Unit: 11) Accounting is one of the _____ management systems.a) Newestb) Oldestc) Latestd) preferred2) According to AICPAs definition in 1941, Accounting is a/an ___.a) Artb) Sciencec) Both (a) & (b)d) None 3) According to AAAs definition in 1966, Accounting is a ___.a) Structureb) Processc) Scienced) art 4) ___________ is the science and art of recording business transactions.a) Accountingb) Journalizingc) book-keepingd) classifying 5) _______ transactions and events in the 1st step in accounting processa) Identifyingb) Classifyingc) Journalizingd) book-keeping6) The book in which transactions are 1st recorded is called ____.a) Journalb) Ledgerc) Statementd) subsidiary book

7) For _____ transactions of similar nature, a separate book called ____ is maintained.a) recording, ledgerb) maintaining, journalc) classifying, journald) classifying, ledger8) Process of transferring transactions from journal to ledger is called ____ a) Export b) posting c) journalizing d) maintenance 9) Fixed assets are shown in the B/s at historical cost less _____.a) Accumulated provision for Tax b) expenses c) additions d) accumulated depreciation10) Getting higher credit rating is a motto behind _____. a) Auditing b) preparing balance sheet c) raising investment d) window dressing11). __________ is the ability of a firm to satisfy its short-term obligations as they become due for payment. a. Liquidity b. Solvency c. Activity d. Currency12) Which step explains the importance of all the data in a manner that the end users of financial statements can make a meaningful judgment about the financial position and profitability of the business? a. Identification b. Summarising c. Analysing d. Interpreting

13)____________ can be measured in terms of money, goodwill or patent rights.a. Intangible accounts b. Assets b. Income d. Tangible accounts14) Rectification entries are recorded in _________________ If the errors such as wrong posting, wrong casting, wrong calculation etc., are committed in the books of original entry or ledger. a. General journal b. Suspense account c. Trading Account d. control

Unit231) Business purchases fixed assets on the basis of ______ concept.2a) Conservatism b) money measurement c) going concern d) historical cost32) Interest payable in Jan is Rs. 40,000, paid in Feb , will be recorded in Jan on basis of ___ concept.a) Accrual b) receipt c) matching cost d) money measurement33) Anticipate no profits but provide for all anticipated losses is which concepts rule?a) Prudence b) money measurement c) going concern d) historical cost34) ____ has 2 components: Accounting Concepts and Accounting Conventions.a) IAS b) IFRS c) GAAP d) ASB35) Business purchases fixed assets on the basis of ______ concept.a) Conservatism b) money measurement c) going concern d) historical cost36) Interest payable in Jan is Rs. 40,000, paid in Feb , will be recorded in Jan on basis of ___ concept.2a) Accrual b) receipt c) matching cost d) money measurement37) anticipate no profits but provide for all anticipated losses is which concepts rule?2 a) Prudence b) money measurement c) going concern d) historical cost38) Purchase account is a ____ accounta) Personal b) real c) nominal d) representative personal39)______ = Assets Liabilities a) Debts b) proprietors equity c) Profit d) loss40).______________ facilitates more disclosure of financial information that is beyond the statutory limits. a. Change in accounting policies b. Accounting conventions c. Accounting concepts d. Accounting standards

41. ___________ is also called outstanding income. a. Outstanding expenses b. Prepaid expenses c. Income received in advance d. Accrued income 42. What is the significance when we say that the C/S ratio may also be used for determining the desired volume of output for a specified amount of profit? a. Measure of profitability b. Product mix decision c. Profit planning d. Intra-firm comparison 43. What do you call the reduction granted by a supplier to a customer on the amount of bill due, considering payment within the credit period? a. Trade discount b. Amount c. Cash discount d. Goodwill 44. Which function of management accounting needs various departments to be consulted and is responsible for policy decisions? a. Forecasting b. Planning c. Co-ordination d. controlling

