MBA Accounting MCQS

I want the sample Multiple Choice Questions MCQs of MBA Accounting so can you please provide me?

[Rajkumar Agarwal]

Ok, here I am providing you the sample Multiple Choice Questions MCQs of MBA Accounting

MBA Accounting MCQs

1) Management accounting highlights staff relationship with top management as well as other personnel.

a. True
b. False

2) Which of the following statements are true?

A) Financial statements are only interim report.
B) Financial statements are also known as annual records.
C) Financial statements are historic.

a. Both A and B
b. Both A and C
c. Both B and C
d. A, B, C

3) Certain assumptions are essential to prepare financial statements.

a. True
b. False

4) The only feasible purpose of financial management is

a. Wealth Maximization
b. Sales Maximization
c. Profit Maximization
d. Assets maximization

5) Financial management process deals with

a. Investments
b. Financing decisions
c. Both a and b
d. None of the above

6) In a variable growth model, the dividend is believed to grow at a constant pace forever after an initial growth period.

a. True
b. False



7) For a bond YTM is always equal to coupon rate.

a. True
b. False



8) Which ratio is considered as safe margin of solvency?

a. Liquid ratio
b. Quick ratio
c. Current ratio
d. None of the above

9) The ideal level of current ratio is

a. 4:2
b. 2:1
c. Both a and b
d. None of the above

10) Current ratio is stated as a crude ratio because

a. It measures only the quantity of current assets
b. It measures only the quality of current assets
c. Both a and b
d. Offerings dimension

11) Liquid ratio is also known as

a) Quick ratio
b) Acid test ratio
c) Working capital ratio
d) Stock turnover ratio

a. A and B
b. A and C
c. B and C
d. C and D

12) Stock is considered as a liquid asset as anytime it can be converted into cash immediately.

a. Yes
b. No



13) The ideal level of liquid ratio is

a. 3:3
b. 4:4
c. 5:5
d. All of the above

14) Debt-equity ratio is a sub-part of

a. Short-term solvency ratio
b. Long-term solvency ratio
c. Debtors turnover ratio
d. None of the above

15) Which of the following are applications of funds?

a. Payment of dividend on share capital
b. Payment of tax
c. Increase in working capital
d. All of the above

16) Which of the following are treated as long term investments?

a. Non-current investments
b. Trade Investments
c. Sinking fund investments
d. All of the above

17) In case of other enterprises cash flow arising from interest paid should be classified as cash flow from ________ while dividends and interest received should be stated as cash flow from _______.

a. Operating activities, financing activities
b. Financing activities, investing activities
c. Investing activities, operating activities
d. None of the above

18) Issue of bonus shares and conversion of debentures into equity are shown as a footnote to the Cash Flow Statement.

a. True
b. False



19) When a fixed asset is bought as hire purchase, interest element is classified under ______ and loan element is classified under________.

a. Operating activities, financing activities
b. Financing activities, investing activities
c. Investing activities, operating activities
d. None of the above

20) ___________ is not suitable where selling price is determined on the basis of cost-plus method.

a. Absorption costing
b. Marginal costing
c. Both a and b
d. None of the above

21) While making a pricing decision under Special price, if price is greater than marginal cost,

a. Acceptance and rejection depends on product type
b. Order should be rejected
c. Order should be accepted
d. None of the above

22) ABC Ltd manufactures a single product and sales for Rs 30 per unit. There is increased demand of the product. The Direct Material is Rs 8, Direct labour (2 hours) is Rs 4 and Variable overheads is Rs 4. The labour force is working at full capacity and no extra time is available. Mr. X has approached ABC Ltd with a request for manufacture special order at Rs 8,000. Also, 600 hours labour will be required and cost of the order will be Rs 3000 for Direct Material. Variable overhead per hour will be Rs 2. Should the order be accepted? Why?

a. Yes, Net Profit Rs 1,600
b. No, Net loss Rs 1,600
c. No, Net loss Rs 2,000
d. Yes Net Profit Rs 2,000

23) The few items of fixed costs which can be saved or eliminated by suspending the trading activities are

a. Escapable fixed costs
b. Special fixed costs
c. Suspension fixed costs
d. None of the above

