COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
OBJECTIVE QUESTION
Multiple Choice Question’s
1. Management accounting is also called
(a) Managerial accounting
(b) Internal accounting
(c) Analytical accounting
(d) Corporate accounting
2. Management accounting applies to
(a) Service firms only
(b) Not-for-profit entities only
(c) Manufacturing firms only
(d) All types of entities
3. Which of the following functions is best describe as choosing among available alternatives?
(a) Decision making
(b) Planning
(c) Controlling
(d) Budgeting
4. The management functions that requires managers to look ahead and establish objectives is
(a) Controlling
(b) Directing
(c) Planning
(d) Constraining
5. Which of the following functions of management involves comparing actual results with
budgeted results?
(a) Planning
(b) Organizing
(c) Directing/leading
(d) Control
6. Which of the following describes the planning functions of management?
(a) Setting short and long-term objectives
(b) Comparing actual to budgeted results and taking corrective action
(c) Taking action to implement the plan
(d) Arranging the necessary resources to carry out the plan
7. Which of the following describes the Control function of management
(a) Setting short and long-term objectives
(b) Comparing actual to budgeted results and taking corrective action
pg. 1 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
(c) Taking action to implement the plan
(d) Arranging the necessary resources to carry out the plan
8. Recorded facts and figures are
(a) Data
(b) Information
(c) Truth
(d) All of the above
(e) None of the above
9. Knowledge derived from recorded facts is
(a) Data
(b) Information
(c) Truth
(d) All of the above
(e) None of the above
10. Information is ____________ data.
(a) Grouped
(b) Technical
(c) Processed
(d) Only
11. Information is
(a) Data
(b) Processed data
(c) Manipulated data
(d) Computer output
12. Data by itself is not useful unless
(a) It is massive
(b) It is processed to obtain information
(c) It is collected from diverse sources
(d) It is expensive
13. For taking decision data must be
(a) Very accurate
(b) Massive
(c) Processed correctly
(d) Collected from diverse sources
14. Which of the following is not a characteristic of good information
(a) Interchangeability
(b) Relevance
pg. 2 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
(c) Cost effectiveness
(d) Timeliness
(e) Accuracy
15. Information must be __________; it must be correct
(a) Relevant
(b) Economical
(c) Timely
(d) Accurate
16. Good information is _________; it is produced in time for its intended use
(a) Relevant
(b) Economical
(c) Timely
(d) Accurate
17. Information that is produced at a reasonable cost would be considered ____________
information.
(a) Relevant
(b) Economical
(c) Timely
(d) Business
18. The average temperature on the surface of the mars would probably be ____________
information for a financial analyst.
(a) Important
(b) Timely
(c) Irrelevant
(d) Accurate
19. In order to be cost effective, information must be
(a) Timely
(b) Adaptable
(c) Worth the cost of producing it
(d) An input into another system
(e) Comprehensive
20. The quality of information which does not hide any unpleasant information is known as
(a) Complete
(b) Trustworthy
(c) Relevant
(d) None of the above
21. The quality of information which is based on understanding user needs
pg. 3 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
(a)
(b)
(c)
(d)
Complete
Trustworthy
Relevant
None of the above
22. Match quality of information and how it is ensured using the following list :
QUALITY
HOW ENSURED
i.
Accurate
iv. Include all data
ii.
Complete
v. Use correct input and processing rules
iii.
Timely
vi. Include all data up to present time
(i) & (v)
(iii) & (iv)
(ii) & (vi)
(i) & (iv)
23. Match quality of information and how it is ensured using the following list :
QUALITY
HOW ENSURED
i.
Accurate
iv. Include all data
ii.
Complete
v. Use correct input and processing rules
iii.
Timely
vi. Include all data up to present time
(ii)&(v)
(ii)&(iv)
(ii)&(vi)
(iii)&(iv)
24. Match quality of information and how it is ensured using the following list :
QUALITY
HOW ENSURED
i.
Up to date
iv. Include all data to present time
ii.
Brief
v. Give at right time
iii.
Significance
vi. Use attractive format and understandable
graphical chart
(i)&(v)
(iii)&(vi)
(ii)&(vi)
(i)&(iv)
25. Match quality of information and how it is ensured using the following list :
QUALITY
HOW ENSURED
i.
