Management Accounting MCQs with Answers

Multiple Choice Questions 40 Pages
SBJ

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Sai Bhai Johal
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  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    Unit :1 Introduction
    Multiple Choice Questions:
    1. ………………………Accounting is concerned with measurement of the
    cost and value of people for the organization.
    a) Financial Accounting
    b) Management Accounting
    c) Corporate Accounting
    d) Human resource Accounting
    2. The important objective of …………………..accounting is to organize the
    accumulated financial data into meaningful information.
    a) Financial Accounting
    b) Management Accounting
    c) Corporate Accounting
    d) Human resource Accounting
    3. ……………………..accounting is the adoption and analysis of accounting
    information and its diagnosis and explanation in such a way so as to assist the
    decision -makers.
    a) Financial Accounting
    b) Management Accounting
    c) Corporate Accounting
    d) Human resource Accounting
    4. Planning is that function of ……………………..which requires an efficient system
    of decision making.
    a) Finance
    b) Management
    c) H.R
    d) Administration.
    5. Financial ……………..ensures effective utilization of available financial resources
    in the long period.
    a) Accounting
    b) Planning
    c) Management

    Page 1

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    d) Administration.
    6. …………………..costs are pre-determined targets adainst which actual results
    are evaluated.
    a) Marginal
    b) Standard
    c) Actual
    d) Budgeted
    7. Financial Accounting data is primarily meant for …………………
    a) External users
    b) Internal users
    c) Employees
    d) Bank
    8. Cost Accountant should report to the ……………management.
    a) Top
    b) Middle.
    c) Administration
    d) Lower
    9. The transaction which increase working capital are ………….. of funds
    a) Sources
    b) Application
    c) Utilization
    d) Diversion
    10. Management accounting begins where………………. accounting ends.
    a) Financial Accounting
    b) Management Accounting
    c) Cost Accounting
    d) Human resource Accounting
    Answer key
    1d
    2a
    3b
    4b
    5b
    6b
    7a
    8a
    9a
    10c

    Page 2

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    Unit2: Analysis & interpretation of financial statement
    Multiple Choice Questions:
    1. When the concept of ratio is defined in respect to the item shown in the
    financial statements, it is termed as
    A. Accounting ratio
    B. Financial ratio
    C costing ratio
    D. none of the above
    2. The relationship between two financial variables can be expressed in:
    A Pure ratio
    B. Percentage
    C. Rate or time
    D. all the above
    3. Stock is considered as a liquid asset as anytime it can be converted into cash
    immediately.
    A. Yes
    B. No
    C. Only YES
    D. None of the above
    4 . Return on properties funds is also known as.
    A. Return on net worth
    B. Return on shareholders fun
    C. Return on the shareholders investment
    D. All the above

    Page 3

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    5. What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold
    is Rs 2,00,000 & sales return is Rs10,000 ?
    A. 13 %
    B. 28%
    C. 26%
    D. 20%
    6.Liquid asset is determined by
    A. Current asset - stock - prepaid expense
    B. Current asset + Stock +prepaid expense
    C. Current asset + prepaid expense
    D .None of the above
    7.Which of the following is not included in current assets.
    A. Debtors
    B. Stock
    C. Cash at bank
    D. Cash in hand
    8. Liquidity ratios are expressed in
    A. Pure ratio form
    B. Percentage
    C. Rate or time
    D. None of the above
    9. Working capital turnover ratio can be determined by :
    A. ( Gross profit / Working capital )
    B. ( Cost of goods sold / Net sales )
    C. ( Cost of goods sold / Working capital)
    D. None of the above

    Page 4

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    10. Determine Working capital turnover ratio if, Current asset is Rs 1,50,000,
    current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000.
    A. 5 times
    B. 6 times
    C. 3 times
    D. 1.5 times
    11. The ratio analysis is helpful to management in taking several decisions, but as
    a mechanical substitute for judgement and thinking, it is worse than useless.
    A. True
    B. False
    C. may be false
    D. both a and b
    12. Profit for the objective of calculating a ratio may be taken as
    A. Profit before tax but after interest
    B. Profit before interest &tax
    C. Profit after interest & tax
    D. All the above
    13. If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is
    A. 24%
    B. 416%
    C. 60%
    D. None of the above