Unit: 361) Capital is a ____ for the business; Drawings are a/an _____ to the business.a) Liability, expense b)asset, liability c)income, expenditure d) equity, asset62) _______ are the real owners of the company.a) Creditors b) debtors c) equity shareholders d) owners63) Components of _____ are share capital, share premium and retained earnings.a) Capital b) equity c) funds d) preference shares64) Narration, a brief explanation of a journal entry, that starts with the word ____.a) To b) By c) Being d) Thus65) Debit what comes in; Credit what goes out is a rule for ____ account.a) Personal b) real c) nominal d) representative personal66) Drawings are a ____ account.3 a) Personal b) real c) nominal d) representative personal67) Journal entries are to be passed in a ___ order.3 a)systematic b) random c) classified d) chronological68).The book in which the transactions are first recorded is called a _____________. a. Ledger b. Balance sheet c. Journal d. Posting

Unit: 491) Purchased furniture worth Rs.10000. Which account will be debited?a) Purchase b) assets c) cash d) furniture92) Outstanding expenses is a _____ account. a) Personal b) real c) nominal d) representative personal93) Transactions not appearing in any subsidiary books are entered into ___.a) Balance sheet b) P&L Account c) Journal Proper d) Cash book94) ____ does not appear in books of accounts. a) Cash discount b) trade discount c) both (a) & (b) d) none of the above95) Cash discount is granted on ___ price.a) actual b) catalogue c) invoice d) discounted96) Bill of exchange is ___ by the maker.a) prepared b) signed c) received d) issued97)_____ appears on both sides of the cash book.a) Contra entry b) compound entry c) adjustment entry d) original entry98) Petty cash book is maintained under ___ system.a) Secret b) routine c) impress d) authorized 99) Sales made to Mr. A of Rs.10, 000 is credited to Mr. As account. Mr. As account will be ____ with ____.a) Credited, Rs. 5000 b) debited, Rs.10000 c) debited, Rs.20000 d) credited, Rs.20000

Unit: 5 121)______ is the source document to prepare final accounts. a) P&L account b) Trading account c) Journal d) trial balance122) Error of commission is ___ in the trial balance. a) Disclosed b) not disclosed c) either (a) or (b) d) uncertain102) Errors of ____ omission are not disclosed in the trial balance. a) Partial b) complete c) both a & b d) none123) Expenses incurred in construction of fixed assets are debited to ____ account. a) Expenses b) liability c) fixed assets d) miscellaneous expenses124) P&L account shows ____ effect and Trading account shows ___ effect. a) Net, gross b) gross, net c) surplus, deficit d) operating, trading125) First item debited to trading account is ____. a) Purchases b) COGS c) opening stock d) Gross loss126) Balance sheet shows financial position on the ___ day of the year.a) First b) last c) each d) any127) Depreciation is a ___ in value of asset.a) Increase b) change c) reduction d) manipulation128) Closing stock is a ___. a) Liability b) inventory c) purchase d) asset129) Final accounts are termed so as they are prepared at the ___ of the accounting period. a) Beginning b) between c) end d) chronologically130) When total revenue is ___ than total expenses, there is profit. a) More b) less c) equal d) lower131) The expenses related to core operations of the business are called ___ expenses. a) Trading b) indirect c) core d) direct132) ____ is the excess of direct expenses over direct incomes.a) gross profit b) net profit c) gross loss d) net lossUnit: 6151) Entries of transactions that are passed after drafting the trial balance relating to current year are called ___.6a) Contra entries b) compound entries c) journal entries d) adjustment entries152)_____ expenses of current year should be added to the relevant expense.6 a) Outstanding b) advance c) prepaid d) accrued153) ____ income is also called outstanding income. a) Pre received b) accrued c) prepaid d) none of the above 154) Under ___ analysis, base year data is taken as 100.a) Comparative b) vertical c) trend d) index numbers155) In common size balance sheet, total of ____ is converted into 100.a) Balance sheet b) income statement c) capital d) assets

Unit: 7181)_____ ratios reflect the short term solvency of the firm.7a) Solvency b) integrated c) liquidity d) profitability182) When Current ratio is 2.5, and working capital is Rs. 1, 80,000; Current assets = ___.a) 100,000 b) 200,000 c) 300,000 d) 150,000183) ____ is the most rigorous test of firms liquidity position.a) Liquidity ratio b) quick ratio c) current ratio d) cash ratio

