Accounting and Financial Management MCQ with Answers

Are you looking for an effective way to review your knowledge of accounting and financial management? These multiple-choice questions and answers can be a great tool to help you assess your understanding of the subject matter.

Accounting and Financial Management MCQ Sample Papers with Answers is a collection of questions and answers for students preparing for their exams.

These MCQs with Answers in Accounting and Financial Management are important for exams like MBA, BBA, BCA, MCA, BMS, UPSC, CA, CS, CMA, CPA, CFA, NET, Banking, and other accounts department exams.

With this guide, you’ll get access to a comprehensive collection of questions and answers related to accounting and financial management, allowing you to quickly and easily review the topics you need to know. Get started today and see how far you can go!

Introduction to Accounting and Financial Management

Accounting and financial management are two of the most important aspects of running a successful business. Accounting is the process of recording, classifying, summarizing, and reporting financial transactions.

Financial management involves planning, directing, and controlling the financial activities of an organization.

Accounting helps to keep track of a company’s financial activity, while financial management is responsible for using financial information to make decisions.

Together, accounting and financial management help businesses to make better decisions, manage risk and achieve their goals.

Definition of Accounting and Financial Management

Accounting and Financial Management is the process of managing the finances of a business or organization. It involves the recording, analysis, and reporting of financial information in order to help the organization make informed decisions. Accounting and Financial Management include budgeting, financial reporting, taxation, auditing, and financial planning. It is an essential part of running a successful business.

55 Accounting and Financial Management MCQs with Answers

1. ___ accounting is concerned with accounting information that is useful to management.
a. Financial
b. Cost
c. Management
d. All of the above
Answer (C)

2. Sunk cost is relevant cost –
a. True
b. False
Answer (B)

3. Quick Ratio is also known as –
a. Liquid ratio
b. Acid test ratio
c. Both of above
d. Current ratio
Answer (C)

4. COGS = Opening stock + Purchase + ___ – closing stock.
a. Direct income
b. Direct expenses
c. Indirect expenses
d. Indirect income
Answer (B)

5. On the basis of traceability, costs are classified as –
a. Fixed cost & variable cost
b. Direct & indirect cost
c. Relevant & opportunity cost
d. Incremental & documented cost
Answer (B)

6. ___ Defined as the allotment of whole items of costs to the cost centre or cost unit.
a. Apportionment
b. Distribution
c. Allocation
d. Overheads
Answer (C)

7. ___ cost increases with the increase in the number of batches.
a. Set-up cost
b. Carrying cost
c. Holding cost
d. Total cost
Answer (A)

8. ___ work is executed outside the premises of the contractor.
a. Job
b. Contract
c. Process
d. Batch
Answer (B)

9. Escalation clause included in the contract to reduce the element of risk by fluctuation.
a. True
b. False
Answer (A)

10. Normal loss may be in the form of –
a. Normal waste
b. Normal spoilage
c. Normal scrap
d. All of the above
Answer (D)

11. Two or more products separated in processing, each having a sufficiently high saleable value to merit recognition as the main product is known as –
a. Joint product
b. By-Product
c. Batch product
d. Combined product
Answer (A)

12. Which method is also known as an arbitrary method –
a. Standard cost method
b. Physical unit method
c. Average unit cost method
d. Survey method
Answer (D)

13. Higher current ratio, i.e. more than 2:1 indicate a sound solvency position while a higher quick ratio i.e. more than 1:1 indicate a sound financial position.
a. True
b. False
Answer (A)

14. Which of the following is true –
a. C = S – VC
b. C = F + P
c. S – VC = F + P
d. All of the above
Answer (D)

15. Margin of safety = Sales ___.
a. Break-even point
b. Break-even sales
c. Profit volume
d. Contribution
Answer (B)

16. ___ is a formal expression of anticipated income & expenditure for a definite future period.
a. Budgeting
b. Budgetary
c. Budgetary control
d. Budget
Answer (D)

