All Free Accounting MCQs with Answers

• A. math plan model
• B. financial planning models
• C. operating plan models
• D. master plan modelsFinance

Explanation: Financial planning models express the mathematical relationships among operating activities, financing activities and their effect on the…

• A. complexity
• B. process
• C. budget
• D. batching

Explanation: A budget is a formal plan expressed in financial and, where relevant, non-financial terms, such as units of production or labour hours.

• A. coordination
• B. communication
• C. annual profit plan
• D. budgetingAccounting & Auditing

Explanation: Communication ensures that employees understand organisational goals and their own responsibilities in achieving them.

• A. budget
• B. batching
• C. complexity
• D. process

Explanation: A budget quantifies expected cash flows, income and financial position for a future period.

• A. market budget
• B. price schedule
• C. planned schedule
• D. cash budgetCompare Credit Cards

Explanation: A cash budget forecasts expected cash receipts, cash payments, and the resulting cash position for a planned operating level.

• A. 4000 units
• B. 5000 units
• C. 8000 units
• D. 10000 unitsHire An Accountant

Explanation: Budgeted production equals budgeted sales plus desired ending inventory minus beginning inventory: 5,000 + 4,000 − 1,000 = 8,000 units.

• A. cost based budgeting
• B. activity based budgeting
• C. production based budgeting
• D. raw material budgeting

Explanation: Activity-based budgeting estimates the costs of activities required to produce and sell offerings, using activities and their cost drivers…

• A. period budget
• B. batch budget
• C. discontinued budget
• D. continuous budget

Explanation: A continuous, or rolling, budget is continuously updated so that a specified future period remains covered as each period ends.

• A. direct manufacturing labor-hours
• B. setup labor-hours
• C. budgeted labor-hours
• D. both a and b

Explanation: Manufacturing overhead may be driven by direct labour-hours and by setup labour-hours, depending on the activities causing the overhead.

• A. manager cost
• B. influential cost
• C. center cost
• D. controllable costCompare Credit Cards

Explanation: A controllable cost is one that a responsibility-centre manager can significantly influence within the relevant period.

• A. decentralization
• B. centralization
• C. autonomy of effort
• D. congruency

Explanation: Decentralization gives lower-level managers authority to make decisions within their areas.

• A. mobile products
• B. dysfunctional products
• C. intermediate product
• D. territorial product

Explanation: An intermediate product is transferred from one subunit to another for further processing or use.

• A. motivation
• B. goal congruence
• C. effort
• D. autonomy

Explanation: Effort is the exertion or energy applied to achieve a goal. Motivation is the force that stimulates effort, while autonomy means…

• A. $45
• B. $110
• C. $20
• D. $65

Explanation: The minimum transfer price equals incremental cost plus opportunity cost: $65 + $45 = $110 per barrel.

• A. motivation
• B. goal congruence
• C. effort
• D. autonomy

Explanation: Goal congruence exists when individuals or subunits coordinate their actions toward the organization’s overall goal.

• A. market-based transfer prices
• B. cost-based transfer prices
• C. negotiated transfer prices
• D. all of above

Explanation: Transfer prices may be based on external market prices, cost information, or negotiations between subunits.

• A. minimum operating cost
• B. maximum operating costs
• C. maximum transfer price
• D. minimum transfer price

Explanation: The selling subunit’s minimum transfer price is its incremental cost plus the opportunity cost of the resources used.

• A. total autonomy
• B. total centralization
• C. total decentralization
• D. total congruency

Explanation: Total decentralization places decision-making authority with lower-level managers and imposes relatively few constraints.

• A. subunit autonomy cost
• B. transfer price
• C. performance prices
• D. effort cost

Explanation: A transfer price is the amount charged when one subunit supplies goods or services to another subunit of the same company.

• A. dual pricing
• B. functional pricing
• C. congruent pricing
• D. optimal pricing

Explanation: Dual pricing is used when the same transfer of goods or services is recorded using two different prices, usually one for each of the…