Unit: 8 211) Acid test ratio excludes ____.a) Cash b) inventory c) securities d) debt212) Ideal current ratio is___.a) 1:1 b) 1:2 c) 1 d) 2:1 213) ___ reflects the relative claims of creditors and shareholders against assets of the firm. a) debt-asset ratio b) debt-equity ratio c) proprietor ratio d) debt services coverage ratio2) More than ___ proprietary ratio means lesser dependence on external sources a) 50% b) 25% c) 60% d) 75%215) ____ shows the mix of finance employed in the firm.8 a) Capital gearing ratio b) interest coverage ratio c) debt-asset ratio d) ROCE216) Dividend coverage ratio measures ability of form to pay dividend on ___ shares.a) Equity b) Preference c) both d) bonus217) COGS = Opening stock + ______ - Closing stock a) Purchase b) Net Purchase c) Sales d) Wage218) ROCE = ____ / Capital employed X 100 a) EBT b) PAT c) PBDAT d) EBIT 219) Gross profit = Net Sales - ____a) Sales returns b) COGS c) closing stock d) Purchases220) Debtors turnover ratio is expressed in ___. a) Percentage b) days c) times d) months221) ___ indicates the efficiency with which the firm uses its assets to generate sales. a) debt-asset ratio b) assets turnover ratio c) assets-sales ratio d) fixed assets ratio 222) Credit sales = 3,65,000; Debtors = 50,000 and B/R = 2,000. Debtors turnover ratio = ____. a) 7.02 b) 6.80 c) 7.20 d) 5223) ___ shows how the earning power of a company is affected by various component parts. a) Ratios b) financial statements c) Financial analysis d) Du Pont chart 224) Gross working capital refers to firms investment in current assets. a) True b) false c) cant say d) either (a) or (b225) P&L account ___ balance is a non-current asset. a) Debit b) credit c) equal d) either (a) or (b226) Advance from dealers is ___.a) Current asset b) current liability c) non-current asset d) non-current liability227) Transactions involving current asset and capital is an example of ___ of funds.a) Non-flow b) increase c) flow d) decrease

Unit: 9241) Payment of dividend is a ___ of funds.a) application b) source c) flow d) non-flow242) All ___ incomes and expenses appear in the adjusted P&L account to ascertain funds from operations.a) Operating b) non-operating c) capital d) day-to-d243) ___ is credited to the adjusted P&L account.a) Loss on sale of asset b) depreciation c) profit on sale of asset d) increase in working capital244) ____ is an application of fund.a) Issue of shares b) raising term loans c) Removal of assets d) buy back of shares245) Fund flow analysis is ___ based.a) Cash b) payment c) accrual d) analysis

Unit: 10271) Cash flow statement is discussed under ___.a) AS 2 b) AS 3 c) AS 4 d) AS 1 272) ____ are short term, highly liquid investments. a) Cash equivalents b) cash c) super quick assets d) liquid assets273) Payment of income tax is a ____ activity. a) Operating b) investing c) financing d) none of the above274) Cash receipts from futures contracts and swap contracts is a ___ activity.a) Operating b) investing c) financing d) none of the above275) ___ paid is a financing activity.a) Salaries b) income tax c) dividend d) loan276) Any decrease in current assets between two periods should be ___ a) Added back b) deducted c) no effect d) carried to Balance sheet.Unit: 11301) Production of tablets is an example of ___ costinga) Contract b) batch c) composite d) unit costing302) Civil contractors use ___ method of costing. a) Contract b) batch c) composite d) unit costing303) ____ costing is used as nature of product is complex. a) Contract b) batch c) composite d) unit costing304) Service industries implement ___ costing.a) Unit b) operating c) operation d) both (b) and (c)305) ____ is a section of the business to which costs are charged.a) Department b) cost unit c) cost centre d) cost306) ___ overhead is the cost of indirect materials, indirect labor and indirect expenses.a) Variable b) indirect c) direct d) factory 307) ___ labour includes foremen, cleaners and maintenance men. a) Standard b) indirect c) direct d) factory 308) ____ are also called standby costs or period costs.a) Fixed costs b) variable costs c) actual costs d) historical costs309) Discretionary costs are also called ___ costsa) Capacity b) step c) programmed d) committed310) Depreciation on plant and machinery is a ___ cost. a) Non-cash b) Managed c) fixed d) committed311) Product cost is composed of ___ elements.a) 1 b) 2 c) 3 d) 4

