Explore topic-wise MCQs in Fi ce (MCQ) Questions and answers.

This section includes 93 Mcqs, each offering curated multiple-choice questions to sharpen your Fi ce (MCQ) Questions and answers knowledge and support exam preparation. Choose a topic below to get started.

51.

Standard costing committee is responsible for

A. Computation of variances
B. Linking the deviations with responsibilities
C. Setting all types of standards
D. All of the above
Answer» E.
Discussion
52.

Match the columnsA) Activity Ratio -------------------- i) (Actual hours worked / Budgeted hours) * 100B) Capacity Ratio ------------------ ii) (Standard hours of actual production / Actual hours worked) * 100C) Efficiency Ratio ----------------- iii) (Standard hours for actual output / Budgeted hours) * 100

A. A-ii, B-iii, C-i
B. A-i, B-ii, C-iii
C. A-iii, B-i, C-ii
D. None of the above
Answer» D. None of the above
Discussion
53.

Semi-variable expenses increases with the increase in the level of activity,

A. In the same proportion as the activity increases
B. Not in the same proportion as the activity increases
C. In inverse proportion of activity increase
D. None of the above
Answer» B. Not in the same proportion as the activity increases
Discussion
54.

Given estimated sales in February, March, April, May and June are Rs 90,000, Rs 96,000, Rs 54,000, Rs 87,000 and Rs 63,000.In case 50% of sales are realized in the next month and balance in the next of next month, determine cash collection from sales in April and May.

A. Rs 93,000 and Rs 75,000
B. Rs 93,000 and Rs 70,500
C. Rs 75,000 and Rs 70,500
D. None of the above
Answer» B. Rs 93,000 and Rs 70,500
Discussion
55.

Which of the following statements are true about Standard Costing? A) It controls certain elements of cost affecting production and sales.B) It creates cost consciousness among workers.C) It plays no role in forecast of production cost, profit and sales. D) It follows principle of management by exception at operational level.

A. A and B
B. B and C
C. A and D
D. B and D
Answer» E.
Discussion
56.

Which of the following are not the objectives of Budgeting?A) To express the objectives of the firms in qualitative terms. B) To prepare base for evaluation of work performance.C) To co-ordinate organizational and managerial units of the firm.D) To develop a strong appraisal of objectives and policies of firm.

A. A, B and C
B. B, C and D
C. D, C and A
D. None of the above
Answer» E.
Discussion
57.

The management accounting can be stated an extension ofA) Cost AccountingB) Fi cial Accounting C) Responsibility Accounting

A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
Answer» E.
Discussion
58.

Which of the following statements are true about Horizontal Analysis?A) It does not examine the periodical trend.B) It is useful for long-term analysis.C) It is useful for long term planning.

A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
Answer» D. A, B, C
Discussion
59.

Which of the following statements are true?A) Comparative fi cial statement is an example of horizontal analysis.B) Trend Analysis is an example of vertical analysis.C) Cash flow analysis is an example of horizontal analysis.

A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
Answer» C. Both B and C
Discussion
60.

Which of the following are current assets?A) Fixed investments B) Trade PayablesC) Short-term loans and advancesD) Furniture

A. Only A
B. Only B
C. Only C
D. A, B, C and D
Answer» D. A, B, C and D
Discussion
61.

Which of the following statements are true?A) Cash flow statement is more useful for short term cash planning. B) Funds Flow statement is more useful in planning medium term and long term fi cing.C) Cash Flow statement discloses the position of liquidity in a better way.

A. Only A
B. Only B
C. Only C
D. A, B and C
Answer» E.
Discussion
62.

Standard costs are better than historical costs because

A. Determination of standard costs is economical in terms of money as well as time
B. They facilitate delegation of responsibility
C. They help in timely action against extravagances
D. All of the above
Answer» E.
Discussion
63.

Which of the following is true about management accounting?A) Management accounting is associated with presentation of accounting data.B) Management accounting is extremely sensitive to investors needs.

A. Only A
B. Only B
C. Both A and B
D. None of the above
Answer» B. Only B
Discussion
64.

The management auditor s work begins

A. After the work of a statutory auditor ends
B. Before the work of a statutory auditor begins
C. Varies from firm to firm
D. None of the above
Answer» B. Before the work of a statutory auditor begins
Discussion
65.

