Chapter1909 PDF

All in One
Multiple Choice Questions

ABD ● EABD ● LAB ● BRM ● OB ● BOM
(As per the Revised Syllabus of 2016 Pattern of SPPU for MBA, Semester - I)
Dr. Abhijit Mancharkar Dr. Shriprakash Soni

Professor and Head, Assistant Professor,
MIT College of Engineering’s Centre for MIT College of Engineering’s Centre for
Management Studies and Research (CMSR), Management Studies and Research (CMSR),
Kothrud, Pune - 411038, Kothrud, Pune - 411038,
Maharashtra, India. Maharashtra, India.
Prof. Deepali Desai Prof. Amey Joshi

Assistant Professor, Assistant Professor,
MIT College of Engineering’s Centre for MIT College of Engineering’s Centre for
Management Studies and Research (CMSR), Management Studies and Research (CMSR),
Kothrud, Pune - 411038, Kothrud, Pune - 411038,
Maharashtra, India. Maharashtra, India.
Prof. Rohini Sawalkar – Saxena

Assistant Professor,
MIT College of Engineering’s Centre for
Management Studies and Research (CMSR),
Kothrud, Pune - 411038,
Maharashtra, India.
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FOREWORD
As always said and believed by visionary educationist and founder of MIT, Hon. Prof.
Dr. Vishwanath D. Karad, we aim to provide an inspiring and conducive environment to students for
learning, skill enhancement, research and innovation, entrepreneurship development and character
building to help them become “physically strong, mentally alert, intellectually sharp and spiritually
elevated” and thereby turn into “winning personalities”.
Established in 1983, MIT Group of Institutions now boasts an illustrious presence in the academic
arena. Its 71 institutions have established a legacy of mentoring and shaping the future of 60,000
students at any point of time. MIT College of Engineering, Pune is a premier institute providing quality
technical education. It is an ISO certified institute and is ranked amongst ‘Top 100 engineering colleges in
the country, by ‘NIRF’ framework of Ministry of HRD, Government of India. It has five engineering
departments along with the ‘MBA Department’ which is popularly known as ‘Centre for Management
Studies and Research (CMSR)’. MITCOE CMSR has reputation for innovative teaching pedagogy,
highly qualified and experienced faculty members, student development initiatives, state-of-art
infrastructure, strong industry interface and socially useful research.
MITCOE CMSR has always focused on the holistic development of students. I am happy that the
MBA Department is conducting plethora of curricular, co-curricular, extra-curricular and extension
activities for developing overall personality of students. We firmly believe that quality of education
depends on quality of faculty members and hence developed an eco-system for their development.
I am happy to share with you that our proud faculties Prof. Dr. Abhijit Mancharkar, Prof. Dr.
Shriprakash Soni, Prof. Deepali Desai, Prof. Amey Joshi and Prof. Rohini Sawalkar-Saxena have
written a book titled ‘All in One Multiple Choice Questions’ for MBA Semester - I as per Revised
Syllabus of 2016 Pattern of SPPU. This book has added a feather in the cap of MITCOE CMSR. I am
sure that this book will prove to be a very effective tool for the students in understanding both the
concepts and their practical applications.
My heartiest congratulations to Team MITCOE CMSR for this endeavour and wish them luck for
many such landmark achievements in their life!
Prof. Dr. Mangesh T. Karad
Secretary and Trustee,
MIT Group of Institutions, Pune.
PREFACE
It gives us great pleasure to present this book titled, ‘All in One Multiple Choice Questions’ for
MBA Semester - I as per Revised Syllabus of 2016 Pattern of SPPU to our intelligent and dynamic
students of MBA Programme.
As per revised syllabus, one of the components of student evaluation for full credit course is
online examination. This examination is conducted for 20 marks. The question paper contains
20 multiple choice questions for the respective course. The syllabus for the exam is all five units of the
full credit course.
Multiple Choice Questions is a very effective tool for evaluation of management students as it
checks the conceptual understanding of the students about a particular topic.
What we have observed is, to score good marks in this type of examination, the most important
factor for the students is practicing these type of questions regularly. Keeping this in mind, this book
contains 50 questions each for each unit of all the six full credit courses in the syllabus. We have made
sure that the questions cover the various aspects of the unit.
We also feel confident that this book will serve as a very effective tool for the students for
securing good marks in online examination of SPPU and will also enhance their conceptual
knowledge of various courses.
Success can never be achieved single handedly, so it is our duty to express our heart felt gratitude
towards all those who provided inspiration, guidance and support. We express our special thanks to
Prof. Dr. V.D. Karad, Founder President and Managing Trustee of MAEER’s MIT, Prof. Rahul V.
Karad – Vice President, MAEER’s MIT, Prof. Dr. Mangesh Karad – Secretary and Executive Director,
MAEER’s MIT Group of Institutions. We would like to thank Prof. Dr. Ramachandra V. Pujeri,
Director, MITCOE and Prof. Dr. Manoj Nagmode, Principal, MITCOE for their continuous
motivation in writing this book. In addition, we wish to express our gratitude to our colleagues for
their help and support. We would also like to express our sincere thanks to the Publisher of Himalya
Publishing House Pvt. Ltd., Mr. S.K. Srivastava – Regional Manager, Mr. Abhijit, Ms. Lalita and all
the staff members of Himalaya Publishing for their willing cooperation and support. Our words fall
short to express our feelings towards our family members, colleagues and our friends who extended
their wholehearted best wishes and encouraged us throughout.
We wish all the very best to all the students for their future!
Authors
SYLLABUS
Syllabus as per June 2016 Pattern
Semester I Specialization NA
Course Code 101 Type Generic Core
Course Title Accounting for Business Decisions (ABD)
Course Objectives:
● To understand the basic concepts of financial accounting, cost accounting and management accounting.
● To know various tools from accounting and cost accounting which would facilitate the decision making.
● To develop analytical abilities to face the business situations.
Unit No. Contents No. of