Unit: 12331) If the plant has a book value of Rs. 20 lakhs and scrap value is Rs. 50000, sunk cost is Rs.___. a)20,50,000 b) 19,50,000 c)20,00,000 d)50,000332) under marginal costing, variable costs are charged against ___, and fixed expenses against ___a) Operations, profit b) profit, operations c) operations, not included d) not included, profit333) Fixed cost = ___ if sales = rs.200,000; variable cost = rs.40000 and profit = rs. 30000 a) 310,000 b) 130,000 c) 160,000 d) 10,000334) MCSR = ___ when VC=24,000 and sales = 60,000 a) 50% b) 40% c) 60% d) 61.83%335) PV ratio can be improved by ___. a) Reducing sales b) increasing selling price c) stabilizing variable costs d) extending credit period336) At ____ point, the company breaks even. a) Only profit b) only loss c) no profit, no loss d) only profit, no loss 337) FC = 8000; profit = 2000; BEP sales = 40,000; Actual sales = ? a) 30,000 b) 50,000 d) 42,000 d) 38,000338) difference between Actual sales and BEP sales is ___. a) Break even point b) desired profit c) contribution d) margin of safety

Unit: 13361) ___ are irrelevant in decision making. a) Sunk b) opportunity c) avoidable d) marginal 362) Make or buy decisions arises with a company having ____ production capacity. a) Alternative b) unused c) overused d) useful 363) CIMA means ___. a) Cost Institute of management audit b) Critical institution for management aids c) Certified Institution of Managing Anger d) Chartered Institute of management accounting

Unit: 14391)Objectives of budgetary control are ___ a) Standardizing & decentralizing b) forecasting & co-ordination c) show off d) haphazard use of money392) Fixing the goals and targets is a ___ of budgetary control.a) De-merit b) merit c) use d) both (a) & (b)393) ____ are the foundation of budgets. a) Policies b) system c) forecast d) budget committee394) ___ budget includes sales budget and production budget. a) Functional b) fixed c) flexible d) master 395) Cash budget is a ___ budget. a) Flexible b) functional c) short-term d) medium term 396) popularly, the flexible budget is adopted for ____ budget. a) Variable expenses b) semi-fixed costs c) total cost d) production cost 397) ___ budgeting is a method of budgeting where all activities are revalued each time budget is set. a) Zero based b) Long term c) master d) fixed

Unit: 15421) ___ cost is a cost which is calculated from managements standardsa) Marginal b) operating c) standard d) actual422) the difference between standards and actual is called___. a) Standard deviation b) variance c) deviation d) break-even 423) primary objective of standard costing is ___. a) Cost control b) co-ordination c) reporting d) measuring424) ___ standards make the employees cost conscious. a) Expected b) historical c) normal d) perfect 425) __ _ standards are next to ideal standards. a) Expected b) historical c) normal d) perfect426) the scope of budgetary control is ___. a) Wide b) narrow c) limited d) either (a) or (b)427) when actual cost is less than standards, it is ____, otherwise ____. a) Unfavorable, unfavorable b) unfavorable, favorable c) favorable, unfavorable d) favorable, favorable428) ___ = (SQ-AQ) SP 15 a) MPV b) MUV c) MMV d) MYV429) SQ= 10 KGs; SP=rs.2; AQ= 12 KGs. MUV=? a) 4 b) 5 c) -4 d) -5 430) MYV is a ___ variance.a) Inputb) Outputc) combination d) usage431) ___ arises only when different types of workers are employed in manufacturing.a) Labor efficiency varianceb) Labor rate variancec) Labor mix varianced) Labor yield variance432) LYV = (Actual ___ - standard ___) X standard cost per unit.a) Output, outputb) price, pricec) output, priced) price, output