17. On the basis of efficiency, the budget is categorized as –
a. Functional & master budget
b. Fixed & flexible budget
c. Long-term & short-term budget
d. All of the above
Answer (B)

18. Budgetary control encourages productive competition among employees through an incentive scheme.
a. True
b. False
Answer (A)

19. Standard cost is similar to estimated cost –
a. True
b. False
Answer (B)

20. ___ is the difference between the actual cost and the standard cost incurred during a period.
a. Variance
b. Controlling
c. Standard budgeting
d. Budgetary control
Answer (A)

21. Which of the following statement is not true –
a. SY > AY = (A)
b. SY < (AY = (B)
c. MCV = MUV + MPV
d. MUV = MCU + MPV
Answer (D)

22. ___ is the excess of units produced over the expected units of production. Over units of production.
a. Abnormal loss
b. Abnormal gain
c. Supernormal loss
d. Supernormal gain
Answer (B)

23. Liquid Assets = Current Assets = Quick Assets
a. True
b. False
Answer (B)

24. Larger the angle of incidence, the higher the profit.
a. True
b. False
Answer (A)

25. Fund includes:
a. Cash
b. Total current assets
c. Networking Capital
d. All of the above
Answer (D)

26. Which of the following statement shows major sources & uses of cash:
a. Fund flow statement
b. Cash flow statements
c. Balance sheet
d. Income expenditure
Answer (B)

27. ___ cost is a cost that can be influenced by the action of a specified member of an undertaking.
a. Joint
b. Controllable
c. Common
d. Direct
Answer (B)

28. Controllable cost, variable cost, and direct cost are synonymous
a. True
b. False
Answer (B)

29. The worker who works directly with the raw materials in covering them to finished goods represents ___.
a. Direct expenses
b. Direct labour
c. Direct material
d. None of the above
Answer (B)

30. PRIME COST + Factory overheads = PRODUCTION COST.
a. True
b. False
Answer (B)

31. Which of the following stems are not included in the cost sheet?
a. Preliminary expenses are written off
b. Profit on sale of fixed assets
c. None of the above
d. Both a & b
Answer (D)

32. Unproductive wages in an item of –
a. OFFICE overheads
b. Factory overheads
c. DIRECT LABOR
d. PRODUCTION overhead
Answer (B)

33. Insurance overheads are allocated on the basis of –
a. Floor area
b. Capital value
c. Value of stock
d. Kilowatt
Answer (C)

34. Percentage of direct wage = Factory overhead X 100
Direct Wage
a. True
b. False
Answer (A)

35. Consolidated summary of the various functional budget is known as:
a. Common budget
b. Summarized budget
c. Master budget
d. Both b & c
Answer (D)

36. Depreciation is a type of ___ cost.
a. Incremental
b. Non-cash
c. Sunk
d. Imputed
Answer (B)

37. P/V ratio stands for profit/value ratio.
a. True
b. False
Answer (B)

38. The amount at any given volume of output by which the aggregate costs are changed in the volume of output is increased or decreased by one unit, is called.
a. Abruption
b. Marginal costing
c. Variable costing
d. CUP analysis
Answer (A)

39. Which o the following is the advantage of budgetary control –
a. Maximize output
b. Ensure teamwork
c. Controls expenditure
d. All of the above
Answer (D)

40. ___ Accounting to be made compulsory by law but ___ Accounting is adopted to increase efficiency without any legal force.
a. Management, Financial
b. Cost, Financial
c. Financial, Management
d. None of the above
Answer (C)

41. Cash from the operation can be expressed as Net Profit + Increase in ___ – Decrease in ___.
a. Current Assets, Current liability
b. Current liability, Current Assets
c. Non-operating income
d. None of the above
Answer (B)

42. Which of the following statement are true?
i. Allocation is defined as the allotment of whole items of cost to the cost centre or cost units
ii. Apportionment means the allotment of proportions of items of cost to cost centres or cost units
a. Both I and ii
b. Only i
c. Only ii
d. None of the above
Answer (A)