Which of the following are cash flow from operating activities?A) Cash Receipts from customersB) Cash Paid to Supplier and EmployeesC) Purchase of fixed assetsD) Sale of fixed assets

A. Both A and B
B. Both A and C
C. Both B and C
D. Both C and D
Answer» B. Both A and C
Discussion
66.

Which of the following statements are true about marginal costing?A) Marginal costing is not an independent system of costing.B) In marginal costing all elements of cost are divided into fixed and variable components.C) In marginal costing fixed costs are treated as product cost.D) Marginal costing is not a technique of cost analysis.

A. A and B
B. B and C
C. A and D
D. B and D
Answer» B. B and C
Discussion
67.

Which of the following statements are not true?A) In standard costing standards relies on technical assessment whereas budgetary targets are based on past actual adjusted to future trend.B) The scope of standard costing is much wider than budgetary control. C) Budgetary control demands functional coordination whereas it is not the case with standard costing.D) Standard costing prescribes a monetary limit which cannot be crossed.

A. A and B
B. B and D
C. C and D
D. A and C
Answer» E.
Discussion
68.

Match the columnsA) Taxes Paid --------------------------------- i) Cash flow from investing activities B) Repayment of loans ------------------- ii) Cash flow from operating activitiesC) Sale of fixed assets -------------------- iii) Cash Flow from fi cing activities

A. A-ii, B-iii, C-i
B. A-i, B-ii, C-iii
C. A-iii, B-i, C-ii
D. A-i, B-iii, C-ii
Answer» B. A-i, B-ii, C-iii
Discussion
69.

Which of the following statements are false?A) When all the figures in a balance sheet are stated as percentage of the total, it is termed as horizontal analysis. B) When fi cial statements of several years are analyzed, it is termed as vertical analysis.C) Vertical Analysis is also termed as dynamic analysis.

A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
Answer» C. Both B and C
Discussion
70.

Which of the following are the assumptions of marginal costing?A) All the elements of cost can be divided into fixed and variable components.B) Total fixed cost remains constant at all levels of output.C) Total variable costs varies in proportion to the volume of output.D) Per unit selling price remain unchanged at all levels of operating activity.

A. A and B
B. B and C
C. A and D
D. A, B, C and D
Answer» E.
Discussion
71.

To establish an effective system of standard costing it is essential that A) The technical process of operation should be prone to planningB) The cost of the products should be givenC) The process or operating costs of products should be providedD) The standard costing should be consistent with the technical procedure of the production of the specific entity

A. A, B and C
B. A, C and D
C. B, C and D
D. D, C and A
Answer» C. B, C and D
Discussion
72.

When the concept of ratio is defined in respect to the items shown in the fi cial statements, it is termed as

A. Accounting ratio
B. Fi cial ratio
C. Costing ratio
D. None of the above
Answer» B. Fi cial ratio
Discussion
73.

The definition, The term accounting ratio is used to describe significant relationship which exist between figures shown in a balance sheet, in a profit and loss account, in a budgetary control system or in a any part of the accounting organization is given by

A. Biramn and Dribin
B. Lord Keynes
C. J. Betty
D. None of the above
Answer» D. None of the above
Discussion
74.

Which of the following statement is true about Funds Flow Statement?A) It highlights change in funds of a firm at different point B) It highlights change in funds of different firms at a single pointC) It highlights change in funds of different firms at different pointD) It doesn t highlights change in funds

A. Only A
B. Only B
C. Only D
D. A, B, C, D
Answer» E.
Discussion
75.

The relationship between two fi cial variables can be expressed in:

A. Pure ratio
B. Percentage
C. Rate or time
D. Either of the above
Answer» E.
Discussion
76.

In the context of Funds Flow Analysis, the word funds is used to define

A. Net Working capital
B. Total current assets-Total current liabilities
C. Both a and b
D. None of the above
Answer» D. None of the above
Discussion
77.

As per Accounting Standard-3, Cash Flow is classified into

A. Operating activities and investing activities
B. Investing activities and fi cing activities
C. Operating activities and fi cing activities
D. Operating activities, fi cing activities and investing activities
Answer» E.
Discussion
78.

The objectives of Cash Flow Statement areA) Analysis of cash position B) Short-term cash planningC) Evaluation of liquidityD) Comparison of operating Performance

A. Both A and B
B. Both A and C
C. Both B and D
D. A, B, C, D
Answer» E.
Discussion
79.

Standard costing is the preparation of standard costs and their comparison with _______and the analysis of ________.

A. Marginal costs, Variances
B. Variances, Marginal costs
C. Actual costs, Variances
D. Variances, Actual costs
Answer» D. Variances, Actual costs
Discussion
80.

