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Management Accounting MCQs | Multiple Choice Questions and Answers | Chapterwise MCQs

 Management Accounting Multiple Choice Questions and Answers (MCQs)
For B.Com / BBA / MBA / CMA / CA / CS examination

In this exclusive page, you will get chapter wise Management Accounting MCQs for various exams.

Choose the correct option (Multiple choice questions and answers)

1. Management accounting deals with which information?

a) Qualitative

b) Quantitative

c) Both

d) None of the above

2. Management accounting provides valuable services to management in performing:

a) Coordinating

b) Controlling

c) Planning

d) All managerial functions

3. Which of the following are tools of management accounting?

a) Standard Costing

b) Marginal Costing

c) Budget and Budgetary control

d) All of the above

4. Which of the following are not the tools of management accounting?

a) Funds flow statement

b) Cash Flow Statement

c) Ratio analysis

d) Process costing

5. Which of the following are tools of management accounting?

a) Financial Planning

b) Analysis of financial statements

c) Historical cost accounting

d) All of the above

6. Management accounting is suitable for:

a) Small trading organisation

b) Large industrial and trading organisation

c) NPOs

d) Co-operative societies

7. Management accounting is a structure for:

a) Cost Accounting

b) Financial accounting

c) Decision making

d) Budgeting

8. Management accounting and cost accounting are:

a) Contradictory in nature

b) Complementary in nature

c) Neutral in effect

d) None of the above

9. Who coined the concept of management accounting?

a) James H. Bliss

b) R. N. Carter

c) Philip Cotler

d) F. W. Taylor

10. Management accounting maintains

a) Journal

b) Ledger

c) Trial Balance

d) None of these

Fill in the blanks:

1.       Management accounting is related with presentation of accounting data.

2.       Management accounting assists the management in creation of policy.

3.       Management accounting is suitable for large industrial and trading organizations.

4.       Management accounting is a structure for decision making.

5.       Management accounting is an offshoot (branch on a plant) of cost and financial accounting.

6.       Management accounting is also known as managerial accounting.

7.       Management accounting is simply a use of financial and cost accounting data in taking various managerial decisions.

8.       The use of management accounting is optional.

9.       Management accounting is subjective in nature.

10.   Management accounting is basically concerned with accounting information which is useful to management.

11.   Management Accounting is based on accounting information.

12.   Financial accounting is governed by GAAP.

13.   Management accounting is a tool of management but not a substitute of management.

14.   Management accounting analysis accounting data with the help of tools and techniques.

15.   Management accounting deals with both quantitative and qualitative information.

16.   Only Quantitative information is recorded in accounting.

17.   Accounting is an art of recording financial transactions.

18.   Management Accountant is Superior in position to Cost Accountant.

19.   Management accounting and cost accounting are complementary in nature.

20.   Accounting information is analysed and interpreted to make it useful.

21.   Management Accounting supplies information to the management so that later may be able to discharge all its functions properly.

22.   Standard costing is a cost control method used in management accounting.

23.   Management accounting helps in analysis and interpretation of data.

24.   Management accounting uses no fixed norms in its function.

25.   The accounting data are analysed by the management for effective planning and decision making.

26.   The management accountant is a member of management team.

27.   Management accounting system cannot be installed without financial and cost accounting system.

28.   The scope of management accounting is wider than that of cost accounting.

29.   Management accounting assures maximum return on capital employed.

30.   Revaluation accounting is also known as replacement or price level accounting.

State whether the following statements are true or false:

1.       The origin of management accounting is due to limitations of financial accounting and cost accounting. True

2.       The term management accounting was first coined in the year 1981.               False, 1950

3.       Management accounting is basically concerned with accounting information which is useful to management.                        True (Definition by R. N. Anthony)

4.       Management Accounting and Cost Accounting are Synonymous.      False

5.       Management accounting provides decision to management.              False, information

6.       Management accounting provides only data which is helpful to the management in decision making, not the decisions.    True

7.       Management accounting is a technique of selective nature.                True

8.       Management accounting is not helpful to management in discharging its functions. False

9.       Management accounting is based on the past records provided by financial and cost accounting for making decision for the future. True

10.   Management accounting is mainly concerned with future.   True

11.   The use of management accounting is compulsory. False

12.   Who coined the concept of management accounting? James H. Bliss

13.   Management accounting is objective in nature.         False

14.   Publication of Management Accounting Report is not compulsory.                   True

15.   Management Accounting is concerned with accounting information that is useful to the management.  True

16.   Management accounting deals only with the information which is useful to the management. True

17.   In management accounting, only those figures are used which can be measured in monetary terms.                        False

18.   Management accounting deals with both qualitative and quantitative information. True

19.   Management accounting will not provide information in a prescribed proforma like that of financial accounting.                        True

20.   Management accounting analyse the effect of different variables on the profits and profitability of the concern.      True