43. A company has a current ratio of 4.5 to 1 and a liquidity ratio of 3 to 1 of merchandise inventory is Rs.24,000. Find out total current liabilities.
a. Rs.20,000
b. Rs.16,000
c. Rs.15,000
d. Rs.26,000
Answer (B)

44. COGS = Opening stock + ___ – ___.
a. Purchase, direct expenses
b. Direct expenses, direct income
c. Purchases, closing stock
d. Closing stock, purchases
Answer (C)

45. Which o the following statement is not true:
i. Abnormal costs are those costs. Which are not normally incurred at a given level of output.
ii. Relevant costs are the future costs that differ between alternatives
iii. Opportunity cost is the cost of opportunity lost
a. Both i & ii
b. Both ii & iii
c. All i, ii & iii
d. Neither of the above
Answer (C)

46. Which of the following feature is applied for job costing?
i. Work is executed at the premises of the contract
ii. The contract price is paid in installments depending upon the program of work
iii. Price is decided on the basis of the pricing policy of the manufacturer
a. All i, ii & ii
b. Only i
c. Both i & iii
d. Neither of the above
Answer (C)

47. Which of the following statements is true –
i. The value of the by-product is negligible
ii. The value of both joint & by-product are significant
iii. The value of both joint & by-product are negligible
iv. The value of joint & by-product is negligible
a. Both i & ii
b. ii & iii
c. ii & iv
d. i & iii
Answer (A)

48. Marginal Cost = ___
a. Prime cost
b. Prime cost + total variable cost
c. Fixed cost
d. All of the above
Answer (B)

49. P/V ratio is used in the determination of:
a. Break-Even point
b. Profit at any volume of sales
c. Sales volume to earn the desired profit
d. All of the above
Answer (D)

50. In the Break Even chart, the horizontal axis represents ___ and the vertical axis represents ___.
a. Output, sales revenue
b. Cost of production output
c. Cost of production, sales revenue
d. Output, costing
Answer (A)

51. Which of the following statement is correct-
a. B.E.P is the point at which the total cost line cuts the total sales line
b. B.I.P is the point where the contribution is just equal to fixed costs
c. Both a & b
d. Neither a nor b
Answer (C)

52. ___ is the projection of cost accounting and ___ is the projection of financial accounting.
a. Budgetary control, standard costing
b. Standard costing, marginal costing
c. Standard costing, budgetary costing
d. Marginal costing, standard costing
Answer (B)

53. Which of the following statement are true –
i. Variable cost is one which in the aggregate varies in direct proportion to the volume of production
ii. Fixed cost is charged to finished stock or work in the program as it is treated as a period cost
iii. In small contracts, the contract price is given by the contractee on the completion of the contract
iv. Data accumulation is done through financial accounting & cost accounting system
a. i & iv
b. ii & iii
c. i, ii & iii
d. i, iii & iv
Answer (D)

54. M/s Jacob ltd is committed to supplying 24000 bearings per annum to the EBQ is:
a. 3200 units
b. 3600 units
c. 24,000 units
d. 324 units
Answer (B)

55. Arrange the following steps of budgetary control include.
i. Appointment of the budget committee
ii. Determination of budgeted period
iii. Establishment of a budget centre
iv. Preparation of organizational chart
v. Determination of key factors
vi. Preparation of budget manual
a. i, ii, iv, iii, vi, v
b. ii, iii, iv, vi, v, I
c. iv, iii, I, vi, ii, v
d. iv, I, vi, v, ii, iii
Answer (C)

55. The following information is given: Standard quantity – 250 units. Actual quantity – 260 units. Standard price Rs.5 per unit, Actual price Rs.5.5 per unit. Calculate material variances.
The material variance is –
a. Rs.150 (A)
b. Rs.180 (A)
c. Rs.30 (F)
d. Rs.80 (A)
Answer (B)

Accounting and Financial Management Quiz!