For the application of standard costing, it is necessary to meet which of following conditions? A) A sufficient volume of standard components or products should be manufacturedB) Methods and procedures cannot be controlledC) A sufficient number of costs should be able to be controlled

A. A and B
B. B and C
C. A and C
D. None of the above
Answer» B. B and C
Discussion
81.

Which of the following statements are true?A) Vertical Analysis is also termed as dynamic analysis. B) Horizontal analysis is also termed as dynamic analysis.C) Static Analysis is not extremely useful for the long-term fi cial planning.

A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
Answer» D. A, B, C
Discussion
82.

Which of the following statements are true?A) Funds Flow statement is one of the ways to analyse & interpret fi cial statements.B) Cash Flow Statement is one of the ways to analyse & interprets fi cial statements.C) Common-size statement is one of the ways to analyse & interpret fi cial statements.

A. Both A and B
B. Both A and C
C. Both B and C
D. A, B, C
Answer» E.
Discussion
83.

Which of the following are limitations of ratio analysis?A) Ratio analysis may result in false results if variations in price levels are not considered. B) Ratio analysis ignores qualitative factors.C) Ratio Analysis ignores quantitative factors.D) Ratio Analysis is historical analysis.

A. A, B and D
B. A, C and D
C. A, B and C
D. A, B, C, D
Answer» B. A, C and D
Discussion
84.

Which of the following falls under Profitability ratios?A) General Profitability ratios B) Overall Profitability ratiosC) Comprehensive Profitability ratios

A. A and B
B. A and C
C. B and C
D. None of the above
Answer» B. A and C
Discussion
85.

Which of the following transactions will result in inflow of funds?A) Issue of debentures B) Conversion of debentures into equity sharesC) Redemption of long term loanD) Creation of General Reserve

A. Only A
B. Only D
C. A and D
D. A, B, C and D
Answer» B. Only D
Discussion
86.

During the year, a business was bought by issue of Rs 25,000 debentures and Rs 25,000 shares.The business bought had machine worth Rs 20,000, Debtors Rs 15,000, Stock Rs 5,000 and Creditors Rs 5,000. Determine the effect of this transaction on flow of funds.

A. Net outflow of Rs 15,000
B. Net inflow of Rs 15,000
C. Neither inflow nor outflow
D. None of the above
Answer» C. Neither inflow nor outflow
Discussion
87.

Which of the following statements are true? A) Cash flow reveals only the inflow of cash.B) Cash flow reveals only the outflow of cash.C) Cash flow is a substitute for income statement.D) Cash flow statement is not a replacement of funds flow statement.

A. Only A
B. Only B
C. Both B and C
D. Only D
Answer» E.
Discussion
88.

Which of the following statements are true?A) Absorption costing helps in preparation of fixed budget.B) Absorption costing is dependent on level of level of output.C) Absorption costing is very helpful in taking managerial decisions.D) Absorption costing helps to conform with accrual and matching concept.

A. A and B
B. B and C
C. A and D
D. B and D
Answer» E.
Discussion
89.

Pertaining to the differential cost systems, which of the following statements are true?A) Differential cost plus differential income shows net loss or net incomeB) Differential cost is ascertained by comparing total costs of each alternative.C) Differential cost related to differential investments is calculated every time.

A. Only A
B. Only B
C. Only C
D. A, B, C
Answer» C. Only C
Discussion
90.

Standard costs are useful in

A. Establishing budgets
B. Supporting cost reduction measures
C. Simplifying cost procedures and expediting cost reports
D. All of the above
Answer» E.
Discussion
91.

Which of the following statements are not true?A) Standard costs are of forward nature while historical costs are actual in nature. B) Historical costs are useful for control purposes while standard costs are not.C) Standard cost is an important tool for measurement of operational efficiency while historical costs are not related to operational efficiency. D) Standard costs are not reasonably attainable ideal costs.

A. A and B
B. B and C
C. A and C
D. B and D
Answer» E.
Discussion
92.

Which of the following are assumptions for break-even analysis?A) Elements of cost cannot be divided in different groups.B) Fixed cost remains certain from zero production to full capacity. C) Behavior of different costs is linear.D) Selling per price unit remains constant.

A. A, B, C
B. B, C, D
C. A, C, D
D. A, B, D
Answer» C. A, C, D
Discussion
93.

Fi cial control report comes under

A. Dynamic fi cial reports
B. Static fi cial reports
C. Extensive Activity report
D. None of the above
Answer» B. Static fi cial reports
Discussion