UNIT1:

1. 1 Financial accounting is_______

a.an art b. scientific method c. both a&b d.None of these
2. There are _____types of business transactions.
a. 3 b. 4 c. 5 d.6
3.Transactions has to be recorded with respect to_____ according to the principle
of business entity concept.
a. business b.Owner c. a or b d. none of these
4.Journal is also called_______
a. monthly record b. daily statement c day book. d.yearly statement
5.Passing entries from journal to ledger is called_________
a. journalizing b.ledger posting c.transferring d.a or b
6.Increase in capital______
a. debit b.credit c debit or credit d.not allowed.
7.Decrease in assets______
a. debit b.credit c debit or credit d.not allowed.
8.Outcome of trading account is _____

a.Gross profit b. Net profit c.Gross profit or gross loss d.Net loss

9. Outcome of profit and loss account account is _____

a.Gross profit b. Net profit or net loss c.Gross profit or gross loss d.Net loss

10.In balance sheet, cash in hand comes under____

a. current liabilities b. current assets c. fixed assets d. long term loans

11.In balance sheet, Bills payable comes under_____

a. current liabilities b. current assets c. fixed assets d. long term loans

12. Outcome of proft & loss account will be transferred to _______

a. capital a/c b.current liabilities c. current assets d. long term investments.

13.In balance sheet ,prepaid expenses reflects under________

 a.current assets b . fixed assets c. long term investments d.short term investments

UNIT-2

1.Source for ratio analysis is________

a. P&L a/c b. Balance sheet c. a or b d. a&b
2.Ratio analysis is helpful to ________
a. company itself b.employess c. money lenders d.All
3. Generally CR ratio should be more than_______.
a. 1 b.-1 c.0 d.None of these.
4.current ratio is the ratio of _____
a. current assets to current liabilities b. current liabilities to current assets c. assets to liabilities d.
None of these
5.Liquid ratio is also called_______
a. current ratio b. acid test ratio c.quick ratio d. a or b
6. The ideal quick ratio is
a) 2:1 b) 1:1 c) 5:1 d) None of the above

7. Financial leverage means___

a) Use of more debt capital to increase profit b) High degree of solvency

c) Low bank finance d) None of the above

8. Banks generally prefer Debt Equity Ratio at :

a) 1:1 b) 1:3 c)2:1 d) 3:1

9. In last year the current ratio was 3:1 and quick ratio was 2:1.Presently current ratio is 3:1 but quick ratio
is 1:1.This indicates comparably
a) high liquidity b) higher stock c) lower stock d) low liquidity
10. Properietory ratio is calculated by
a) Total assets/Total outside liability b) Total outside liability/Total tangible assets
c) Fixed assets/Long term source of fund d) Properietors’Funds/Total
Tangible Assets
11. Current ratio of a concern is 1,its net working capital will be
a) Positive b) Negative c) Nil d) None of the above

12. The degree of solvency of two firms can be compared by measuring

a) Net worth b) Tangible Net Worth c) Asset coverage ratio d) Solvency Ratio
13. A very high current ratio indicates

a) High efficiency b) flabby inventory c) position of more long term funds d) b or c

14.Debt Equity Ratio is 3:1,the amount of total assets Rs.20 lac,current ratio is 1.5:1
and owned funds Rs.3 lac.What is the amount of current asset?

a) Rs.5 lac b) Rs.3 lac c) Rs.12 lac d)none of the above

15. If a company revalues its assets,its networth :

a) Will improve b) Will remain same c) Will be positively affected d) None of

the above.

UNIT-3

1.Actual amount required to manaufacture a unit of product is called as____

a. cost b. price c. value d. worth

2. Direct material is the part of _____

a.prime cost b. works cost c. factory cost d.cost of sales

3.Direct Labour is the part of _____

a.prime cost b. works cost c. factory cost d.cost of sales

4. Factoty rent is the part of _____

a.prime cost b. works cost c. factory cost d.a or b

5. Primary objective of process costing is to find_____

a. profit b. selling price c. cost of product at the end of each process d. none of these

6. ____ is (are) the different elements of costs

a.material cost b. Labour cost c. manufacturing OHs d.All
7. . In process costing, the cost of the component will____
a. constant b.goes on increasing c doesn’t affect d.None of these.
8. If beginning work in process equivalent units are 2500 units, work done in current
period equivalent units are 3800 units and ending work in process equivalent units are
5000, then complete equivalent units in current period are____

a.1800 units b.1500 units c.1300 units d. 1500 units

9. A unit cost calculated in costing system, by assigning total costs incurred to many similar units
is categorized as ______

a. accounting period costing system b.process costing system c.job costing system d.none of
above

