Management Accounting Exam Paper - 1

Question: Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C is an example of_______
Correct Answer: Error of Commission

Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________
Correct Answer 12750

Question This is not the non-monetary incentive.
Correct Answer Co-partnership

Question Omission of posting an amount in the ledger
Correct Answer Error of Omission

Question It is an appropriate basis of apportionment of depreciation expenditure
Correct Answer value of assets

Question If wages for the month of January, February and March are Rs.4,000, Rs.4,400 and Rs.4,600 respectively and if delay in payment of wages is ½ month , payment of wages for the month of February is
Correct Answer 4,200

Question: Labor cost indicates that labor cost which cannot be identified with the individual cost center and is incurred for those employees who are not engaged in the manufacturing process but only assist i
Correct Answer: Remuneration

Question For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased
Correct Answer 3,15,000

Question Important advantages of Uniform Costing can be said to be
Correct Answer It is a useful tool for management control, It avoids cut throat competition, Weaker units can take advantage of settled systems of better managed units

Question P/L A/C debit side includes
Correct Answer salary, discount allowed, postage & telegram

Question Actual costs may be affected due to inefficient functioning such as
Correct Answer Abnormal expenses, In efficient use of labor, In efficient use of material

Question Calculate Labor Efficiency Variance, If actual rate per hour is Rs.3.50/-, Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500.
Correct Answer Rs.4500/- (Favorable)

Question Sales quantity may be forecasted after taking into consideration various factors such as
Correct Answer Analysis of past trends, Market research, Reports by salesmen

True/False
Question: To take make or buy decision under the marginal costing, if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition.
Correct Answer: False

Question Credit balances in all the Personal & Real accounts appear on asset side.
Correct Answer False

Question The process of accounting split into three steams i.e. financial, cost, management accounting.
Correct Answer True

Question Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer True

Question The variable costs are controllable at the lower level.
Correct Answer True

Question Balance sheet indicates the expenditure & income from the business.
Correct Answer False

Question For taking make or buy decision marginal costing technique provide useful assistance.
Correct Answer True

Question Profitability statement indicates the amount of assets & liabilities.
Correct Answer False

Question A business is an activity carried out with the intention of earning the profit.
Correct Answer True

Question Non-operating / financial expenses are added while calculating net profit.
Correct Answer False

Question Bin Card is having all the information of item received and issued.
Correct Answer False

Question Budget is prepared for a fixed period of time.
Correct Answer True

Question A very wide scope of Management Accounting is the limitation by itself.
Correct Answer True

Question Due to errors of principle the arithmetical accuracy of the trial balance does not get affected.
Correct Answer True

Question Balance sheet indicates the financial status of the business at given period.
Correct Answer True

Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts.
Correct Answer True

Question: Income received in advance transfer to current liabilities
Correct Answer: True

Select The Blank
Question: Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads
Correct Answer: actual, estimated

Question: Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match
Correct Answer reasons, pass book

Question Financial Accounting protects the interest of outsiders. it considers ________ transaction and it is a ________ requirement
Correct Answer historical, legal

Question Semi ________ overheads are neither ________ nor variable in nature.
Correct Answer fixed, variable

Question: Fixed cost is the cost that tend to remain ________ irrespective of ________
Correct Answer constant, level of activity

Question Management Accounting has a very ________ scope and it requires ________ organizational structure
Correct Answer wide, elaborate

Question A budget manual is a document setting out the ________ of the persons and ________ required for the budget control.
Correct Answer Responsibilities, Forms and procedures

Question Along with financial accounting, ________ and ________ are the other streams of accounting
Correct Answer Cost Accounting, Management Accounting

Question Budgetary Control is useful for ________-and ________-as a powerful tool in the hands of management
Correct Answer Cost control, Maximization of profits

Question Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management
Correct Answer uncontrollable, lower

Match The Following
Question Correct Answer
Journal Book of original entry
Ledger Maintain all types of Accounts
Assets All the properties owned by the business
Liabilities All the amount owed by the business
Drawing Withdrawn for personal use

Multiple Choice Multiple Answer
Question A Budget Manual may contain the following particulars
Correct Answer Duties and responsibilities of various executives, Functions and duties of Budget Officer, Scope of the Budget and area to be covered

Question Direct Cost includes
Correct Answer Direct material, direct labor, direct expenses

Question The material Requisition note contains
Correct Answer Number and date, Department demanding the material, Signature of the authority approving the demand

Question Following error affect the trial balance
Correct Answer wrong totaling of subsidiary books, Posting on the wrong side of an account, Omission of posting an account in the ledger

Question P/L A/C debit side includes
Correct Answer salary, discount allowed, postage & telegram