FIN. MGMT MCQS1. The book in which the transactions are first recorded is called a _____________.a. Ledgerb. Balance sheetc. Journald. Posting2. Accounting measures the _________ performance of an enterprise.a. Financialb. Annualc. Functionald. Growth3. ______________ facilitates more disclosure of financial information that is beyond thestatutory limits.a. Change in accounting policiesb. Accounting conventionsc. Accounting conceptsd. Accounting standards4. In a double entry book keeping system, an account which is the receiver of benefit, isalso called as __________.a. Outgoing aspectb. Incoming aspectc. Profitsd. Giving aspect5. The bill of exchange drawn by the creditor becomes a valid document after it is signed by the______.a. Ownerb. Partners of the firmc. Debtord. Bank6. If the trial balance does not tally, the accountant has to proceed with spotting errors. For thispurpose a temporary account called ____________ is opened.a. Subsidiary Accountb. Profit & Loss Accountc. Suspense accountd. Ledger Account7. ___________ is also called outstanding income.a. Outstanding expensesb. Prepaid expensesc. Income received in advanced. Accrued income8. The future of a company is a result of the __________ today by the management.a. Decisions takenb. Goals plannedc. Strategies maded. Roles defined9. __________ is the ability of a firm to satisfy its short-term obligations as they become due forpayment.a. Liquidityb. Solvencyc. Activityd. Currency10. Which of the following is a cash outflow for the firm?a. Repaying of mortgage loans.b. Loss on sale of fixed assets.c. Creation of reserves for bad debts.d. Amortisation of goodwill.11. A location, an equipment, a person or a group of these, for which costs can be charged areknown as ________________.a. Cost centreb. Profit centrec. Resourcesd. Liabilities12. What is the significance when we say that the C/S ratio may also be used for determining thedesired volume of output for a specified amount of profit?a. Measure of profitabilityb. Product mix decisionc. Profit planningd. Intra-firm comparison13. In which method of budgeting all activities are revaluated each time a budget is set?a. Flexible Budgetingb. Zero Based Budgetingc. Short-term Budgetingd. Medium-term Budgeting14. ________________ a system which seeks to control the cost of each unit or batch by determining The cost in advance.a. Marginal costingb. Uniform costingc. Standard costingd. Full costing15. What do you call the reduction granted by a supplier to a customer on the amount of bill due,considering payment within the credit period?a. Trade discountb. Amountc. Cash discountd. Goodwill16. ________________ is a resource legally owned by the enterprise as a result of past events andfrom which future economic benefits are expected to flow to the enterprise.a. Capitalb. Sharec. Assetd. Fixed asset17. Which step explains the importance of all the data in a manner that the end users of financialstatements can make a meaningful judgment about the financial position and profitability of thebusiness?a. Identificationb. Summarisingc. Analysingd. Interpreting18.________________ is required to help comparison of financial data from one period toanother.a. Materialityb. Double aspectc. Consistencyd. Conservatism19. IFRS apply to ___________ and consolidatedfinancial statements.a. Conglomerateb. Private firmsc. Individual companyd. Public sector units20. ____________ can be measured in terms of money, goodwill or patent rights.a. Intangible accountsb. AssetsC. Incomed. Tangible accounts21. According to traditional approach, which of these falls under personal account?a. Capital accountb. Cashc. Purchasesd. Interest received22. Which amongst the following form a part of the format of a sales book?a. Purchase invoice numberb. Name of the supplierc. Credit periodd. Ledger folio23. The subsidiary books are maintained for transactions that occur most repeatedly and are____________.a. Most voluminousb. High in valuec. Not recorded in final accountsd. Rarely noticed24. Rectification entries are recorded in _________________ If the errorssuch as wrong posting, wrong casting, wrong calculation etc., arecommitted in the books of original entry or ledger.a. General journalb. Suspense accountc. Trading Accountd. Trial balance25. The accounts of _________________ will not be closed becausethey continue to exist further.a. Assets and liabilitiesb. Salaries Expensesc. Revenue from Servicesd. Telephone Expenses26. Which amongst the following is recorded as credit to the trading account?a. Depreciationb. Bad debtsc. Reserves for discount on debtorsd. Closing stock27. The excess of direct incomes over direct expenses is called ____________.a. Net profitb. Profitc. Gross profitd. Balance28. Which function of management accounting needs various departments to be consulted andis responsible for policy decisions?a. Forecastingb. Planningc. Co-ordinationd. Controlling29. Who amongst the following are the primary users of management accounting?a. Shareholdersb. Lower level managersc. Creditorsd. Government authorities30. Horizontal analysis is also referred to as ________________.a. Common size statementsb. Trend analysisc. Comparative statementsd. Income statements31. In which analysis, the sales are converted into 100 and the components are proportionatelyconverted?a. Vertical analysisb. Trend analysisc. Ratio analysisd. Horizontal analysis32. As per The Institute of Chartered Accountants of India ( ICWAI), preparation of cash flowstatement every year and presenting it along with financial statements is mandatory for thecompanies listed on a stock exchange with a turnover of _________________.a. Rs.10 crore or moreb. Rs.25 crore or morec. Rs.50 crore or mored. Rs.100 crore or more33. Which of the following is a source of funds?a. A decreased in account payable.b. A decreased in account receivable.c. Cash dividends paid in the period.d. Investment in new plant.34. What do you define the the cost of indirect materials, indirect labour, and indirect expenses?a. Factory overheadb. Distribution overhead costc. Fixed costd. Variable cost35. ________________ is the cost that has already been incurred and it is generally unavoidablebecause this cost cannot be changed once incurred.a. Relevant costb. Sunk costc. Opportunity costd. Period cost36. The change in costs and revenues is ___________ to the change in volume (number of unitssold).a. Indirectly proportionalb. Equalc. Proportionated. Not related37. Functional budget is also known as _________________.a. Subsidiary budgetb. Fixed budgetc. Flexible budgetd. Cash budget38. Cash budget is a _________________.a. Short-term budgetb. Medium-term budgetc. Long-term budgetd. Weekly budget39. Standard costing may be used as a basis for price fixing and ___________.a. Cost controlb. Cost revisionc. Evaluating costd. Decision making40. The difference between the standard cost and actual cost is called as ____________.a. Marginb. Variancec. Differential costd. Deviation41. The claims on assets will always be equal to the ____________.a. Assetsb. Liabilitiesc. Equityd. Capital42. Which account deals with the amount charged for goods sold or services rendered?a. Capital accountb. Liabilities accountc. Revenue accountd. Expenses account43. For preparation of which book, do we need to know about the bill of exchange?a. Sales return bookb. Bills receivable bookc. Purchases return bookd. Sales book44. Treating income as liabilities is _________________.a. An error of omissionb. An error of commissionc. An error of principled. Compensating Error45. If the errors such as wrong posting, wrong casting, wrong calculation etc., are committed inthe books of original entry or ledger, it is said to be _________________.a. Compensating errorsb. An error of principlec. Complete omissiond. An error of commission46. Which process responds to divergences from the plan?a. Planning processb. Control processc. Leading processd. Organising process47. Which ratio is also known as acid test ratio?a. Current ratiob. Quick ratioc. Cash ratiod. leverage ratio48. Analysing and interpreting accounts requires skill, knowledge and __________.a. Expertiseb. Experiencec. Intelligenced. Practice49. Which costing method is used to accumulate costs for different components of theproduct and then combine them?a. Batch costingb. Contract costingc. Composite costingd. Unit costing50. Costs are classified according to the __________ of the cost, in case of marginal costing.a. Functional basisb. Administrative costc. Behaviourd. Operational basis51. Consider the following statements:I. A/An ____________ in a company is one of the units into which the total capital of thecompany is divided.II. In ______________ transactions, there is no cash inflow or outflow, but adjustment is madeonly in the records.a. 1- Sole trader, 2- Partnershipb. 