This quiz will test your knowledge of accounting and financial management fundamentals. Find out if you have what it takes to tackle the world of accounting and financial management. Put your knowledge to the test and see if you have what it takes to be a successful accountant or financial manager.

0
Created on By Sofia Islam

Accounting and Financial Management

Welcome to the Accounting and Financial Management Quiz! Here, you will test your understanding of the concepts, principles and methods of accounting and financial management. With the help of this quiz, you can identify areas where you need to improve your knowledge and skills so that you can be better prepared for the challenges of managing and reporting on financial information.

1 / 25

A business is an artificial entity distinct from its proprietors. This is based on which concept?

2 / 25

___ has more than one owner who has agreed to share profits of a business, carried on by all or any of them acting for all.

3 / 25

“Anticipate no profit but provide all possible losses”. Which concept says so?

4 / 25

The valuation of assets & liabilities principle depends on which concept?

5 / 25

According to the income tax law, 1961, business unit should follow a uniform accounting period i.e.:

6 / 25

A happening of consequence to an entity known as___

7 / 25

Which of the following is a type of vouchers?

8 / 25

___ is drawn to record all non-cash transactions and events.

9 / 25

FASB stands for:

10 / 25

Which of the following equation is correct?

11 / 25

___ is the residual interest of owners in assets over liabilities.

12 / 25

The income and expenses should be recognized as & when they are earned and incurred, irrespective of whether the money is received or paid in connection thereof.

13 / 25

If you pass in MBA. It will give you a great deal of satisfaction. This expression cannot be made in money term. This is because of which concept?

14 / 25

___ is a book of first entry or prime entry.

15 / 25

___ is documentary evidence in writing, containing an unconditional

order signed by the maker, directing a certain person to pay a certain sum of money to the bearer of the instrument.

16 / 25

___- records goods returned to the suppliers.

17 / 25

cost sheet shows the total cost of ___ only.

18 / 25

PRIME Cost + Factory overhead =?

19 / 25

A Cost Sheet with sales & profit data are called ___.

20 / 25

___ refers to the cost of materials, which become a major part of the finished product.

21 / 25

Decision –making is linked with.

22 / 25

Depreciation is a type of which cost.

23 / 25

Which of the following heads is not an application of marginal costing?

24 / 25

A cost, which can be influenced by the action of a specified number of an undertaking, is called.

25 / 25

Satellite Communication channels is the example of

Your score is

The average score is 0%

0%

Multiple Choice Questions in Probability and Statistics

FAQs

Q1: What are accounting and financial management?

A1: Accounting and Financial Management is a comprehensive system of accounting, financial planning, and management for organizations and businesses. It encompasses the collection and analysis of financial data, the formulation of financial strategies, the implementation of plans, and the measurement of results.

Q2: What are the main components of accounting and financial management?

A2: The main components of accounting and financial management include budgeting, cash flow management, financial reporting, accounting and auditing, investment analysis, and risk management.

Q3: How do accounting and financial management help improve business performance?

A3: Accounting and financial management can help improve business performance by providing accurate financial information and helping organizations develop appropriate strategies and plans. It can also improve decision-making, help identify and manage risks, and provide better control over financial resources.

Q4: What are the benefits of using accounting and financial management?

A4: The benefits of using accounting and financial management include improved financial decision-making, improved business performance, and better risk management. It can also help organizations to decrease costs, optimize resources, and improve financial reporting.

Conclusion

The Accounting and Financial Management Multiple Choice Questions and Answers provide a valuable resource for those seeking to gain a better understanding of the topics involved in accounting and financial management. With detailed explanations of each question and answer, this resource will help ensure that students, professionals, and other interested parties have a solid foundation of knowledge in this area. These questions are only for your study purposes. If you like these MCQs, please share them on social media.

Read More:

Watch the Youtube Video of Accounting and Financial Management MCQs

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *