Management Accounting -1

Which of the following can be treated as either current liability or non-current liability depending on the adjustments?

• Provision for taxation

• General reserve

• Goodwill

• None of the above

When in a transaction, if both the aspects involved are either a current or non current, is there a flow of fund ?

• YES

• NO

Revenue from operations is also called

Dividends paid on Equity and Preference share Capital is cash flows from

• Operating Activities

• Investing activities

• Financing Activities

• None of the above

Cash equivalents are the short-term investments that can be readily converted into cash.

What is the maturity period of these Investments?

• 3 months or less

• More than 3 months to 6 Months

• Less than 1 year but more than 6 months.

• More than 1 year

Does the following transaction result in Change in Working Capital as per Funds flow statement?

" Preliminary Expenses written Off"

• Yes

• No

Answer explanation

It neither affects current asset nor current liability hence no change in working capital.

Does the following transaction result in Change in Working Capital as per Funds flow statement?

" Income Tax paid"

• Yes

• No

In a common size Income statement, what is the base for calculating the change percentage of the items?

• Net Sales

• Total Income

• Total Expenses

• Non Of the above

Which of the following is not a part of Profit and loss Adjustment Account?

• Depreciation on Machinery

• Amortization of goodwill

• Loss on sale of an asset

• Salaries paid

Answer explanation

Salaries paid is an operating expense.

Whereas other three are non cash and non operating expenses.

Choose the odd one out

• Sales budget

• Labour Budget

• Fixed Budget

• Production Budget

Answer explanation

Except Fixed Budget, Other three budgets are functional budgets.