Sant Gadge Baba Amravati University, Amravati

Vidya Bharati Mahavidyalaya Amravati

Centre Code-126
University Theory Examination Winter-2021
Class- M.Com-I(Sem-II)
Accounting for Managerial Decision
Total Marks - 80 Time 3:00 to 4:00pm
Instruction : — 1) There are 40 Questions in the Questions paper 40 MCQs.
2) All Questions are Compulsory
3) Every question carries 2 marks.

1. Ratio analysis is a technique of ________ of financial statement

a. Analysis b. Interpretation c. Both d. None.

2. Which of the following is an important step in ratio analysis?

a. Calculation of ratios b. Comparison c. Interpretation d. All of the above

3. Who is the user of ratio analysis?

a. Management b. Creditors and financial institutions c. Investors d. All

4. Net profit ratio shows the relation between net profits and ________
a. Gross sales b. Net sales c. Sales return d. Cost of sales

5. In what way the ratio analysis helps the management?

a. Planning b. Coordination c. Control d. All

6. On what basis can ratios be classified?

a. Financial statement b. Function c. Both d. Subjective matter

7. What is the serious limitation of ratio analysis?

a. Window dressing b. Price level changes not consideredc. Personal bias d. All of the above

8. What is the expected standard for current ratio?

a. 1:2 b. 2:1 c. 2:3 d. 1:3

9. Funds Flow Statement holds significance for

a. Shareholders b. Financiers c. Government d. All of the above

10. Which of the following are applications of funds?

a. Payment of dividend on share capital b. Payment of tax
c. Increase in working capital d. All of the above

11. Which statement is prepared in the process of funds flow analysis?

a. Schedule of changes in working capital b. Funds Flow Statement
c. Both a and b d. None of the above

12. Statement of cash flows includes

a. Financing Activities b. Operating Activities c. Investing Activities d. All of the Above

13. In cash flows, when a company invests in fixed assets and short-term financial investments results in
a. Increased Equity b. Increased Liabilitiesc. Decreased Cashd. Increased Cash

14. A company that issues stocks and bonds to raise funds results in
a. Decrease in Cashb. Increase in Cashc. Increase in Equityd. Increase in Liabilities
15. Cash flow example from a financing activity is
a. Payment of Dividends b. Receipt of Dividend on Investment
c. Cash Received from Customers d. Purchase of Fixed Asset
16. Cash flow example from an investing activity is
a. Issue of Debenture b. Repayment of Long-term Loan
c. Purchase of Raw Materials for Cash d. Sale of Investment by Non-Financial Enterprise

17. A Primary purpose of using a standard cost system is

a. To make things easier for managers in the production facility.
b. To provide a distinct measure of cost control.
c. To minimize the cost per unit of production.
d. b and c are correct

18. The standard cost card contains quantities and costs for
a. direct material only. b. direct labour only
c. direct material and direct labour only d. direct material, direct labour, and overhead.

19. The difference between the standard and the actual is known as a _________
a. Abnormal loss b. Abnormal gain c. Variance d. None

20. The main purposes of standard costs include:

a. Control and performance measurement b. To value inventories
b. To simplify accounting d. All of the above

21. A ____________ shows full details of the standard cost of each product.
a. Job cost card b. Standard cost card c. Time Sheet d. None

22. A standard cost system may be used in

a. job order costing, but not process costing b. process costing, but not job order costing.
c. either job order costing or process costing d. neither job order costing nor process costing.

23. Standard costs may be used for

a. product costing b. planning c. controlling d. all of the these.

24. A bill of material does not include

a. quantity of component inputs. b. price of component inputs
c. quality of component inputs. d. type of product output.

25. Marginal costs is taken as equal to

a. Prime Cost plus all variable overheads b. Prime Cost minus all variable overheads
c. Variable overheads d. None of the above

26. If total cost of 100 units is Rs 5000 and those of 101 units is Rs 5030 then increase of Rs 30 in total
cost is _____
a. Marginal cost b. Prime cost c. All variable overheads d. None of the above

27. Marginal cost is computed as

a. Prime cost + All Variable overheads b. Direct material + All variable overheads
c. Total costs – All fixed overheads d. All of the above

28.Marginal costing is also known as

a.Direct costing b. Variable costing c. Both a and b d. None of the above
29. While computation of profit in marginal costing
a. Total marginal cost is deducted from total sales revenues
b. Total marginal cost is added to total sales revenues
c. Fixed cost is added to contribution d. None of the above

30.Marginal cost of capital is the cost of:

a. Additional Sales b. Additional Funds c. Additional Interests d. None of the above

31.Which of the following are limitations of break-even analysis?

a. Static concept b. Capital employed is taken into account.
c. Limitation of non-linear behavior of costs d. Limitation of presence of perfect competition

32.Which of the following are characteristics of B.E.P?

a. There is no loss and no profit to the firm. b. Total revenue is equal to total cost.
c. Contribution is equal to fixed cost. d. All of the above.

33. Which of the following is not a part of Master Budget?

a. Projected Balance Sheet b. Capital Expenditure Budget c. Operating Budgetsd. Budget Manual.

34. Which of the following is not shown in Cash Budget?

a. Proposed Issue of Capital b. Loan Repayment c. Interest on loan d. Depreciation.

35. Which one of the following are functional budget?

a. Production and sales budget. c. Raw material budget. c. Labour budget d. All of these

36. Production budget is dependent on:

a. Purchase budget b. Sales budget c. Cash budget d. Overhead budgets

37. Long term budgets are prepared for:

a. Capital Expenditure b. Research and development c. Long Term Finances d. All of these

38. Budgetary control helps in implementation of:

a. Standard Costing b. Marginal Costing c. Ratio Analysis d. None of these

39. Which one of the following is not a financial budget?

a. Cash budget b. Working capital budget c. Capital expenditure budget d. All of these

40. Budgetary control system acts as a friend, philosopher and guide to the:
a. Management b. Shareholders c. Creditors d. Employees