Sessions
Unit – 1 Basic Concepts: Meaning of business decisions and importance of business decisions. Hours:
Forms of business organizations, meaning of accounting, basic concepts, terms used in 6+2
business accounting. Types of accounts, journal, ledger and trial balance. Accounting
equations and users of accounting information. Accounting concepts and conventions.
Difference between financial accounting, cost accounting and management accounting,
Use and applicability of Tally in accounting.
Unit – 2 Understanding of Financial Statements: Meaning of Financial statements. Importance Hours:
and objectives of financial statements. Preparation of final accounts of sole proprietary 8+2
firm. Making financial decisions on the basis of financial statements.
Unit – 3 Cost Accounting: Basic concepts of cost accounting. Objectives of Cost Accounting, Hours:
Classification and analysis of costs, Relevant and irrelevant costs, differential costs, sunk 6+2
costs, Preparation of Simple Cost sheet.
Unit – 4 Cost Control: Material cost control, Procurement, Pricing of issues, Inventory control Hours:
techniques, Fixation of various levels, Economic order quantity, material losses, Labour 7+2
cost control, time keeping and time booking, Overheads, Collection, Classifications,
allocation and apportionment of overheads.
Unit – 5 Decision making tools: Marginal costing, Break-even point, Cost–Volume–Profit Hours:
analysis, Optimizing Product Mix, Pricing decisions. Budgeting –– Cash and Flexible 8+2
Budgets only, Standard Costing – Material and Labour Variances only.
Note:
1. Weightage of Theory Questions will be 30% and Numerical Problems will carry 70% marks in the final
question paper.
2. Numerical Problems will be asked on the following topics:
● Preparation of Financial Statements of Proprietary Concerns.
● Pricing of issues: FIFO, LIFO, Simple Average and Weighted Average Methods.
● Allocation and Apportionment of Overheads.
● Computation BEP and related areas.
● Optimizing Product Mix. Make or Buy Decisions.
● Cash and Flexible Budgets.
● Computation of Material and Labour Variances.
Course Title Economic Analysis for Business Decisions (EABD)
Course Objectives:
● To equip the students of management with time tested tools and techniques of managerial economics to enable
them to appreciate its relevance in decision making.
● To explore the economics of information and network industries and to equip students with an understanding
of how economics affect the business strategy of companies in these industries.
● To develop economic way of thinking in dealing with practical business problems and challenges.