1- Asset 2- Paperc. 1- Entity, 2- Capitald. 1- Share, 2- Paper52. Consider the following statements:1. In case of any changes in the accounting policies, if the change has a material effect in currentperiod and the effect of change is ascertainable, the amount of change should be disclosed.2. In convention of double aspect, the claims of owners are called Equity or Capital, the claims ofoutsiders are called materiality.State True or False:a. 1- False, 2- Falseb. 1- False, 2- Truec. 1- True, 2- Trued. 1- True, 2- False53._____________ and ___________ are the two basic words in accounting.a. Debit, expensesb. Credit, liabilityc. Asset, capitald. Debit, credit54. Consider the following statements:1. Purchases returns refer to goods returned to the supplier out of purchases made from him.2. Cash discount may vary with the quantity purchased.State True or False:a. 1- True, 2- Falseb. 1- False, 2- Truec. 1- True, 2- Trued. 1- False, 2- False55. If the errors ________ and ________ are committed in the books of original entry or ledger, itis said to be error commission.a. Wrong posting, wrong calculationb. Wrong casting, omissionc. Inadequate depreciation, insufficient provision for bad and doubtful debtsd. Wrong calculation, omission56. 1. The other name for provision for doubtful debts is __________.2. The provision for bad debts is a charge against profit it must be debited to the ___________account.a. 1- Reserve for bad debts, 2- profit and lossb. 1- Provision for bad debts, 2- profit and lossc. 1- Reserve for bad debts, 2- tradingd. 1- Provision for bad debts, 2- trading57. Consider the following statements:1. It may be done with a balance sheet (comparative balance sheet) as well as with profit and lossa/c or income statement (Comparative Profit and Loss a/c / Income Statement.)2. One of the advantage of ratio analysis is that it helps in assessing firms progress andperformance and inter-firm comparison with industry average.State True or False:a. 1- True, 2- Trueb. 1- False, 2- Falsec. 1- False, 2- Trued. 1- True, 2- False58.________ and ________ are the examples of operating activities.a. Cash receipts from royalties, Cash receipts from sale of goodsb. Cash receipts from royalties, Cash receipts from disposal of fixed assetsc. Cash receipts from disposal of fixed assets, Cash proceeds from issuing sharesd. Cash payments to employees, Cash proceeds from issuing shares59. Consider the following statements:1. _________________ is the volume of activity or sales when the organisations revenues andexpenses are equal.2. ______________ analysis provides the management with a comprehensive overview of theeffects on revenue and costs of all types of short run financial changes.a. 1- Marginal Costing, 2- Break-Even Chartb. 1- Margin of Safety (MOS), 2- Break-Even Analysisc. 1- Target Profit, 2- Profit Volume Ratio (MCSR or C/S ratio)d. 1- Break-Even Point, 2- Cost Volume Profit (CVP)60.1. The aggregate of indirect materials, indirect labour, and indirect expenses is called_____________.2. The standard fixed overhead rate is computed by dividing the budgeted fixed overheads with_______________.a. 1- Administrative cost, 2- sales output.b. 1- Factory overhead, 2- budgeted output.c. 1- Mixed cost, 2- standard output.d. 1- Costing elements, 2- actual output.61. 1. A/An _______________ creditor is a person to whom the business owes money forgoods purchased from him or her on credit.2. A _________________ is the financial statement, which shows the amount and nature ofbusiness assets, liabilities and owner's equity at a specific point in time.a. 1- Expenses, 2- Opening stockb. 1- Creditor for asset purchased, 2- Bill of exchangec. 1- Trade, 2- Balance sheetd. 1- Loan, 2- Trial balance62.Consider the following statements:1. Income earned for an accounting period must be _____________ in that accounting periodregardless of whether it is actually received in that accounting period or not.2. Apart from the mandatory disclosures, the company may give additional disclosures. These arecalled ______________ disclosures.a. 1- Revised, 2- Materialityb. 1- Shared 2- Prudencec. 