricts only with a. revenues b. costs c. both a and b d. income 12.Standards are determined by the department of a. sales b. production c. Engineering d. Finance

13.Standards are fixed for

a. all b. material c. labor d. overheads 14.Standards on labor is on the basis of a. time study b. motion study c. both a and c d. none 16.The meaning of standard costing is focussed on a. labor control b. cost control c. material control d. financial control

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