Up to date
iv. Include all data to present time
ii.
Brief
v. Give at right time
iii.
Significance
vi. Use attractive format and understandable
graphical chart
(i)&(iv)
(iii)&(iv)
(ii)&(v)
(ii)&(iv)
pg. 4 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
26. Match quality of information and how it is ensured using the following list :
QUALITY
HOW ENSURED
i Brief
iv. Unpleasant information not hidden
ii Relevant
v. Summarized relevant information
iii Trustworthy
vi. Understands user needs
(i)&(iv)
(iii)&(vi)
(ii)&(v)
(i)&(v)
27. Match quality of information and how it is ensured using the following list :
QUALITY
HOW ENSURED
i.
Brief
iv. Unpleasant information not hidden
ii.
Relevant
v. Summarized relevant information
iii.
Trustworthy
vi. Understands user needs
(i)& (VI)
(iii)& (v)
(i) & (iv)
(ii) & (iv)
28. Strategic information is needed for
(a) Day to day operations
(b) Need government requirements
(c) Long range planning
(d) Short range planning
29. Strategic information is required by
(a) Middle managers
(b) Line managers
(c) Top managers
(d) All workers
30. Tactical information is needed for
(a) Day to day operations
(b) Need government requirements
(c) Long range planning
(d) Short range planning
31. Tactical information is required by
(a) Middle managers
(b) Line managers
(c) Top managers
(d) All workers
32. Operational information is needed for
(a) Day to day operations
(b) Need government requirements
pg. 5 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
(c) Long range planning
(d) Short range planning
33. Operational information is required by
(a) Middle managers
(b) Line managers
(c) Top managers
(d) All workers
34. Statutory information is needed for
(a) Day to day operations
(b) Need government requirements
(c) Long range planning
(d) Short range planning
35. Volume of strategic information is
(a) Condensed
(b) Detailed
(c) Summarized
(d) Relevant
36. Volume of tactical information is
(a) Condensed
(b) Detailed
(c) Summarized
(d) Relevant
37. Volume of operational information is
(a) Condensed
(b) Detailed
(c) Summarized
(d) Relevant
38. Strategic information is
(a) Haphazard
(b) Well organized
(c) Unstructured
(d) Partly structured
39. Tactical information is
(a) Haphazard
(b) Well organized
(c) Unstructured
(d) Partly structured
pg. 6 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
40. Operational information is
(a) Haphazard
(b) Well organized
(c) Unstructured
(d) Partly structured
41. Primary objective of management accounting is
(a) To provide shareholders with useful information for making decisions about
investments
(b) To provide banks with useful information for making decisions about loans
(c) To provide management with information useful for planning and control of operations
(d) To provide the Tax Department with information about taxable income
42. ____________ produces information for managers within an organization.
(a) Financial accounting
(b) Management accounting
(c) Financial auditing
(d) External auditing
43. The primary users of management accounting information are ______________.
(a) Bankers
(b) Government
(c) Managers in organizations
(d) Management accountants
44. How often should management accounting reports be prepared?
(a) Annually
(b) Quarterly
(c) Monthly
(d) As often as necessary
45. The focus of management accounting is on
(a) Tax preparation
(b) External reporting
(c) Internal reporting
(d) Auditing
46. The basic function of management accounting is to
(a) Record all business transaction
(b) Interpret the financial data
(c) Assists the management in performing its functions effectively
(d) Assists in cost determination
(e) Prepare financial statements
pg. 7 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
47. Management and financial accounting argues for which of the following purposes?
Management accounting
Financial accounting
(a) Internal
external
(b) External
internal
(c) Internal
internal
(d) External
external
48. Which of the following would most likely used management accounting information
(a) Shareholders
(b) Consumers
(c) Lenders
(d) Middle level managers
(e) Government agencies
49. Management accounting information is generally prepared for
(a) Shareholders
(b) Creditors
(c) Managers
(d) Government
50. Which of the following statements represents a similarity between financial and management
accounting
(a) Both are useful in providing information for external users
(b) Both are govern by accounting standards
(c) Both us data from the organization’s accounting systems
(d) Both are audited by external auditors
51. As compared to management accounting financial accounting is
(a) Primarily concerned with internal financial reporting
(b) Primarily concerned with external financial reporting
(c) Concerned with non-quantitative information
(d) Involved with planning and control functions
FILL IN THE BLANKS
1. Any form of accounting which enables a business to be conducted more efficiently can be
regarded as ________________ accounting.
