Managerial Accounting MCQ Set-10

How Managerial Accounting Works

Managerial accounting encompasses many facets of accounting aimed at improving the quality of information delivered to management about business operation metrics. Managerial accountants use information relating to the cost and sales revenue of goods and services generated by the company. Cost accounting is a large subset of managerial accounting that specifically focuses on capturing a company’s total costs of production by assessing the variable costs of each step of production, as well as fixed costs. It allows businesses to identify and reduce unnecessary spending and maximize profits.

Managerial Accounting MCQ Set-10

141. Transferring the debit and credit item from the journal to the respective accounts is called

1. Compound Journal
2. Ledger
3. Trial balance
4. None of these

Correct answer: (B)
Ledger

142. A statement containing the various ledgers balances on particular date

1. Compound Journal
2. Ledger
3. Trial balance
4. None of these

Correct answer: (C)
Trial balance

143. Retained earnings will change over time because of several factors. Which of the following factors would explain an increase in retained earnings?

1. Net Loss
2. Net income
3. Dividend
4. Investment by share holder

Correct answer: (B)
Net income

144. The full disclosure principle, as adopted by the accounting profession, is best described by which of the following?

1. All information related to an entity’s business and operating objectives is required to be disclosed in the financial statements.
2. Information about each account balance appearing in the financial statements is to be included in the notes to the financial statements.
3. Enough information should be disclosed in the financial statements so a person wishing to invest in the stock of the company can make a profitable decision.
4. Disclosure of any financial facts significant enough to influence the judgment of an informed reader

Correct answer: (D)
Disclosure of any financial facts significant enough to influence the judgment of an informed reader

145. The trial balance is ______________

1. Is a formal financial statement.
2. Is used to prove that there are no errors in the journal or ledger.
3. Provides a listing of every account in the chart of accounts.
4. Provides a listing of the balance of each account in active use.

Correct answer: (D)
Provides a listing of the balance of each account in active use.

146. Investment in Bonds should be disclosed on the balance sheet.

1. On liability side of balance sheet
2. On Assets side of balance sheet
3. On both side of Balance sheet
4. None of these

Correct answer: (B)
On Assets side of balance sheet

147. Which of the following functions is managerial accounting intended to facilitate?

1. Planning
2. Decision making
3. Control
4. All of these

Correct answer: (D)
All of these

148. Accounting principles are

1. As definite as principles of physics and chemistry
2. Unlike principles of physical sciences.
3. Verifiable through observations and records
4. Thoughts of accountant

Correct answer: (B)
Unlike principles of physical sciences.

149. Business entity concept distinguishes between:

1. Individual and business
2. Business and business
3. Owners
4. Debtors and creditors

Correct answer: (A)
Individual and business

150. Financial account provide summary of:

1. Asset
2. Liability
3. Accounts

Correct answer: (C)
Accounts

151. User of financial statement is:

1. Management
2. Creditors
3. Bankers
4. All of the above

Correct answer: (D)
All of the above

152. Inventory accounts should be classified in which section of a balance sheet?

1. Current assets
2. Investments
3. Property, plant, and equipment
4. Intangible assets

Correct answer: (A)
Current assets

153. The Cash account on the balance sheet should not include which of the following items?

1. Travel advances to employees
2. Currency
3. Money orders
4. Deposits in transit

Correct answer: (A)
Travel advances to employees

154. In accounting all business transaction are recorded as having

1. Single aspect
2. Dual aspect
3. Triple aspect
4. None of these

Correct answer: (B)
Dual aspect

155. Which of the following equations properly represents a derivation of the fundamental accounting equation?
     Assets + liabilities = Owner Equity
     Asset = OwnerEquity
     Cash = Assets
     Assets – Liabilities = Owner Equity

1. Only (a)
2. Both (a) (b)
3. All (a)(b)(c)(d)
4. None of these

Correct answer: (D)
None of these

KEY TAKEAWAYS Managerial Accounting MCQ set-10