Question - 1/60

Products that consume resources in different proportions are known as _________________.

Answer Choices

Diverse products

Facility-level products

Unit-level products

Batch-level products

Question - 2/60
Which of the following step is not a part of Accounting Cycle?

Answer Choices

Prepare a Trial Balance

Prepare an Adjusted Trial Balance

Prepare a Post-closing Trial Balance

None of the Above

Question - 3/60
Which of the following options is not an assumption that the accountants make to accomplish the
purpose of accounting?

Answer Choices

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Internal Gap Assumption

Going Concern Assumption

Economic Entity Assumption

Monetary Unit Assumption

Question - 4/60
Which of the following statements is not correct?

Answer Choices

The Cash basis of accounting record liabilities when money is paid and records expenses when cash is
received.

The Cost principle provides that assets should be recorded and reported at the cost of
manufacturing the asset plus any depreciation.

Only Option 1 is incorrect

Both the options are incorrect

Question - 5/60
Which of the following is not true about Current Liability?

Answer Choices

Current Liability is an obligation that is reasonably expected to be satisfied within one year.

Long Term Debt maturing within three year is classified as Current Liability.

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Accounts payable to vendors and salary payable to employees are examples of Current Liability.

Taxes payable to Government authorities is an example of current Liability.

Question - 6/60
In accordance with the requirement of Stock Exchange, every company has to submit which of the
following documents to the Stock Exchange as soon as they are issued?

Answer Choices

Six copies of the Statutory and Directors' Annual Reports

Balance Sheets and Profit & Loss Accounts

All Periodicals and Special Reports

All of the Above

Question - 7/60
The difference between actual sales and the sales at break-even point is described as_________.

Answer Choices

Sales break-even

Margin of safety

Marginal sales break-even

Break-even point

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Question - 8/60
Which of the following is not a business asset?

Answer Choices

Current Assets

Intangible Assets

Long Term Investments

Equity Assets

Question - 9/60
Which of the following is true?

Answer Choices

You can tell a lot about what a company does if you have its chart of accounts.

Any change to the accounting equation must be accompanied by a second change.

Both the options are true

Both the options are not true

Question - 10/60
Which of the following is that main objective of Financial accounting?

Answer Choices

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To ascertain financial results and financial position and to provide information to various users.

To deal with all activities of the business and assess the overall performance.

To prepare the financial accounts for statutory and tax purposes.

To deal with specific activities, units, or departments of the enterprise.

Question - 11/60
Cash flow from operating activities would include:

Answer Choices

Cash inflows from sales or services

Cash inflows from the sale of property, facilities, equipment, or investments

Cash inflows from borrowings or stock issuances

All of the Above

Question - 12/60
Which of the following best describes 'Step Costs'?

Answer Choices

Costs that vary with activity in steps and may look like and be treated as either variable costs or
fixed costs.

Costs that are incurred in the past which cannot be changed by future decisions.

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A method of costing in which product costs include direct materials and labor.

Costs that stay the same per unit of steps but change in total as production increases.

Question - 13/60
Which of the following statements is true?

Answer Choices

Once an adjusted trial balance is prepared, financial statements can be generated.

After a period ends and financial statements are prepared, all temporary accounts must be reset
to their actual value for the start of next period.

Only Option 1 is true

Both the options are true

Question - 14/60
Which of the following best describes the process of preparing the statement of cash flows?

Answer Choices

The process of preparing the statement of cash flows involves the collection of information from a
company's comparative profitability ratios and the explanation of the changes in the annual
accounting statement.

The process of preparing the statement of cash flows involves the collection of information from a
company's comparative balance sheet and income statement and the explanation of the changes
in the account balances.

The process of preparing the statement of cash flows involves the collection of information from a
company's comparative loss history and income statement and the explanation of the changes in
the Profit and Loss account.

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The process of preparing the statement of cash flows involves the collection of information from a
company's comparative liquidity ratios and the explanation of the changes in the trial balance.

Question - 15/60
Investing activities include the purchase and sale of non current assets such as:

Answer Choices

Fixed Assets

Intangible Assets

Long Term Investments

All of the Above

Question - 16/60
Direct labor is that human effort ________

Answer Choices

Which represents all human effort required to perform manufacturing activity.

Which include indirect materials and indirect labor.

Which can be directly traced to the cost object by physical observation.

Which consists of those items of material, which are used in the process of production.

Question - 17/60
Which of the following best describes the concept of Relevant range?

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Answer Choices

The higher range of production that can achieve productivity for the company.

The normal range of production that can be expected for a particular product and company.

Which can be directly traced to the cost object by physical observation.

The relevant range of production that can achieve profitability for the product and the company.

Question - 18/60
Which of the following statements does not describes the purpose of the journal, ledger, and trial
balance?

