Top 550+ Solved Management Accounting MCQ Questions Answer

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Q. __________ is a detailed budget of cash receipts and cash expenditure incorporatingboth revenue and capital items.

a. Cash Budget

b. Capital Expenditure Budget

c. Sales Budget

d. Overhead Budget

  • a. Cash Budget

Q. Sunk costs are __________.

a. Relevant for decision making

b. Not relevant for decision making

c. Cost to be incurred in future

d. Future costs

  • b. Not relevant for decision making

Q. Abnormal cost is the cost ___________.

a. Cost normally incurred at a given level of output

b. Cost not normally incurred at a given level of output

c. Cost which is charged to customer

d. Cost which is included in the cost of the product

  • b. Cost not normally incurred at a given level of output

Q. Responsibility Centre can be categorised into ___________.

a. Cost Centres only

b. Profit Centres only

c. Investment Centres only

d. All of the above

  • d. All of the above

Q. A profit centre is a centre ___________.

a. Where the manager has the responsibility of generating and maximising profits

b. Which is concerned with earning an adequate Return on Investment

c. Both (a) and (b)

d. Which manages cost

  • a. Where the manager has the responsibility of generating and maximising profits

Q. Management Accounting is and financial accounting differ in that managementaccounting information is prepared –

a. Following prescribed rules

b. Using whatever methods the company finds beneficial

c. For shareholders

d. To summarize the whole company with little detail

  • b. Using whatever methods the company finds beneficial

Q. Purpose of Management Accounting is to –

a. Past orientation

b. Help banks make decisions

c. Help managers make decisions

d. Help investors make decisions

  • c. Help managers make decisions

Q. Management Accounting is the branch of accounting concerned with reporting to –

a. Internal Managers

b. Shareholders

c. The Government

d. Bankers

  • a. Internal Managers

Q. Which of the following does NOT describe management accounting?

a. Evaluation of segments or products within the firm

b. Emphasis on the future

c. Externally focused

d. Detailed information

  • c. Externally focused

Q. Management accounting reports are prepared

a. To meet the needs of decision makers within the firm

b. Whenever shareholders request them

c. According to guidelines prepared by the shares and Financial Services Authority

d. According to financial accounting standards

  • a. To meet the needs of decision makers within the firm

Q. Management accounting is primarily concerned with -

a. Providing investors with useful information for valuing securities.

b. Providing creditors information on the status of their loans.

c. Providing managers with relevant information to help achieve organizational goals.

d. Providing the relevant taxation authorities with information to determine the amount

  • c. Providing managers with relevant information to help achieve organizational goals.

Q. Which matters are taken into consideration while preparing production budget ?

a. The estimate of the number of units to be produced during the budget period.

b. Estimate of number of units to be sold.

c. Policy regarding the wage fixation for labourers.

d. Policy regarding the selection of suppliers from whom materials would be purchase

  • a. The estimate of the number of units to be produced during the budget period.

Q. Which of the following matter is to be taken into account which preparing MaterialPurchase Budget ?

a. The supplier from whom materials are to be purchased.

b. The procedure of storing and preserving materials after they are received.

c. The prices at which receipts and issues of materials are to be recorded in stores ledger.

d. The maximum and minimum quantities of materials to be purchase

  • d. The maximum and minimum quantities of materials to be purchased.

Q. Which of the following matter is relevant with cash receipts and disbursement method ofpreparing Cash Budget ?

a. While determining the cash payments, it is necessary to estimate the credit sales.

b. While estimating cash receipts, it is not necessary to estimate the figure of credit sales.

c. Debtors Ratio is used to estimate the timings when cash collections would be obtained from credit sales.

d. While estimating the total amount of cash payment for purchases, it is necessary to decide from which suppliers materials are to be purchase

  • c. Debtors Ratio is used to estimate the timings when cash collections would be obtained from credit sales.
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