Sessions
Unit – 1 Basic Concepts of Economics: Introduction to Economics, Basic Economic Problem, Hours:
Circular Flow of Economic Activity, Nature of the firm – rationale, objective of 6+2
maximizing firm value as present value of all future profits, maximizing, satisficing,
optimizing, principal-agent problem, Accounting Profit and Economic Profit, Role of
profit in market system, Adam Smith and Invisible Hand.
Unit – 2 Demand Analysis and Forecasting: Determinants of Market Demand at Firm and Hours:
Industry level – Elasticity of Demand – Market Demand Equation – Use of Multiple 8+2
Regression for estimating demand – Case study on estimating industry demand
(formulating equation and solving with the aid of software expected).
Demand and Supply: Market Equilibrium – Pricing under perfect competition,
monopolistic competition, Case study on pricing under monopolistic competition,
Oligopoly – product differentiation and price discrimination; price-output decision in
multi-plant and multi-product firms.
Unit – 3 Cost Concepts: Cost Concept, Opportunity Cost, Marginal, Incremental and Sunk Hours:
Costs, Cost-Volume-Profit Analysis, Break-even Point, Case Study on marginal costs. 6+2
Risk Analysis and Decision Making: Concept of risk, Expected value computation,
Risk management through Insurance, diversification, Hedging, Decision Tree Analysis,
Case Study on Decision tree technique.
Unit – 4 Money and Capital Markets in India: Role and Functions of Money Markets, Hours:
Composition of Money Market, Money Market Instruments, Reserve Bank of India – 7+2
Functions, Regulatory Role of RBI w.r.t. Currency, Credit and Balance of Payment,
Open Market Operations.
Role and Functions of Capital Markets, Composition of Capital market, Stock
Exchanges in India, Role of SEBI, and understanding of stock market quotations in
financial press expected.
Unit – 5 Public Finance Infrastructure: Familiarity with important terms/agencies/approaches/ Hours:
practices related to National Income (such as GDP, PPP, Growth Rate), Foreign Trade 8+2
(such as GATT, WTO) and union budget (such as Revenue Account, Capital Account,
Revenue Deficit, Fiscal Deficit, Plan and Non-plan expenditure) is expected.
Understanding of Summarized budget for the current financial year is required
(knowledge of detailed budget provisions not required).
Course Title Legal Aspects of Business (LAB)
Course Objectives:
● To acquaint students with general business law issues to help become more informed, sensitive and effective
business leaders.
● To provide the students with an understanding of fundamental legal issues pertaining to the business world to
enhance their ability to manage businesses effectively.

Sessions
Unit – 1 The Indian Contract Act, 1872 Hours:
● Essential Elements of Valid Contract, Performance and Discharge of Contract, 7+2
Breach of Contract – Meaning and Remedies.
● Contracts of Indemnity – Meaning, Nature – Right of Indemnity Holder and
Indemnifier.
● Contract of Guarantee – Meaning, Nature and Features – Types of Guarantee –
Provisions Relating to Various Types of Guarantee.
● Surety and Co-Surety – Rights and Liabilities – Discharge of Surety.
● Agency – Agent and Principal, Creation of Agency – Classification of Agents –
Relationship between Principal and Agent – Agent’s Authority – Revocation and
Renunciation – Rights, Duties and Liabilities of Agents and Principal –
Termination of Agency.
Unit – 2 Sale of Goods Act, 1930 Hours:
● Contract of Sale of Goods – Meaning – Essentials of Contract of Sale – 7+2
Formalities of Contract of Sale.
● Conditions and Warranties, Transfer of Property or Ownership.
● Performance of Contract of Sale.
● Rights of Unpaid Seller – Rules as to Delivery of Goods.
Unit – 3 Negotiable Instruments Act, 1881 Hours:
● Negotiable Instruments – Meaning – Characteristics – Types – Parties – Holder 7+2
and Holder in Due Course.
● Negotiation and Types of Endorsements.
● Dishonour of Negotiable Instruments – Noting and Protesting.
● Liability of Parties on Negotiable Instruments.
Unit – 4 The Companies (Amendment) Act, 2015 Hours:
● Definition and Meaning of One Person Company, Private Company, Small 7+2
Company and Dormant Company.
● Incorporation of a Company and One Person Company, Memorandum of
Association (MOA), Articles of Association (AOA), Prospectus and Public Offer.
● Share Capital and Debentures, Acceptance of Deposits, and Appointment of
Director including Woman Director.
Unit – 5 Other Laws: Hours:
● Consumer Protection Act 1986 – Definitions of Consumer, Consumer Dispute – 7+2
Complaint – Goods – Service – Unfair Trade Practice – Consumer Dispute
Redressal Agencies.
● Information Technology Act – Digital Signature – Electronic Governance.
● Intellectual Property Laws – Understanding of Concepts of Patents, Copyrights,
Trademarks and Designs.
Course Title Business Research Methods (BRM)
Course Objectives:
● To understand the concept and process of business research in business environment.
● To know the use of tools and techniques for exploratory, conclusive and causal research.
● To understand the concept of measurement in empirical systems.
● To use statistical techniques for analysis of research data.

