Accounting For Managers

21. The amount of salary paid to Suresh should be debited to

  1. The account of Suresh
  2. Salaries a/c
  3. Cash a/c
  4. Bank a/c
Correct answer: (B)
Salaries a/c

22. The cash discount allowed to a debtor should be credited to

  1. Discount a/c
  2. Customer a/c
  3. Sales a/c
  4. None of these
Correct answer: (B)
Customer a/c

23. Accounting does not record non-financial transactions because of:

  1. Accrual concept
  2. Cost concept
  3. Continuity concept
  4. Money measurement concept
Correct answer: (D)
Money measurement concept

24. The concept of separate entity is applicable to which of following types of businesses?

  1. Sole proprietorship
  2. Corporation
  3. Partnership
  4. All of them
Correct answer: (D)
All of them

25. Accounting is the process of matching

  1. Benefits & Costs
  2. Revenues & Costs
  3. Cash Inflow & Cash Outflow
  4. Potential & Real Performance
Correct answer: (B)
Revenues & Costs

26. The primary objective of cost accounting is

  1. Ascertain the cost of goods and services
  2. Ascertain the profit
  3. Presentation of all data
  4. None of these
Correct answer: (A)
Ascertain the cost of goods and services

27. Of the following account types, which would be increased by a debit?

  1. Liabilities and expenses.
  2. Assets and equity.
  3. Assets and expenses.
  4. Equity and revenues.
Correct answer: (C)
Assets and expenses.

28. Which of the following statements about differences between financial and managerial accounting is incorrect?

  1. Managerial accounting information is prepared primarily for external parties such as stockholders and creditors; financial accounting is directed at internal users.
  2. Financial accounting is aggregated; managerial accounting is focused on products and departments.
  3. Managerial accounting pertains to both past and future items; financial accounting focuses primarily on past transactions and events.
  4. Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors.
Correct answer: (A)
Managerial accounting information is prepared primarily for external parties such as stockholders and creditors; financial accounting is directed at internal users.

29. Custom and traditions which guide the accountant while preparing the accounting statements

  1. Accounting convention
  2. Accounting concepts
  3. Accounting principles
  4. None of these
Correct answer: (C)
Accounting principles

30. Balance Sheet is a statement of

  1. Assets
  2. Liabilities
  3. Capital
  4. All of these
Correct answer: (D)
All of these
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