21.   The main objective of management accounting is to help the internal management.               True

22.   Management accounting is a structure of decision making.  True

23.   In management accounting no emphasis is given to the actual figures.           True

24.   Management accounting uses historical data for planning and forecasting.   True

25.   Management accounting is not bound by the accounting standards.                True

26.   Period of reporting in management accounting may be weekly, fortnightly and monthly.      True

27.   Auditing of management accounting is compulsory.                False

28.   Management accounting needs cost and financial accounting as its base for its installation.  True

29.   Management accountant is senior in position to cost accountant.     True

30.   Management accounting information is used by the management only.        True

31.   In management accounting, approximate figures presented timely are more important than accurate figures presenting late. True

32.   Management accounting is based on double entry system. False

33.   Financial statements are only interim reports.            True

34.   Management accounting is only a blend of financial and cost accounting.      True

35.   Accountability is one of the concepts of management accounting.    True

MCQ on Funds Flow Statement (☝BACK TO TOP☝)

1.       Any transaction that increases working capital is a application of fund.

2.       Repayment of borrowing causes cash Outflow.

3.       Machinery sold for cash is an application of fund.                      False, source

4.       Funds flow statements are based upon accrual basis of accounting.

5.       Building sold on credit is a source of fund.                                                    False

6.       Depreciation of machinery is a source of funds.                                                         True

7.       In a Funds Flow Statement, all receipts are treated as source of funds.

8.       Purchase of plant will mean decrease in working capital.

9.       Funds flow statement is also known as a statement of Sources and Applications of funds.

10.   Which statement is prepared in the process of funds flow analysis?

a) Schedule of changes in working capital

b) Funds Flow statement

c) Calculation of funds from operations

d) All of the above

Also Read: MCQ on Funds Flow Statement

MCQ on Cash Flow Statement (☝BACK TO TOP☝)

1.       Issue of equity shares in a cash flow from financing activities.

2.       Cash flow statement is useful for short-term financial analysis.          True

3.       Cash Flow Statement is a substitute of Cash Account.             False

4.       Cash Flow Statement is based upon accrual basis of accounting.        False, Cash Basis

5.       Cash Flow Statement is a statement of sources and application of cash during a particular period of time.      True

6.       cash flow statement is also known as statement of cash flows.          True

7.       Income from investment is a cash flow from Investing activities.

8.       Cash receipt from issue of shares is a Financing activity.

9.       Repayment of borrowing causes cash Outflow.

10.   Decrease in creditor is outflow of cash.

11.   Goodwill is a non-cash transaction.

Also Read: MCQ on Cash Flow Statement Full Article

MCQ on Marginal Costing (☝BACK TO TOP☝)

1.       Contribution is the difference between sales and total cost of sales.               False, sales -vc

2.       In marginal costing, the problem of over and under absorption of overhead is avoided.         True

3.       Margin of Safety = Fixed Cost/PV Ratio.        False

4.       P/V ratio can be improved by reducing the fixed cost.                            False

5.       Fixed cost per unit Decreases when volume of production increases.

6.       Variable cost per unit remains same/increases/decreases due to increase in production.

7.       The practice of charging all costs to product is marginal costing/absorption costing/standard costing.

8.       P/V ratio exhibits the percentage of contribution included in Sales

9.       Margin of safety can be improved by reducing the variable cost.

10.   Contribution is the difference between sales and variable.

11.   Margin of safety can be improved by reducing the Variable cost.

12.   P/V ratio exhibits the percentage of contribution included in Sales.

13.   In marginal costing system, fixed cost is considered as Period cost.

14.   In marginal costing system, variable cost is considered as product cost.

15.   Profit changes in the same proportion of the changes in contribution.                            False

16.   At break-even point, the company earns only a marginal profit.                         False

17.   Break-even analysis is also known as CVP analysis.

Also Read: MCQ on Marginal Costing Full Article

MCQ on Budget and Budgetary Control (☝BACK TO TOP☝)

1.       Budget is related to a definite future period.                                                              True

2.       Budgeting may be said to be an act of determining costing standards.             False     

3.       A system of budgetary control cannot be used in an organization where standard costing is in use.   False

4.       Budgetary control is a system of controlling cost.                                                      True

5.       Master budget is a summary of all functional budgets.

6.       Budgetary Control is a system of controlling Cost.

7.       A budget manual spells out Duties and Responsibilities of various executives concerned with budget.

8.       Flexible budget is a capacity budget.

9.       Budgetary control is a system of controlling cost.

10.   Zero-base budgeting was first used by carter.

Also Read: MCQ on Budget and Budgetary Control Full Article

MCQ on Standard Costing (☝BACK TO TOP☝)

1.       Standard cost is a predetermined cost.

2.       Material Cost Variance = Material Price Variance x Material Usage Variance.                False

3.       Marginal Cost = Total Cost – Variable Cost.                   False, Fixed Cost

4.       Idle Time Variance = Idle Hours x Standard Rate.                       False

5.       The difference between actual cost and standard cost is known as differential cost.   Variance

6.       Direct Labour Cost Variance = Standard Cost for actual production x actual Cost of Production.

Also Read: MCQ on Standard Costing

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