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Management Accounting MCQ Questions and Solutions with Explanations | Management

Management Accounting MCQ Questions and answers with easy and logical explanations. Management provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Management MCQ is important for exams like MAT, CAT, CA, CS, CMA, CPA, CFA, UPSC, Banking and other Management department exam. Page-3 section-2

Each section contains 100 MCQs on Management Accounting .
21
Dimensional analysis of cost includes
Discuss
Answer & Solution
Answer: Option D
Solution:
Dimensional analysis of cost includes horizontally across dimension and vertically upward dimension.
22
Capital budgeting method to analyze information of financials include
Discuss
Answer & Solution
Answer: Option D
Solution:
Capital budgeting method to analyze information of financials include internal rate of return, accrual accounting rate of return and net present value. The process involves analyzing a project's cash inflows and outflows to determine whether the expected return meets a set benchmark. The major methods of capital budgeting include throughput, discounted cash flow, and payback analyses.
23
Payback period is multiplied for constant increase in yearly future cash flows to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Payback period is multiplied for constant increase in yearly future cash flows to calculate net initial investment. Net investment is the amount spent by a company or an economy on capital assets, or gross investment, less depreciation. Net investment helps give a sense of how much money a company is spending on capital items used for operations, such as property, plants, equipment, and software.
24
Rate of return, which is made up of risk free and business risk element is known
Discuss
Answer & Solution
Answer: Option C
Solution:
Rate of return, which is made up of risk free and business risk element is known as real rate of return. A real rate of return is the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external factors.
25
Sum of returned working capital and net initial investment is divided by 2 to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Sum of returned working capital and net initial investment is divided by 2 to calculate average investment over five years.
26
Project's expected monetary loss or gain by discounting all cash outflows and inflows, using required rate of return is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Project's expected monetary loss or gain by discounting all cash outflows and inflows, using required rate of return is classified as net present value. Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
27
Rate of required return to cover risk of investment in absence of inflation is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Rate of required return to cover risk of investment in absence of inflation is classified as real rate of return. A real rate of return is the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external factors.
28
Annual earned income is divided from a project by capital invested to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Annual earned income is divided from a project by capital invested to calculate accrual accounting rate of return. The accrual accounting rate of return takes the accounting rate of return calculation and applies the accrual method of accounting.
29
Horizontally across dimension of cost analysis is also called
Discuss
Answer & Solution
Answer: Option A
Solution:
Horizontally across dimension of cost analysis is also called project dimension.
30
According to net present value, projects that would be acceptable must have a
Discuss
Answer & Solution
Answer: Option D
Solution:
According to net present value, projects that would be acceptable must have a zero net present value and positive net present value.