Sessions
Unit – 1 1. Foundations of Research: Hours:
1.1 Research: Definition, Why study Business Research? What is good research? 5+2
Decision Support, Business Intelligence, Research applications in functional areas of
Business, Emerging trends in Business research.
1.2 Research and the Scientific Method: Characteristics of scientific method.
1.3 Steps in Research Process
1.4 Concept of Scientific Enquiry: Formulation of Research Problem – Management
Question – Research Question – Investigation Question.
1.5 Research Proposal: Elements of a Research Proposal, Drafting a Research
Proposal, Evaluating a research proposal (Students are expected to draft and evaluate a
real-life research proposal)
Unit – 2 2. Research Design: Hours:
2.1 Concept, Features of a good research design, Use of a good research design 7+2
2.2 Qualitative research and Quantitative research approaches, Comparison – Pros and
Cons of both approaches.
2.3 Exploratory Research Design: Concept, Types: Qualitative techniques – Projective
Techniques, Depth Interview, Experience Survey, Focus Groups, Observation.
2.4 Descriptive Research Designs: Concept, types and uses. Concept of Cross-sectional
and Longitudinal Research
2.5 Experimental Design: Concept of Cause, Causal relationships, Concept of
Independent and Dependent variables, concomitant variable, extraneous variable,
Treatment, Control group. (Elementary conceptual treatment expected)
2.6 Hypothesis: Qualities of a good Hypothesis – Framing Null Hypothesis and
Alternative Hypothesis, Concept of Hypothesis Testing – Logic and Importance.
Unit – 3 3. Measurement and Data: Hours:
3.1 Concept of Measurement: What is measured? Problems in measurement in 7+2
management research – Validity and Reliability. Levels of measurement – Nominal,
Ordinal, Interval, Ratio.
3.2 Attitude Scaling Techniques: Concept of Scale – Rating Scales, viz., Likert Scales,
Semantic Differential Scales, Constant Sum Scales, Graphic Rating Scales – Ranking
Scales – Paired Comparison and Forced Ranking – Concept and Application.
3.3 Types of Data – Secondary Data: Definition, Sources, Characteristics, Searching
world wide web for data, Issues to be considered for secondary data, sufficiency,
adequacy, reliability, consistency.
3.4 Types of Data – Primary Data: Definition, Advantages and disadvantages over
secondary data,
3.5 Questionnaire Method: Questionnaire Construction – Personal Interviews,
Telephonic survey interviewing, Email/Internet survey, online survey sites, their utility,
constraints
Unit – 4 4. Sampling: Hours:
4.1 Basic Concepts: Defining the Universe, Concepts of Statistical Population, Sample, 6+2
Characteristics of a good sample. Sampling Frame (practical approach for determining
the sample frame expected), Sampling errors, Non-sampling errors, Methods to reduce
the errors, Sample Size constraints, Non-response.
4.2 Probability Sample: Simple Random Sample, Systematic Sample, Stratified
Random Sample, Area Sampling and Cluster Sampling.
4.3 Non-probability Sample: Judgment Sampling, Convenience Sampling, Purposive
Sampling, Quota Sampling and Snowballing Sampling methods.
Determining size of the sample – Practical considerations in sampling and sample size,
(sample size determination formulae and numerical not expected)
Unit – 5 5. Data Analysis and Report Writing: Hours:
5.1 Data Analysis: Editing, Coding, Univariate analysis – Tabular representation of 10+2
data, frequency tables, Construction of frequency distributions and their analysis in the
form of measures of central tendency – Mean, Median and Mode; their relative merits
and demerits.
5.2 Graphical Representation of Data: Appropriate Usage of Bar charts, Pie charts,
Histogram, Leaf and stem, Candlestick, Box plots (Use of MS Excel).
5.3 Bivariate Analysis: Cross tabulations, Use of percentages, Bivariate Correlation
Analysis – meaning and types of correlation, Karl Pearson’s coefficient of correlation
and Spearman’s rank correlation; Scatter plots, Chi-square test including testing
hypothesis of association, association of attributes. (Formulae and calculation are not
expected. Interpretation of the given data and scenario analysis is expected for
appropriate managerial decision inferences to be drawn.)
5.4 Linear Regression Analysis: Meaning and two lines of regression; relationship
between correlation and regression co-efficient (Formulae and calculation are not
5.5 Test of Significance: Small sample tests: t (Mean, proportion) and F tests, Z test,
Non-parametric tests: Binomial test of proportion, Randomness test; Analysis of
Variance: One way and two-way Classifications (Formulae and calculation are not
5.6 Research Reports: Structure of Research report, Report writing and Presentation.
Note: Extensive use of MS Excel is expected in learning Unit No. 5
Course Title Organizational Behaviour (OB)
Course Objectives:
● To gain a solid understanding of human behavior in the workplace from an individual, group, and
organizational perspective.
● To obtain frameworks and tools to effectively analyze and approach various organizational situations.
● To reflect upon your own beliefs, assumptions, and behaviors with respect to how individuals, groups, and
organizations act in order to expand your options of approaches and increase your own effectiveness.