24) While taking shut-down decisions, the amount of contribution should be compared with

a. Escapable fixed costs
b. Special costs
c. Net escapable fixed costs
d. None of the above

25) A decision regarding temporary closure should be made on

a. Cost data
b. Economic factors
c. Social factors
d. All of the above

26) When the temporary closure is warranted by the off-season, shut-down point is calculated as

a. Non-escapable expenses / Contribution per unit of raw materials
b. Avoidable expenses / Contribution per unit of raw materials
c. Special costs / Contribution per unit of raw materials
d. None of the above

27) Given fixed expenses Rs 20,000 and variable expenses of 10,000 units and 15,000 units are Rs 30,000 and Rs 45,000 respectively. Determine Differential cost, Differential cost p.u.

a. Rs 15,000, Rs 3
b. Rs 10,000, Rs 1
c. Rs 50,000, Rs 2
d. None of the above

28) Determine B.E.P in units and amount if Units produced if Rs 10,000, Fixed cost is Rs 40,000, Selling price is Rs 50 per unit and Variable cost us Rs 30 per unit.

a. Rs 40 per unit, Rs 2,00,000
b. Rs 50 per unit, Rs 10,00,000
c. Rs 20 per unit, Rs 1,00,000
d. None of the above

29) Estimate amount of profit if Sales is 10,000 units Fixed cost is Rs 50,000, Variable cost per unit is Rs 12 and selling price per unit is Rs 20.

a. Rs 12,000
b. Rs 5,000
c. Rs 30,000
d. None of the above

30) Calculate B.E.P capacity if Fixed cost is Rs 50,000, percentage of variable cost is 66 2/3% and capacity is Rs 3,00,000.

a. 25%
b. 30%
c. 50%
d. None of the above

31) When standard costs are used, the amount of detailed record keeping will normally

a. Reduce
b. Increase
c. Stay the same
d. None of the above

32) Which of the following method is based on technique of cash flow statement?

a. Cash Accounting Period
b. Projected Balance Sheet Method
c. Project forecast method
d. None of the above

33) As per Cash flow method, the amount of expected net operating cash profit during the fiscal is

a. Added to the opening balance of cash
b. Deducted from the opening balance of cash
c. Not included in cash budget
d. None of the above

34) The formula to estimate Labour Mix variance is

a. Total standard labour cost of actual output - Total actual cost of actual output
b. (Standard rate per hour - Actual rate per hour) * Actual Hours
c. (Revised standard time - Actual time) * Standard rate
d. Abnormal idle hours * Standard hourly rate

35) Idle hours are not deducted in

a. Labour efficiency variance
b. Labour rate variance
c. Both a and b
d. None of the above

36) The formula to estimate overhead cost variances is

a. Actual output * Standard overhead rate + actual variable overhead
b. Actual output * Standard overhead rate per unit - actual overhead cost
c. Actual output * Standard overhead rate per unit * actual overhead cost
d. None of the above

37) In a control report of Department X, it is mentioned as indirect materials are Rs 1,000, Indirect labour Rs 900, Overtime Charges Rs 100, Depreciation on equipment Rs 500, Allocated factory overhead (38% of factory space) Rs 4300, Allocated overhead of repair shop is Rs 1200. Determine total costs treating department X as a responsibility center.

a. Rs 3200
b. Rs 2200
c. Rs 1200
d. None of the above

38) In a company Department A recorded losses in the first half of the current year. The sale of department is Rs 90,000 and uncontrollable costs are Rs 91,000, Advice the management whether its operations should be continued or terminated.

a. Continued
b. Terminated
c. Insufficient information
d. None of the above

39) _________ is a monthly profit and loss account, wherein the actual results of the concerned month are compared with the budgeted figures of that month.

a. Master summary control report
b. Subsidiary summary control report
c. Interim summary control report
d. None of the above

40) __________ conveys detailed summary pertaining to various activities of the organization.

a. Master summary control report
b. Subsidiary summary control report
c. Interim summary control report
d. None of the above