2. ______________planning begins with the process of deciding on objectives of the organization.
3. ______________planning involves short-term plans.
4. ______________ Control is the management of daily activities in accordance with strategic and
tactical plans.
5. Recorded facts and figures are ______________.
pg. 8 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
6. ____________information is used by senior managers to plan the objective of their
organization, and to assess whether the objectives are being met in practice.
7. ___________information is used by middle management to decide how the resources of the
business should be employed, and to monitor how they are being and have been employed.
8. ___________information is used by a head clerk to ensure that specific tasks are planned and
carried out properly within the office.
9. Knowledge derived from recorded facts is _________.
10. Information is ___________data.
11. Information must be _________; it must be correct.
12. Good information is __________; it is produced in time for its intended use.
13. Information that is produced at a reasonable cost would be considered as ___________
information.
14. The Quality of information which does not hide any unpleasant information is known as
_______________.
15. ____________information is based on understanding user needs.
16. Strategic information is required by ____________ management.
17. Tactical information is required by ____________ management.
18. Operational information is required by ____________ management.
19. ___________ information is needed to meet government requirements
20. Volume of strategic information is __________________.
21. Volume of tactical information is __________________.
22. Volume of operational information is _______________.
MATCH THE FOLLOWING COLUMNS
[A]
1.
2.
3.
4.
5.
6.
7.
8.
COLUMN A
Formulation of plans to meet
objectives
Formulation of short-term
budgeting/profit planning
Corrective action to bring plans and
results into line
Recording and reporting of financial
transactions and events
Recording and reporting of costs
Acquisition and use of finance
Communication of financial and
operating information
Reviewing and reporting on systems
and operations
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
COLUMN B
Cost accounting
Strategic planning
Financial management
Operation planning
Management information system –
MIS
Financial and Performance Control
Internal/ Management Audit
Financial
pg. 9 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
[B]
1.
2.
3.
4.
5.
6.
7.
8.
COLUMN A
Accurate information
Complete information
Reliable information
Timely information
Up-to-date information
Relevant information
Brief information
Economical information
1.
2.
3.
4.
COLUMN A
Stategic information
Tactical information
Operational information
Statutory information
COLUMN B
Summarized form
Cost-effective
Correct input and processing
Complete and honest disclosure
Based on what user needs
Include all data available at time of
processing
(g) Include all data
(h) Get information when useful
(a)
(b)
(c)
(d)
(e)
(f)
[C]
(a)
(b)
(c)
(d)
COLUMN B
Top Management
Line Management
Government
Middle Management
[D]
COLUMN A
1. Top Management
2. Middle Management
3. Line Management
COLUMN B
(a) Short Term improvement
(b) Day-to-Policies
(c) Long term Planning
COLUMN A
1. Stategic information
2. Tactical information
3. Operational information
COLUMN B
(a) Value of inventory in hand
(b) Identifying best product mix
(c) Customer preference surveys
[E]
TRUE OR FALSE
1.
2.
3.
4.
5.
6.
7.
8.
Management accounting is known as corporate accounting.
Management accounting provides information to investors about management.
Shareholders are internal decision-making of a company
Financial statements contain the plans of management.
Budgets contain the plans of management.
Control function of management involves setting objectives of the concern.
Planning function of management involves taking corrective action if needed.
Management accounting reports are prepared annually.
pg. 10 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID
COMPILED BY : Ms. DARSHANA PATEL –J.M.PATEL COLLEGE OF COMMERCE : 2015-2016 :SEMESTER V :
INTRODUCTION TO MANAGEMENT ACCOUNTING
9.
10.
11.
12.
13.
14.
15.
16.
Management accounting reports may be prepared as and when needed.
The focus of management accounting is on external reporting.
Management accounting reports must follow the accounting standards.
Data is information that has been processed in some way.
Information is raw facts that describe a particular phenomenon.
Information is simply data that have a particular meaning within a specific context.
Tactical management provides an organization with overall direction and guidance.
Strategic management is the second level in the traditional organization pyramid.
pg. 11 ONLY FOR INTERNAL USE. NO SPECIAL CHARGES ARE COLLECTED OR PAID