Answer Choices

Accounting transactions are recorded in the general journal, which captures information
chronologically.

Information in the general journal is posted to the general ledger, which summarizes information
by account.

Balances from the general ledger are listed on the profit and gain statement which contains the
account balances contained in the trial balance.

All of the Above

Question - 19/60
Target costing is an approach to costing which identifies______________.

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Answer Choices

An estimated cost that the manufactures are willing to incur and then compute a target cost to
set the manufacturing cost.

An estimated price that the consumers are willing to pay and then compute a target cost to pay
the taxes.

An estimated price that the customers are willing to pay and then compute a target cost to earn
the desired profit.

An estimated price at which the organization is willing to sell and then compute a target cost to
earn the desired profit.

Question - 20/60
Which of the following is a non-current asset?

Answer Choices

Short-term loans and advances

Fixed assets

Inventories

Trade Receivables

Question - 21/60
For its most recent year company XYZ Limited had Sales (all on credit) of Rs. 9,75,000 and Cost of
Goods Sold is 8,50,000. At the beginning of the year its Accounts Receivable were 1,00,000 and its
Inventory was Rs. 1,60,000. At the end of the year its Accounts Receivable were Rs. 96,000 and its
Inventory was Rs. 2,00,000.
Based on the data above what is the Inventory turnover ratio of XYZ Limited for the year?

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Answer Choices

6.09

4.99

4.72

None of the above

Question - 22/60
Which of the following does not highlight the benefits of Activity Based Costing systems?

Answer Choices

Provide more and more accurate cost information for continuous improvement

Using ABC in the product pricing helps organization control the margin of error in production.

ABC also provides benefits related to the control function of managers.

Using ABC in the budgeting process provides more accurate estimates of the resources.

Question - 23/60
Which of the following statements is true about Activity-based costing (ABC)?

Answer Choices

Activity-based costing provides an alternative to traditional costing methods by allocating

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Activity-based costing allocates costs based on activities that drive overhead rather than simple
volume or unit based measures.

Both the above statements are true

Both the statements are not true.

Question - 24/60
Which of the following statements is true :

Answer Choices

Vertical integration is accomplished when a company is involved in multiple steps of the value
chain.

Resource utilization decision is a decision requiring an analysis of how best to use a resource that
is available in limited supply.

Both the statements are true

Only statement 1 is true

Question - 25/60
Which of the following statements is false?

Answer Choices

Trial Balance is a listing of transactions and their recoveries at a specific point of time.

A ledger is a collection of accounts and their balances.

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A Journal is a chronological record of transactions.

A company can examine its Journal to see whether a transaction was recorded correctly.

Question - 26/60
Which of the following represents the basic structure of the balance sheet statement?

Answer Choices

Liabilities = Assets + Equity

Assets = Liabilities + Equity

Both the options are true

Both the options are false

Question - 27/60
Which of the following statements is false:

Answer Choices

Horizontal analysis is an analysis of financial statements over time.

Trend Analysis is a horizontal analysis of multiple years of data.

Earnings per share is a key measure of performance that is often used to compare companies of
different size.

None of the Above

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Question - 28/60
Which of the following statements is true:

Answer Choices

One of the most important resources of any company is cash.

If a company cannot generate sufficient cash, its ability to continue operations is significantly
limited.

Only first statement is true

Both the statements are true

Question - 29/60
Volume based costing systems often result in __________________ .

Answer Choices

Overcosting low-volume products and undercosting high-volume products.

Overcosting high-volume infrastructure and undercosting low-volume services.

Overcosting low-volume balances and undercosting high-volume services.

Overcosting high-volume products and undercosting low-volume products.

Question - 30/60
The contribution margin income statement is structured to emphasize _______________.

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Answer Choices

Profit behavior as opposed to profit function

Production behavior as opposed to Production function

Cost behavior as opposed to cost function

Contribution behavior as opposed to Contribution function

Question - 31/60
A Multi step income statement calculates several subtotals of income which can include:

Answer Choices

Gross profit

Operating Profit

Net Income

All of the above

Question - 32/60
Which of the following statements is true about Fixed costs?

Answer Choices

Remain the same in total when production volume increases or decreases but vary per unit.

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Remain the same per unit, but change in total as production volume increases or decreases.

Both the statements are true

Only second statement is true.

Question - 33/60
A thorough understanding of ___________ is necessary before a manager can calculate and
understand a break-even analysis.

Answer Choices

Fixed and variable Costs

Fixed and manufacturing costs

Manufacturing and non-manufacturing costs

Total fixed costs and production costs

Question - 34/60
What will be the break-even point if XYZ Corporation has fixed costs of $ 25,50,000 and the
contribution margin per unit is $1250.