Sessions
Unit – 1 Fundamentals of OB: Definition, scope and importance of OB, Relationship between Hours:
OB and the individual, Evolution of OB, Theoretical framework (cognitive, behavioristic 7+2
and social cognitive), Limitations of OB.
Unit – 2 Individual Process and Behavior: Hours:

2.1 Personality and Attitude: Definition Personality, importance of personality in 8+2
performance, The Myers-Briggs Type Indicator and The Big Five personality model,
Significant personality traits suitable to the workplace (personality and job-fit theory),
Personality Tests and their practical applications, Johari Window – Definition, Attitude –
Importance of attitude in an organization, Right Attitude, Components of attitude,
Relationship between behavior and attitude, Developing Emotional intelligence at the
workplace, Job attitude, Barriers to changing attitudes.
2.2 Perception: Meaning and concept of perception, Factors influencing perception,
Selective perception, Attribution theory, Perceptual process, Social perception
(stereotyping and halo effect).
2.3 Motivation: Definition and Concept of Motive and Motivation, The Content
Theories of Motivation (Maslow’s Need Hierarchy and Herzberg’s Two Factor Model
Theory), The Process Theories (Vroom’s Expectancy Theory and Porter Lawler Model),
Contemporary Theories – Equity Theory of Work Motivation.
Unit – 3 Interpersonal Processes and Behavior, Team and Leadership Development: Hours:
3.1 Foundations of Group Behavior: The Meaning of Group and Group behavior and 8+2
Group Dynamics, Types of Groups, The Five-stage Model of Group Development.
3.2 Managing Teams: Why Work Teams, Work Teams in Organization, Developing
Work Teams, Team Effectiveness and Team Building.
3.3 Leadership: Concept of Leadership, Styles of Leadership, Trait Approach,
Contingency Leadership Approach, Contemporary leadership, Meaning and significance
of contemporary leadership, Concept of transformational leadership, Contemporary
issues in leadership, Contemporary theories of leadership, Success stories of today’s
Global and Indian leaders.
Unit – 4 Organization System: Hours:
4.1 Organizational Culture: Meaning and Definition of Organizational Culture, 5+2
Creating and Sustaining Organizational Culture, Types of Culture (Strong vs. Weak
Culture, Soft vs. Hard Culture and Formal vs. Informal Culture), Creating Positive
Organizational Culture, Concept of Workplace Spirituality.
4.2 Stress Management: Work stress: Meaning of stress, Stressors, Sources of Stress,
Types of stress, Burnout. Stress Management – Individual and Organizational Strategies.
Unit – 5 Managing Change: Hours:

5.1 Organizational Change: Meaning, definition and nature of Organizational Change, 7+2
Types of organizational change, Forces that acts as stimulants to change.
5.2 Implementing Organizational Change: How to overcome the Resistance to
Change, Approaches to managing Organizational Change, Kurt Lewin’s Three-step
model, Seven Stage model of Change and Kotter’s Eight-step Plan for Implementing
Change, Leading the Change Process, Facilitating Change, Dealing with Individual and
Group Resistance, Intervention Strategies for Facilitating Organizational Change,
Methods of Implementing Organizational Change, Developing a Learning Organization.
Course Title Basics of Marketing (BOM)
Course Objectives:
● To introduce marketing as a business function and a philosophy.
● To emphasize importance of understanding external environment in marketing decision making.
● To expose students to a systematic frame work of marketing and implementations and to highlight need for
different marketing approaches for services, goods, and for household consumers, organizational buyers.

