Management Accounting MCQ Questions and Answers for Practice

1. Management accounting is primarily concerned with:

1. Providing information to external users
2. Providing information to internal users
3. Auditing financial statements
4. Filing tax returns

2. Return on investment (ROI) is calculated as:

1. Net income / Sales
2. Sales / Total assets
3. Net income / Total assets
4. Total assets / Net income

3. Which of the following is a technique used for capital budgeting?

1. Payback period
2. Net present value (NPV)
3. Internal rate of return (IRR)
4. All of the above

4. Activity-based costing (ABC) is a method of:

1. Inventory valuation
2. Cost allocation
3. Budgeting
4. Performance evaluation

5. Which of the following is NOT a benefit of using standard costs?

1. Cost control
2. Performance evaluation
3. Inventory valuation
4. Increased complexity

6. A just-in-time (JIT) inventory system is designed to:

1. Minimize inventory levels
2. Maximize inventory levels
3. Reduce production costs
4. Improve product quality

7. Which of the following is NOT a component of the balanced scorecard?

1. Financial perspective
2. Customer perspective
3. Internal business process perspective
4. None of the above (all are components)

8. Which of the following is a technique used for performance measurement?

1. Benchmarking
2. Key performance indicators (KPIs)
3. Management by objectives (MBO)
4. All of the above

9. Which of the following is NOT a type of responsibility center?

1. Cost center
2. Revenue center
3. Profit center
4. Expense center

10. Which of the following is a method of transfer pricing?

1. Market-based pricing
2. Cost-based pricing
3. Negotiated pricing
4. All of the above

11. Which of the following is NOT a benefit of decentralization?

1. Improved decision-making
2. Increased motivation
3. Reduced workload for top management
4. Increased control for top management

12. Which of the following is NOT a characteristic of management accounting information?

1. Future-oriented
2. Subjective
3. Highly aggregated
4. Relevant

13. Which of the following is a limitation of using financial ratios for performance evaluation?

1. Ratios can be manipulated
2. Ratios are based on historical data
3. Ratios may not be comparable across companies
4. All of the above

14. Which of the following is NOT a type of budget?

1. Master budget
2. Flexible budget
3. Static budget
4. Variable budget

15. Which of the following is a method of cost estimation?

1. High-low method
2. Regression analysis
3. Scattergraph method
4. All of the above