Answer Choices

20400

24040

2400

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2040

Question - 35/60
The financial statements of a company must be approved by:

Answer Choices

Board of Directors

Statutory Auditors

Both by Board of Directors and the Statutory Auditors

None of the Above

Question - 36/60
Which of the following is not a financial statement that is used to communicate economic information?

Answer Choices

Balance Sheet

Statement of Cash flows

Assets and Revenue Sheet

Statement of Retained Earnings

Question - 37/60
Prepayments are shown in the balance sheet as

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Answer Choices

Current Asset

Current Liability

Quick Liability

Quick Asset

Question - 38/60
Which of the following best describes the Accounting Information System (AIS)

Answer Choices

A transaction reporting system that reports financial data such as financial statements, customer
lists, and inventory records.

A transaction processing system that captures financial data resulting from accounting
transactions within a company.

An information system that makes sure data has been organized, processed, and summarized.

An information system that ensures that knowledge is shared and exploited so that it adds value
to an organization.

Question - 39/60
Which of the following statement is not correct?

Answer Choices

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Gross profit is the difference between sales and cost of goods sold.

The payment of Services and profit taxes is an important variable in target profit and other CVP
decisions if managers are to understand the bottom line effect of their decisions.

A thorough understanding of fixed and variable costs is necessary before managers can calculate
an understand a break-even analysis

All of the above statements are correct.

Question - 40/60
In any form of analysis involving projections of the future, certain assumptions must be considered.
Which of the of following option represent those assumption?

Answer Choices

Assumption that the sales price of the product will not change as volume changes.

Assumption that the number of units produced is equal to the number of units sold.

Both of the above

None of the above

Question - 41/60
Closing Process is the process of transferring all ______________ to the retained earnings account.

Answer Choices

Revenue

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Expense

Dividend account balances

All of the Above

Question - 42/60
Which of the following options best describes Opportunity Cost?

Answer Choices

Opportunity cost is the restriction that occurs when the capacity to manufacture a product or to
provide a service is limited in some manner.

Opportunity cost is the short-run pricing decision in which management must decide which sales
price is appropriate.

Opportunity costs are additional costs resulting from a decision.

Opportunity cost is the sacrifice of value from a missed opportunity.

Question - 43/60
Final Dividend is generally declared :

Answer Choices

At Company's Board's meeting

At an Annual General Meeting

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Before the Annual General Meeting

At any time the company wishes to declare

Question - 44/60
Which of the following statement is true?

Answer Choices

Activities are procedures or processes that cause work to be accomplished.

Product-level costs are the costs that are incurred each time a unit is produced.

Both the statements are true

Both the statements are not true.

Question - 45/60
Unpaid and Unrecorded expenses are called

Answer Choices

Prepaid expenses

Accrued expenses

Additional expenses

None of these

Question - 46/60
What is a constraint?

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Answer Choices

A constraint is a restriction that occurs when the capacity to manufacture a product or to provide
a service is limited in some manner.

A constraint is a restriction that occurs when the capacity to manufacture a product or to provide
a service is defined by the cost of manufacturing the product or providing the service.

A constraint is a management tool that deals with bottlenecks in production process.

A constraint is a management tool that deals with ascertain the organizations capacity to
manufacture a product or provide a service.

Question - 47/60
Which of the following statements is true ?

Answer Choices

Accounting information includes both financial and non financial information used by decision makers.

Financial accounting is primarily concerned with record keeping directed toward the preparation of
profit and loss account and balance sheet.

Only first statement is true

Both the statements are true

Question - 48/60
When a company pays dividends it is having what impact on its equity?

Answer Choices

Increasing its equity and requires a credit entry

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Increasing its equity and requires a debit entry

Decreasing its equity and requires a debit entry

No impact on equity and requires a normal entry

Question - 49/60
Which of the following statements is true?

Answer Choices

Sole proprietorship is a business owned by one person.

Partnership is a business that is formed when two or more proprietors join together to own a non
profit venture.

Corporation is a separate legal entity that is established by filing articles of incorporation in two
or more states.

Public Corporation is a legal entity in which ownership is available to both public and private
sector enterprises.

Question - 50/60
Which of the following statements best describes the Accounting Information System?

Answer Choices

A system of an economic event that affects a company's assets, liabilities or equity at the time of
the event.

The system that identifies, records, summarizes, and communicates the various transactions of a
company.

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A system that captures the list of accounts that a company uses to record its business activities.

None of the Above

Question - 51/60
Compute the Sales Price Variance using the following information:
Actual Sales Volume of Company ABC is 150 units. The Flexible budget sales price is $5,000
and the actual sales price is $5,250.