    Page 5

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    14. General profitability ratios are based on
    A. Investment
    B. Sales
    C. A & B
    D. None of the above
    15. Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is
    Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales.
    A. 31 times
    B. 11 times
    C. 8 times
    D. 32 times
    16. Financial Statement Analysis can be used for assessment of past performance
    only.
    A. false
    B. true
    17. Ratio analysis is an important means of expressing the relationship between
    two numbers.
    A. true
    B. false
    18. Ratio analysis helps in investment decision.
    A. true
    B. false
    19. Liquid Ratio is also known as 2:1 ratio.
    A. false
    B. true

    Page 6

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    20. Current ratio indicates the solvency position of the business.
    a. true
    b. false
    21. An ideal Liquid ratio is considered as 1:1
    a. true
    b. false
    22. The gross profit represents the net margin.
    a. false
    b. true
    23. Reliability of ratios depend upon the reliability of financial data.
    a. true
    b. false
    24. Ratio analysis ensures effective cost control.
    a. true
    b. false
    25. An ideal current ratio is considered as 1:2
    a. false
    b. true
    26.The ratios which reveal the final result of the managerial policies and
    performance is .
    A. turnover ratios.
    B. profitability ratios.
    C. short term solvency ratio.
    D. long term solvency ratio.

    Page 7

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    27. Return on investment is a .
    A. turnover ratios.
    B. short term solvency ratio.
    C. profitability ratios.
    D. long term solvency ratio.
    28. Net profit ratio is a .
    A. turnover ratio.
    B. long term solvency ratio.
    C. short term solvency ratio
    D. profitability ratio.
    29. Stock turnover ratio is a .
    A. turnover ratio.
    B. profitability ratio.
    C. short term solvency ratio.
    D. long term solvency ratio.
    30. Current ratio is a
    A. short-term solvency ratio.
    B. long-term solvency ratio.
    C. profitability ratio.
    D. turnover ratio.
    31.Proprietary ratio is a .
    A. short-term solvency ratio.
    B. long-term solvency ratio.
    C. profitability ratio.
    D. turnover ratio.

    Page 8

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    32. Fixed assets ratio is a
    A. short-term solvency ratio.
    B. long-term solvency ratio.
    C. profitability ratio.
    D. turnover ratio.
    33. Fixed assets turnover ratio is a
    A. short-term solvency ratio.
    B. long-term solvency ratio.
    C. profitability ratio.
    D. turnover ratio.
    34.The ratio which measures the profit in relation to capital employed is known as
    A. return on investment.
    B. gross profit ratio.
    C. operating ratio.
    D. operating profit ratio.
    35. The ratio which determines the profitability from the shareholder’s point of
    view is .
    A. return on investment.
    B. gross profit ratio.
    C. return on shareholders funds.
    D. operating profit ratio.
    36.Return on equity is also called
    A. return on investment.
    B. gross profit ratio.
    C. return on shareholders funds.
    D. return on net worth.

    Page 9

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE 45
    Subject: Management Accounting Subject code: B305FM Class: SY BBA
    PROF. MUBINA ATTARI www.dacc.edu.in
    37. Preliminary expenses is an example of
    A. fixed assets.
    B. current assets.
    C. fictitious assets.
    D. current liabilities.
    38. Prepaid expenses is an example of .
    A. fixed assets.
    B. current assets.
    C. fictitious assets.
    D. current liabilities.
    39. The ratio which is calculated to measure the productivity of total assets is
    A. return on equity.
    B. return on share holders funds.
    C. return on total assets.
    D. return on equity share holders’ funds.
    40. The ratio which shows the proportion of profits retained in the business out of
    the current year’s profits is
    A. retained earnings ratio.
    B. pay out ratio
    C. earnings per share.
    D. price earnings ratio.
    41. The ratio which indicates earnings per share reflected by the market price is .
    A. retained earnings ratio.
    B. pay out ratio.
    C. earnings per share.
    D. price earnings ratio.

    Page 10

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