1- Deleted, 2- Involuntaryd. 1- Recorded, 2- Voluntary63. Consider the following statements:1. Events happen as a result of internal policies or external needs.2. In credit transaction cash flows immediately.State True or False:a. 1- True, 2- Falseb. 1- False, 2- Truec. 1- True, 2- Trued. 1- False, 2- False64.Consider the below mentioned statements:1. An error in a trial balance is an unintentionally committed mistake.2. Errors of casting, posting to wrong side of an account or posting a wrong amount can bedetected by trial balance.State True or False:a. 1-False, 2-Falseb. 1-True, 2-Truec. 1-False, 2-Trued. 1-True, 2-False65. The reasons for depreciation could be permanent fall of market price, ________________and _____________.a. Wear and tear, devaluationb. Sensex downfall, heavy usagec. Wear and tear, outdated technologyd. Heavy usage, devaluation66. Consider the following statements:1. A process of comparing the ratios to industry averages to show how the company can becompared with firms of the same size in its industry is known as ________________.2. ______________ ratio/s are concerned with measuring the efficiency in asset management.a. 1- Trend analysis, 2- Assets turnoverb. 1- Horizontal Analysis, 2- Creditor's turnoverc. 1- Vertical Analysis, 2- Stock turnoverd. 1- Cross-sectional analysis, 2- Turnover67. Cost of goods sold = Cost of production + ____________- ____________.a. Closing WIP, opening WIPb. Opening WIP, Closing finished goodsc. Closing finished goods, Opening WIPd. Opening finished goods, Closing finished goods68. Consider the following statements with respect to Profit Volume Ratio (MCSR or C/Sratio):1. Products having low C/S ratio can be continued and the products having high C/S ratio canbe improved to catch up in the market to increase the profitability.2. The C/S ratio may be computed using the following formulae.:State True or False:a. 1- False, 2- Trueb. 1- True, 2- Falsec. 1- True, 2- Trued. 1- False, 2- False69. Consider the below mentioned statements with respect to the objectives of budgetarycontrol.1. To decentralize management control.2. To help in controlling cash.State True or False:a. 1-True, 2-Trueb. 1-False, 2- Falsec. 1-False, 2-Trued. 1-True, 2-False70. 1. Variance analysis is the process of analyzing variances by sub-dividing the total variance in such a way that the management can assign responsibility for ___________performance.2. When the actual cost is less than the standard cost, the difference is termed as___________ Variance.a. 1- Average, 2- adverse.b. 1- Expected, 2- debit.c. 1- Unacceptable, 2- unfavorable.d. 1- Off-standard, 2- credit.71. "Consider the following statements:1. The earliest attempt towards harmonization of accounting practices at the international level was made by the International Accounting Standards Committee (IASC).2. In India, the Institute of Chartered Accountants of India (ICAI) established Accounting StandardsBoard (ASB) in 1977."State True or False:a. 1- True, 2- Trueb. 1- False, 2- Falsec. 1- False, 2- Trued. 1- True, 2- False72.1. __________________ book is meant for recording purchases.2. _______________ does not appear in the books of accounts.a. 1- Bills payable, 2- Credit periodb. 1- Purchases returns, 2- Debit accountc. 1- Purchases, 2- Trade discountd. 1- Sales, 2- Cash discount73. 1. One of the objectives of cost management system is to provide cost information for____________ control.2. Cost management system is used to identify and evaluate new activities that can improve the future__________ of an organization."a. 1- Management, 2- strategiesb. 1- Operational, 2- performancec. 1- Directional, 2- profitsd. 1- Functional, 2- goals74. Consider the following statements:1. Marginal cost per unit remains unchanged irrespective of the level of activity or output. It is alsoknown as variable cost.2. The marginal cost of producing a unit declines as output increases."State True or False:a. 1- True, 2- Trueb. 1- False, 2- Falsec. 1- False, 2- Trued. 1- True, 2- False75. As per the needs of the management, only ____________ may be prepared.2. Budgetary control compares the actual cost with __________."a. 1- Operational budget, 2- planned cost.b. 1- Functional budget, 2- pre-determined standards.c. 1- Quarterly budget, 2- historical data.d. 1- Annual budget, 2- marginal cost.