Answer Choices

$15, 375 (Favorable)

$37,500 (Unfavorable)

$15, 375 (Unfavorable)

$37,500 (Favorable)

Question - 52/60
Which of the following statements is true about a balance sheet?

Answer Choices

A company's assets, liabilities, and equity are reported on a balance sheet.

Because a balance sheet is reported at a specific point in time, it is often referred to as the
snapshot of a business.

Both the options are true

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Only option 1 is true

Question - 53/60
Economic resources of business that are expected to be of benefit in the future are referred to as

Answer Choices

Liabilities

Owner's equity

Withdrawals

Assets

Question - 54/60
For the purpose of profit planning, costs are classified into:

Answer Choices

Fixed Costs, Variable Costs and Manufacturing Costs

Fixed Costs, Variable Costs and Semi-variable Costs

Variable Costs, Semi- variable and Manufacturing Costs

Variable Costs, Semi- variable and Non-manufacturing Costs

Question - 55/60
For its most recent year company XYZ Limited had Sales (all on credit) of Rs. 9,80,000 and Cost of
Goods Sold of 8,75,000. At the beginning of the year its Accounts Receivable were 1,00,000 and its
Inventory was Rs. 1,60,000. At the end of the year its Accounts Receivable were Rs. 96,000 and its
Inventory was Rs. 2,50,000.
Based on the data above what is the Account Receivable Turnover Ration of XYZ Limited for the year?

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Answer Choices

10

4.88

None of the above

Question - 56/60
Companies can report their cash flows from operating activities using:

Answer Choices

Direct Method

Indirect Method

One of the above two methods

None of the above two methods

Question - 57/60
Which of the following statement is true about Management accounting?

Answer Choices

Cost Accounting has a wider scope as compared to Management Accounting

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Management accounting is an all-inclusive accounting information system which covers financial
accounting, cost accounting, and all aspects of financial management.

The purpose of management accounting is to determine and record cost of producing a product
or service.

Management accounting is based on the past and present facts and figures.

Question - 58/60
Which of the following is not an example of Coverage Ratios?

Answer Choices

Interest Coverage Ratio

Debt Coverage Ratio

Operating Coverage Ratio

All of the Above

Question - 59/60
Financial accounting information is focused on:

Answer Choices

The information needs of external users

The information needs of internal users

The information needs of all users

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The information needs of the management

Question - 60/60
A product should continue to be made internally if the _____________.

Answer Choices

Avoidable costs are less than the additional costs that will be incurred by buying or outsourcing.

Avoidable costs are more than the additional costs that will be incurred by buying or
outsourcing.

Opportunity costs are more than the additional costs that will be incurred by buying or
outsourcing.

Opportunity costs are less than the additional costs that will be incurred by buying or
outsourcing.

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 1. Purchase of machinery against issue of shares will be shown in which part of the cash
flows statement?

D - None of the above

2. Cashflows patterns when change of sign takes place more than once are know as
_____?
a. Non- Conventional cash flows

3. Operating expenses of Moon Ltd. are Rs 18000, interest expense Rs 5000, Tax paid Rs
4000. If sales is 35000 then calculate the Net Profit Margin?

A - 0.2285

4. Which kind of data is used in financial accounting

A – Past

5. Which of the following is an example of systematic risk?

D - Subprime-crisis of 2008

6. Calculate the expected return for Stock A based on the following information on
probability (p) of Returns (r). P=.3 r=10%, p=.4, r=15%, p=.3 r=8%.

B - 0.114\

7. Which of the following can be defined as marginal cost?

A - Cost of producing one additional unit

8. The balance of cash account indicates _______.

C - Net cash on hand

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 9. Direct Material cost is an example of ____?

A - Unit level cost

10. Which of the following is an operating item?

B – Salary Paid

11. Set-up cost for a production run is an example of _____?

B - Batch level cost

12. Standard cost for material, labour, overheads is calculated as ______level?

A - Unit level

13. Alisha has invested a sum of money of Rs 5 lacs in a fixed deposit of 5 years with
annual compounding at a rate of 10%. If FV factor 5 years at 10% is 1.6105, calculate
thevalue of invetment after 5 years?

C - Rs 805250

14. Both assets and owner’s equity would be increased by _______.

A - Capital bought in

15. Which of the following represents the sales volume by which, sales can drop without
forcing the firm, into losses?

D - Both b & c

16. If compounding is more frequent than yearly, final payment will be ______?

A – Higher

17. Which of the following measure will be used for calculation of Inventory Turnover ratio

C - Cost of Goods sold

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 18. What Break Even Point?

C - No profit-No loss

19. In which of the following statement, final balances of all the accounts are prepared in the
form of a list?

C - Trial balance

20. Which of the following statement shows the Net Profit/Loss earned by a business entity?

A - Income statement

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