# Managerial Accounting MCQ Set-17

## 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-17

1. Financial account state the ______________ position of a concern.
1. Financial
2. Economic
3. Non financial
4. None of these

Financial

1. Which group of ratios relates profits to sales and investment?
1. Liquidity ratios
2. Debt ratios
3. Coverage ratios
4. Profitability ratios

Profitability ratios

1. Process that involves decision making with respect to investment in fixed asset
1. Valuation
2. Breakeven analysis
3. Capital budgeting
4. Material management decision

Capital budgeting

1. When a Bond’s Yield to Maturity is greater than the Bond’s Coupon Rate, the Bond
1. Is selling at a Premium
2. Has reached its Maturity Date
3. Is priced at Par
4. Is selling at a Discount

Is selling at a Discount

1. The ______________ is a common term for the market consensus value of the required return on a stock.
1. Dividend payout ratio
2. Intrinsic value
3. Market capitalization rate
4. Plowback rate

Market capitalization rate

1. Current ratio is 2:5.Current Liability is Rs.30,000.The Net working Capital is
1. Rs. 18,000
2. Rs. 45,000
3. Rs. (45,000)
4. Rs. (18000)

Rs. (18000)

1. ______________ means expanding the number of investments which cover different kinds of stocks.
1. Diversification
2. Standard deviation
3. Variance
4. Covariance

Diversification

1. What is the value of a \$1,000 Face Value Bond that has twenty years remaining to Maturity, 10 % Coupon (paid annually), and is priced to yield 6%?
1. \$ 980
2. \$ 1,000
3. 1,263
4. None

None

1. One of the problems with attempting to forecast stock market values is that
1. There are no variables that seem to predict market return
2. The earnings multiplier approach can only be used at the firm level
3. The level of uncertainty surrounding the forecast will always be quite high
4. Dividend payout ratios are highly variable

The level of uncertainty surrounding the forecast will always be quite high

1. Which of the following is a characteristic of a coupon bond?
1. Pays interest on a regular basis (typically every six months)
2. Does not pay interest on a regular basis but pays a lump sum at maturity
3. Total payment must be made at the end of period
4. All of above statement are correct

Pays interest on a regular basis (typically every six months)

1. When the market’s Required Rate of Return for a particular Bond is much less than its Coupon Rate, the Bond is selling at
2. Discount
3. Par
4. Face

1. ______________ is responsible for financial inventory, management, financial planning etc.
1. Shareholders
2. Treasurer
3. Controller
4. Board of Directors

Treasurer

1. Which group of ratios measures a firm’s ability to meet short-term obligations?
1. Liquidity ratios
2. Debt ratios
3. Coverage ratios
4. Profitability ratios

Liquidity ratios

1. Which one of following is not Direct Claim Security?
1. Bonds
2. Option
3. Shares
4. Stock

Option

1. ABC’s and XYZ’s debt-to-total assets ratio is 0.4. What is its debt-to-equity ratio?
1. 0 .2
2. 0 .77
3. 0.667
4. 0.333