Sessions
Unit – 1 Introduction to Marketing: Hours:
1.1 Definition and Functions of Marketing: Scope of Marketing, Core concepts of 10+2
marketing such as Need, Want, Demand, Customer Value, Exchange, Customer and
Consumer, Customer Satisfaction, Customer Delight, Customer Loyalty, Marketing v/s
Market.
1.2 Markets: Definition of Market, Competition, Key customer markets, Marketplaces,
Market spaces, Meta-markets.
1.3 Company Orientation towards Market Place: Product, Production, Sales,
Marketing, Societal, Transactional, Relational, Holistic Marketing Orientation. Selling
versus Marketing. Concept of Marketing Myopia.
1.4 Introduction to the Concept of Marketing Mix: Origin and Concept of Marketing
Mix and Definitions of 7Ps, People, Processes and Physical Evidence.
1.5 New Marketing Realities: Major Societal Forces, New Consumer Capabilities and
New Company Capabilities.
Unit – 2 Consumer Behavior: Hours:
2.1 Meaning and importance of consumer behavior, Comparison between Organizational 6+2
Buying behavior and consumer buying behavior, Buying roles, Five steps buyer
2.2 Decision process.
Unit – 3 Marketing Environment: Hours:
3.1 Concept of Environment: Macro and Micro, Need for analyzing the Marketing 6+2
Environment.
3.2 Macro Environment: Analyzing the Economic, Socio-cultural, Demographic,
Political – Legal – Regulatory, Technical, Environmental environments.
3.3 Linkage of Marketing Function with all functions in the organization.
3.4 Concept of Market Potential and Market Share.
Unit – 4 Segmentation, Target Marketing and Positioning: Hours:
4.1 Marketing as Value Delivery Process: Traditional and modern approaches. 8+2
4.2 Segmentation: Definition, Need for segmentation, Benefits of segmentation to
marketers, Bases for market segmentation of consumer goods and industrial goods,
Criteria for effective segmentation.
4.3 Levels of Market Segmentation: Segment Marketing, Niche Marketing, Local
Marketing, Mass Marketing.
4.4 Target Market: Concept of Target Market and criteria for selection of target
market.
4.5 Positioning: Concept of Differentiation and Positioning, Introduction to the concepts
of Value Proposition and USP.
Unit – 5 Product – The First Element of Marketing Mix: Hours:
5.1 Product: Meaning of product, Goods and Services Continuum, Classification of 5+2
consumer products – Convenience, Shopping, Specialty, Unsought, classification of
industrial products – material and parts, capital items, supplies and services.
5.2 Product Levels: The customer value hierarchy.
5.3 Product Mix: Width, Depth, Consistency and Product line.
Contents
Course Code Course Name Page Nos.
101 Accounting for Business Decisions 1 – 27
102 Economic Analysis for Business Decisions 28 – 56
103 Legal Aspects of Business 57 – 86
104 Business Research Methods (BRM) 87 – 113
105 Organizational Behaviour 114 – 140
106 Basics of Marketing (BOM) 141 – 170

Accounting for Business Decisions
Chapter 1
Basic Concepts of Accounting
1. ______________ is nothing but the right process of selecting an appropriate, logical, practical
and achievable option from the available alternatives.
(a) Business Decision (b) Planning
(c) Organizing (d) Strategy
2. ______________ is a person who carried on business exclusively by and for himself.
(a) Partner (b) Sole-trader
(c) Executive (d) Manager
3. The relationship between persons who agree to carry on business in a common with a view to
private gain.
(a) Partnership Firm (b) Sole-trading Firm
(c) Joint Stock Company (d) Co-operative Society
4. A ______________ is a form of business organization in which the funds of large number of
investors are managed by a few persons for the purpose of earning profits.
(a) Partnership Firm (b) Sole-trading Firm
(c) Joint Stock Company (d) Co-operative Society
5. ______________ is the language of business.
(a) Marketing (b) Profit Earning Capacity
(c) Accounting (d) Selling
6. The object/s of accounting ______________.
(a) To calculate net profit or net loss of the business.
(b) To know the financial condition of the firm.
(c) To provide information to the management for important managerial decisions.
(d) All of the above
7. Out of the following, which is not the branch of Accounting.
(a) Financial Accounting (b) Management Accounting
(c) Human Resource Accounting (d) Cost Accounting
8. Accounting ______________ are the Rules of Action or the Methods and Procedures of
Accounting commonly adopted while recording Business transactions.
(a) Principles (b) Concepts
(c) Conventions (d) Systems
2 All in One Multiple Choice Questions
9. According to ______________ concept, assets purchased are generally recorded in

