Managerial Accounting MCQ Set-7

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-7

91. The basic concepts related to p& l a/c are:

1. Realization Concept
2. Matching Concept
3. Cost Concept
4. Both a and b above

Correct answer: (D)
Both a and b above

92. All those to whom business owes money are:

1. Debtors
2. Investors
3. Creditors
4. Shareholders

Correct answer: (C)
Creditors

93. All direct & indirect expenses related to business are charged:

1. Profit and loss account
2. Trading account
3. Trading account Profit and Loss account
4. Directly to Balance sheet

Correct answer: (C)
Trading account Profit and Loss account

94. If loan have been guaranteed by managers and directors is called as

1. Loan
2. Unsecured Loan
3. Secured Loan
4. Advance by Manager & director

Correct answer: (C)
Secured Loan

95. Opening stock + ______________ + Direct Expenses (Carriage on Raw material)-Closing Stock = ______________

1. Sales, Purchases
2. Sales, Sales return
3. Purchases, Cost of goods produced
4. Purchases, Cost of goods sold

Correct answer: (C)
Purchases, Cost of goods produced

96. Carriage outward is charged to

1. Debit side Profit & Loss a/c
2. Debit side Trading a/c
3. Credit side of Profit & Loss a/c
4. Credit side of trading a/c

Correct answer: (A)
Debit side Profit & Loss a/c

97. Credit balance of profit & loss a/c shown on

1. Asset side of balance sheet
2. Liability side of balance sheet
3. Not shown in balance sheet
4. Half on asset side and half on liability side

Correct answer: (B)
Liability side of balance sheet

98. Outstanding expenses are charged to

1. Asset side of balance sheet
2. Liability side of balance sheet
3. Not charged to balance sheet
4. None of these

Correct answer: (B)
Liability side of balance sheet

99. Which of the following is a liability?

1. Loan from Mr.Y
2. loan to Mr.y
3. Both (a) (b)
4. None of these

Correct answer: (A)
Loan from Mr.Y

100. The revenue recognition principal dictates that all types of incomes should be recorded or recognized when

1. Cash is received
2. At the end of accounting period
3. When they are earned
4. When interest is paid

Correct answer: (C)
When they are earned

101. Which of the following is time span into which the total life of a business is divided for the purpose of preparing financial statements?

1. Fiscal year
2. Calendar year
3. Accounting period
4. Accrual period

Correct answer: (C)
Accounting period

102. If the total assets of the company amount to Rs 1,50,000 and owner’s equity is Rs 70,000,the amount of liabilities will be

1. Rs 70,000
2. Rs 80,000
3. Rs 90,000
4. Rs 1,00,000

Correct answer: (B)
Rs 80,000

103. The system of recording transaction based on dual aspect concept is called

1. Double account system
2. Double entry system
3. Single entry system
4. None of these

Correct answer: (B)
Double entry system

104. The convention of conservatism is applicable

1. In providing for discount on creditors
2. In making provision for bad doubtful debts
3. Providing depreciation
4. None of these

Correct answer: (B)
In making provision for bad doubtful debts

105. Rules of action or conduct adopted by the accountants universally while recording accounting transaction

1. Accounting convention
2. Accounting concepts
3. Accounting principles
4. None of these

Correct answer: (C)
Accounting principles

106. Which of the following items would not fall under the definition of an asset?

1. Land
2. Machine
3. Cash
4. Milk

Correct answer: (D)
Owner Equity

107. Basic assumptions or conditions upon which the science of accounting is based.

1. Accounting convention
2. Accounting concepts
3. Accounting principles
4. None of these.

Correct answer: (B)
Accounting concepts

108. Which of the following is time span into which the total life of a business is divided for the purpose of preparing financial statements?

1. Fiscal year
2. Calendar year
3. Accounting period
4. Accrual period

Correct answer: (C)
Accounting period

109. The system of recording based on dual aspect concept is called:

1. Double account system
2. Double entry system
3. Single entry system
4. All the above

Correct answer: (B)
Double entry system

110. Preliminary expenses are recorded in ______________

1. Equity and liabilities-Liability side of B/S
2. Current liabilities- Liability side of B/S
3. Fixed assets- Asset side of B/S
4. Asset side of B/S

Correct answer: (D)
Asset side of B/S

KEY TAKEAWAYS Managerial Accounting MCQ set-8