10. If beginning work in process equivalent units are 2500 units, work done in current
period equivalent units are 3800 units and units completed in current period are 4000,
then ending work in process equivalent units will be___

a.1800 units b.2300 units c.10300 units d.1500 units

11. Marginal costs is taken as equal to____

a) Prime Cost plus all variable overheads b) Prime Cost minus all variable overheads
c) Variable overheads d) None of the above
12. Marginal cost is computed as

a) Prime cost + All Variable overheads b) Direct material + Direct labor + Direct
Expenses + All variable overheads
c) Total costs – All fixed overheads d) All of the above

13. Under absorption costing, managerial decisions are based on

a. Profit b. Contribution c. Profit volume ratio d. None of the above

14. Absorption costing is also known as

a. Historical costing b. Total costing c. Both a and b d. None of the above

15. When actual price is higher or lower than the standard price, then it is _____

a. Sales price variance b. Sales volume variance c. Sales mix variance d. Sales quantity
variance

UNIT-4

1. Working capital is also known as____

a. Current capital or circulating capital b.Work in progress capital

c.Day-to-day capital d.Trading capital

2. Net working capital refers to ____

a) total assets minus fixed assets.b)current assets minus current liabilities.c)current assets
minus inventories.d)current assets.

3.In general business cycle may be___ days

a. 0 b. >0 c.<0 d.none of these
4.:The amount of such working capita lkeeps on fluctuating from time to time on the basis
of business activities is called as ___
a.Temporary Working Capital b.permanent Working Capital
c .cash Working Capital d. Balance Sheet Working Capital
5. ___type of Working Capital is the minimum amount of investment in all current assets
which is required at all times to carry out minimum level of business activities.
a.Permanent b. Temporary c.Gross d. Net

6. ____is the total time gap between the purchase of raw material and the receipt from
Debtors.
a.Operating cycle b. lead time c. cycle time d.b or c
7. Concept based working capital includes _____

a.Gross working capital b.net working capital c.negative working capital d. All these
8. Time based working capital includes _____

a. Permanent or Fixed Working Capital b. Temporary or Variable Working Capital

c.both a & b d.None of these.

9. In case of trading concerns, the operating cycle will be _____

a.Cash→Stock→Debtors→Cash a. Stock →Cash→ Debtors→Cash
c. a or b d. none of these.
10.
UNIT-5
1.   Plant utilization budget and Manufacturing overhead budgets are types of ____

a. Production budget b. Sales budget c. Cost budget d. None of the above

2.  R&D budget and Capital expenditure budget are examples of

a. Short-term budget b. Current budget c. Long-term budget d. None of the above

3. A budgeting process which demands each manager to justify his entire budget in detail from
beginning is

a. Functional budget b. Master budget c. Zero base budgeting d. None of the above

4. _______ provides an estimate of the capital amount that may be required for buying fixed
assets needed for meeting production requirements.

a. Production budget b. Cash budget c. Capital expenditure budget d. None of the above

5._______ is designed after assessment of the volume of output to be produced during budget
period.

a. Cost budget b. Sales budget c. Production budget d. None of the above

6.  ________ is the first step of budgetary system and all other budgets depends on it.

a. Cost budget b. Sales budget c. Production budget d. None of the above

7. _______also known as subsidiary budgets.

a. Master budget b. Functional budget c. Cost budget d. None of the above

8. __________ contains the picture of total plans during the budget period and it comprises
information relating to sales, profit, cost, production etc.

a. Master budget b. Functional budget c. Cost budget d. None of the above

9.  _________ is stated as a budget which is made to change as per the levels of activity attained.

a. Fixed budget b. Flexible budget c. Both a and b d. None of the above

10. _______ is prepared for single level of activity and single set of business conditions.

a. Fixed budget b. Flexible budget c. Both a and b d. None of the above

11.  The process of budgeting helps in the control of ___

a. Cost of production b. Liquidity c. Capital Expenditure d. All of the above

12.  According to George R. Terry, _________ may be described as a process of finding out
what is being done and comparing actual results with the corresponding budget data in order to
approve accomplishment.

a. Budgetary control b. Budget c. Budgeting d. None of the above

13. The process of budgeting includes ___

a. Preparation of budget b. Budget Control c. Budget co-ordination d. All of the above

14.A budget is tool which helps the management in planning and control of_____

a.All business activities b.Production activities c.Purchase activities d.Sales activities

15. Thes success of budgetary control system depends upon the willing cooperation of___

a.Shareholders b.Management c.Creditors d.All the functional areas of management