accounting books at the cost at which they are purchase(d)
(a) Business Entity Concept (b) Going Concern Concept
(c) Money Measurement Concept (d) Cost Concept
10. According to ______________ concept, revenue is recognized only when the sale is
performed.
(a) Business Entity Concept (b) Going Concern Concept
(c) Money Measurement Concept (d) Realization Concept
11. Accounting ______________ are the traditions, usage and customs which are in used since long.
(a) Principles (b) Concepts
(c) Conventions (d) Systems
12. Out of the following, which is not the convention of Accounting.
(a) Convention of Consistency (b) Convention of Disclosure
(c) Convention of Conservatism (d) Convention of Realization
13. Out of the following, which is not the System of Accounting.
(a) Non-Cash Entry System (b) Cash System
(c) Single Entry System (d) Double Entry System
14. Out of the following, which Transactions are not to be recorded in the Books of Accounts
(a) Cash Transaction (b) Credit Transaction
(c) Financial Transaction (d) Ordinary Transaction
15. Accounts in the names of persons are known as ______________.
(a) Personal Account (b) Real Account
(c) Nominal Account (d) Individual Account
16. Accounts in the names of assets are known as ______________.
17. Accounts in the respect of expenses and incomes are known as ______________.
18. Every transaction must have ______________ aspects and involve ______________ accounts.
(a) two, two (b) one, one
(c) one, two (d) two, one
19. A ______________ is an accounting entry that either increases an asset or expense account,
or decreases a liability or equity account.
(a) Debit (b) Credit
(c) Sales (d) Purchase
20. A ______________ is an accounting entry that either increases a liability or equity account,
or decreases an asset or expense account.
(c) Sales (d) Purchase
All in One Multiple Choice Questions 3
21. Debit the receiver, credit the giver is the rule of ______________.
22. Debit what comes in, credit what goes out is the rule of ______________.
23. Debit all expenses and losses, credit all incomes and gains is the rule of ______________.
24. ______________ is a record of transaction in the books of Accounts.
(a) Entry (b) Recording
(c) Monetary Transaction (d) Ledger
25. ______________ is an exchange of money or money’s worth.
(a) Entry (b) Recording
(c) Transaction (d) Ledger
26. ______________ is a book of original entry.
(a) Journal (b) Ledger
(c) Cash Book (d) Subsidiary Book
27. ______________ is a bound book of different accounts.
(c) Cash Book (d) Subsidiary Book
28. ______________ is a summarized record of transactions related to one person, one asset, one
head of expense/loss and one head of income/gain.
(c) Cash Book (d) Account
29. ______________ means totaling of sums in the books of accounts.
(a) Casting (b) Summarizing
(c) Journalizing (d) Ledger Posting
30. ______________ are obligations or debts that the enterprise must pay in money or services at
some time in the future.
(a) Assets (b) Liabilities
(c) Responsibilities (d) Salaries
31. ______________ are economic resources of an enterprise that can be usefully expressed in
monetary terms.
(a) Assets (b) Liabilities
(c) Cash & Bank Balance (d) Funds
32. ______________ are commodities, purchased or manufactured for resale with a view to earn
profit.
(a) Assets (b) Goods
(c) Investments (d) Resources
33. ______________ are the amounts the business earns by selling its products or providing
services to customers.
(a) Assets (b) Goods
(c) Investments (d) Revenues
34. ______________ are the costs incurred by a business in the process of earning revenue.
(a) Assets (b) Expenses
(c) Investments (d) Revenues
35. ______________ are persons and/or other entities who owe to an enterprise an amount for
receiving goods and services on credit.
(a) Debtors (b) Creditors
(c) Shareholders (d) Suppliers
36. ______________ are persons and/or other entities that have to be paid by an enterprise an
amount for providing the enterprise goods and services on credit.
(a) Debtors (b) Creditors
(c) Shareholders (d) Customers
37. ______________ is a list of the entire general ledger account names and balances; it is
prepared to prove the ledger.
(c) Cash Book (d) Trial Balance
38. The difference of two sides of an account is called as ______________.
(c) Balance (d) Cash
39. ______________ deals with expenses related to or identified with products, which may only
be a part of the organization.
40. In ______________ stocks are valued at lower of cost or market value.
41. The primary objective of ______________ is to provide necessary information to the
management in the process of its planning, controlling, and performance evaluation, and
decision-making.
42. The Success of ______________ does not depend upon Management Accounting system.
43. In______________ no statutory requirement of audit for reports.
44. Which is the most popular and acceptable software?

