BCom Third Year (Sem 5 & 6) Management Accounting – Daily Revision MCQ (English Medium)
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Which statement about management accounting is correct?
Chapter 1: Nature and Scope of Management Accounting
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Answer: C. It is not compulsory by law and has no fixed format; it is prepared as management needs
Management accounting is optional and internal: reports are prepared in whatever form and frequency managers need, unlike statutory financial accounts.In trend analysis of financial statements, the figures of the base year are taken as:
Chapter 2: Analysis of Financial Statements
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Answer: A. 100
Trend percentages express each year's figure relative to a base year whose figure is taken as 100.Long-term debt is ₹3,00,000 and shareholders' funds are ₹6,00,000. What is the debt-equity ratio?
Chapter 3: Ratio Analysis
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Answer: D. 0.5 : 1
Debt-equity ratio = Long-term debt ÷ Shareholders' funds = 3,00,000 ÷ 6,00,000 = 0.5 : 1.Cost of goods sold is ₹6,00,000. Opening inventory is ₹1,00,000 and closing inventory is ₹2,00,000. What is the inventory turnover ratio?
Chapter 3: Ratio Analysis
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Answer: B. 4 times
Average inventory = (1,00,000 + 2,00,000) ÷ 2 = 1,50,000; inventory turnover = 6,00,000 ÷ 1,50,000 = 4 times.For a non-financial company, dividend paid to shareholders is shown in the cash flow statement under:
Chapter 4: Cash Flow Statement
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Answer: C. Financing activities
For a non-financial company, dividends and interest paid are financing activities, as they are returns on the funds raised.Under the indirect method of finding cash from operating activities, depreciation is added back to net profit because:
Chapter 4: Cash Flow Statement
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Answer: A. It is a non-cash expense
Depreciation reduces profit but involves no outflow of cash, so it is added back to net profit under the indirect method.Which of the following transactions results in a flow of funds (a change in working capital)?
Chapter 5: Fund Flow Statement
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Answer: B. Issue of equity shares for cash
Issue of shares for cash involves a non-current item (share capital) and a current item (cash), so working capital rises; the others touch only current or only non-current items.Actual sales are ₹5,00,000 and break-even sales are ₹3,00,000. What is the margin of safety?
Chapter 6: Marginal Costing and Cost-Volume-Profit Analysis
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Answer: D. ₹2,00,000
Margin of safety = Actual sales − Break-even sales = 5,00,000 − 3,00,000 = ₹2,00,000.A budgeting method in which every activity must be justified afresh, as if starting from nothing, without relying on last year's figures, is called:
Chapter 7: Budgets and Budgetary Control
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Answer: C. Zero-base budgeting
In zero-base budgeting, no expenditure is carried forward automatically; each activity is evaluated and justified from zero every period.Standard quantity of material for the actual output is 1,000 kg and actual quantity used is 1,100 kg. The standard price is ₹5 per kg. What is the material usage variance?
Chapter 8: Standard Costing and Variance Analysis
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Answer: B. ₹500 adverse
Material usage variance = SP × (SQ − AQ) = 5 × (1,000 − 1,100) = −₹500, i.e. ₹500 adverse, since more material was used than the standard.
BCom Third Year (Sem 5 & 6): MCQ in other subjects
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