WorksheetsManagement Accounting Quiz
Total questions: 50
Worksheet time: 25mins
Management accounting is primarily concerned with:
Recording financial transactions
Providing information for managerial decision making
Filing tax returns
Auditing company accounts
Which of the following best defines management accounting according to CIMA, London?
Recording financial data for shareholders
Application of knowledge and skills in preparation of accounting information for planning and control
Maintaining tax records
Auditing financial transactions
The American Accounting Association defines management accounting as:
Recording all transactions of a business
Application of techniques in processing historical and projected data for rational decision making
Tax compliance and planning
Maintenance of ledgers
Which of the following is not an objective of management accounting?
Providing data for planning
Motivating employees
Measuring performance
Filing statutory tax returns
Which of the following is a function of management accounting?
Communicating information
Budgetary control
Both (a) and (b)
None of these
Which of the following is part of the scope of management accounting?
Financial accounting
Cost accounting
Revaluation accounting
All of the above
Which of the following is a tool of management accounting?
Budgetary control
Ratio analysis
Break-even analysis
All of the above
Which of the following is not a utility of management accounting?
Provides data
Modifies data
Facilitates control
Filing returns with SEBI
Interim reporting in management accounting refers to:
Yearly balance sheet only
Preparation of monthly, quarterly, half-yearly income statements and reports
Only taxation records
None of these
Which is not a limitation of management accounting?
Top-heavy structure
Wide scope
Persistent efforts
Accurate legal compliance
Which of the following is a technique of management accounting?
Incremental cost analysis
Funds flow analysis
Cash flow analysis
All of the above
Which of the following is a function of management accounting in planning?
Providing relevant analyzed data
Maintaining tax records
Filing GST returns
Stock market reporting
Which function of management accounting involves departmental budgets and reports?
Organizing
Coordinating
Motivating
Communicating
Which of the following is a motivating function of management accounting?
Providing departmental P&L accounts
Filing audit reports
Internal control
Ratio analysis
One of the installation steps of a management accounting system includes:
Preparation of an organizational manual
Hiring auditors
Filing company law documents
Only financial reporting
Which type of accounting rearranges information provided by financial accounting?
Cost accounting
Management accounting
Tax accounting
Auditing
Which is not included in the scope of management accounting?
Inventory control
Interim reporting
Filing court cases
Statistical methods
Which function emphasizes development of suitable reporting systems?
Organizing
Motivating
Communicating
Coordinating
Which aspect of management accounting is concerned with ensuring capital is maintained intact in real terms?
Budgetary control
Revaluation accounting
Cost accounting
Ratio analysis
Which of the following is a feature of management accounting?
Serves as a tool of communication
Uses only qualitative information
Focuses solely on taxation
None of these
Which of the following best describes responsibility accounting?
Allocation of profits to shareholders
Evaluation of performance of responsibility centers
Maintaining statutory accounts
Filing returns
The major role of management accounting in decision-making is:
Historical recording
Providing relevant future-oriented information
Preparing audit reports
Tax saving
Which function of management accounting ensures suitable internal control for each profit/cost centre?
Organizing
Motivating
Controlling
Communicating
Which of the following is not a recognized tool of management accounting?
Ratio analysis
Comparative financial analysis
Statutory audit
Standard costing
The function of management accounting to evaluate performance is mainly linked with:
Measurement of managers and employees
Only financial institutions
Only tax authorities
None of these
According to CIMA, London, cost means:
Total sales minus expenses
Amount of expenditure incurred on or attributable to a given thing
The price at which goods are sold
The net profit of a company
Which is not a broad element of cost?
Material
Labour
Profit
Expenses
Which of the following is a direct material?
Lubricants
Oil
Carton used for packaging
Printing stationery
Wages of storekeepers is an example of:
Direct labour
Indirect labour
Direct expenses
Overhead allocation
Hire charges of special machinery for a specific job are classified as:
Direct expenses
Indirect expenses
Indirect labour
Factory overheads
Factory rent is an example of:
Direct expense
Indirect expense
Direct material
Conversion cost
Selling expenses are classified as:
Factory overhead
Office overhead
Selling & distribution overhead
Prime cost
Opportunity cost represents:
Costs incurred in past
Potential benefit forgone when one alternative is chosen
Cash payments in future
Fixed costs
Which of the following is a sunk cost?
Rent payable
Past purchase cost of machinery
Salary of manager
Advertising expenditure
Costs that differ between alternatives are called:
Opportunity costs
Differential costs
Irrelevant costs
Fixed costs
Fixed cost per unit:
Increases with increase in activity
Decreases with increase in activity
Remains constant always
Depends only on selling price
Which of the following is an example of mixed cost?
Sales commission
Monthly salary
Electricity bill with fixed and variable portion
Factory rent
Which type of cost remains fixed over limited ranges but increases when activity exceeds?
Step cost
Variable cost
Mixed cost
Differential cost
The cost beyond manager's control is termed:
Controllable cost
Non-controllable cost
Direct cost
Relevant cost
Prime cost consists of:
Direct material + Direct labour
Direct material + Overheads
Direct labour + Indirect labour
Direct material + Indirect material
Conversion cost is equal to:
Direct material + Direct labour
Direct labour + Manufacturing overhead
Prime cost - Indirect costs
None of these
Non-manufacturing costs are also known as:
Product costs
Period costs
Conversion costs
Prime costs
Which of the following is a product cost?
Advertising expense
Salesmen salaries
Factory rent
Office clerk salary
Which of the following is a period cost?
Direct materials
Direct labour
Factory overheads
Selling and administration expenses
Cost estimation refers to:
Actual cost determination
Pre-determining cost for budgeting and decisions
Reducing cost permanently
Apportioning indirect cost
The process of charging indirect expenditure to cost centres is called:
Cost allocation
Cost apportionment
Cost estimation
Cost control
Cost control emphasizes:
Past and present
Future only
Continuous improvement
Corrective actions
Cost reduction emphasizes:
Preventive action
Past and present
Challenging standards to lower costs continuously
Legal compliance
Activity Based Costing (ABC) is mainly used for:
External reporting
Decision making
Taxation
Financial audits
In Activity Based Costing, costs are first assigned to:
Products directly
Activities
Customers
Departments only