(a) Tally (b) Marg
(c) Saral (d) SAP
45. The Advantage/s of Accounting Software ______________.
(a) Accounting softwares save Time and Money.
(b) No scope for mistakes and errors.
(c) Provides accurate and updated information as and when require(d)
46. Internal and external parties are the users of ______________.
47. Capital A/c generally shows ______________ balance.
(a) Cash (b) Debit
(c) Credit (d) Overdraft
48. Asset A/c shows ______________ balance.
(a) Cash (b) Debit
(c) Credit (d) Overdraft
49. There are ______________ columns in Journal.
(a) Two (b) Three
(c) Four (d) Five
50. Explanatory note written below an entry recorded in the Journal is called as ______________.
(a) Narration (b) Explanation
(c) Brief information (d) Detail information
Answer Key of Chapter 1
1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

2. (b) 12. (d) 22. (b) 32. (b) 42. (d)
3. (a) 13. (a) 23. (c) 33. (d) 43. (b)
4. (c) 14. (d) 24. (a) 34. (b) 44. (a)
5. (c) 15. (a) 25. (c) 35. (a) 45. (d)
6. (d) 16. (b) 26. (a) 36. (b) 46. (a)
7. (c) 17. (c) 27. (b) 37. (d) 47. (c)
8. (a) 18. (a) 28. (d) 38. (c) 48. (b)
9. (d) 19. (a) 29. (a) 39. (d) 49. (d)
10. (d) 20. (b) 30. (b) 40. (a) 50. (a)
Chapter 2
Understanding of Financial Statements
1. ______________ shows the firm’s assets, liabilities, and stockholders’ equity as of the report
date.
(a) Cash Flow (b) Funds Flow
(c) Income Statement (d) Balance Sheet
2. ______________ shows the results of the firm’s operations and financial activities for the
reporting period.
(a) Trading and Profit & Loss Account (b) Expense Statement
(c) Income Statement (d) Balance Sheet
3. ______________ includes explanations of various activities, additional details of some
accounts, and other items as mandated by the regulatory authorities, bodies from time to time.
(a) Trading and Profit & Loss Account (b) Expense Statement
(c) Income Statement (d) Supplementary Note
4. ______________ is a formal official record of the financial activities and position of a
business, person, or other entity.
(a) Financial Statement (b) Trading Account
(c) Profit & Loss Account (d) Supplementary Note
5. ______________ provides the vital information related to the profitability, liquidity and
solvency of the business.
(a) Financial Statement (b) Trading Account
(c) Profit & Loss Account (d) Cash Flow & Funds Flow
6. ______________ is the simplest business form under which one can operate a business.
(a) Partnership Firm (b) Sole Trading Firm
(c) Private Ltd. Company (d) Public Company
7. ______________ is not a separate legal entity.
(a) Partnership Firm (b) Sole Proprietorship Firm
(c) Private Ltd. Company (d) One Man Company
8. For every item given in Trial Balance, ______________ effect should be given.
(a) Dual (b) Single
(c) Triple (d) None of the above
9. For every item given in Adjustment, ______________ effect should be given.
(a) Dual (b) Single
(c) Triple (d) None of the above
10. ______________ are nothing but the entries which are not included in the original Trial
Balance.
(a) Journal Proper (b) Ledger
(c) Adjustments (d) None of the above
11. Every adjustment has two effects, i.e., ______________.

(a) One Debit & One Credit (b) Debit
(c) Credit (d) None of the above
12. Depreciation is debited to ______________.
(a) BRS (b) Balance Sheet
(c) Trading A/c (d) Profit and Loss A/c
13. Income Accrued but Not Received is recorded to ______________.
(a) Profit and Loss A/c Debit Side (b) Profit and Loss A/c Credit Side
(c) Trading A/c Debit Side (d) Trading A/c Credit Side
14. Prepaid Expenses shown at ______________.
(a) Balance Sheet Asset Side (b) Profit and Loss A/c Credit Side
15. Closing Stock is recorded to ______________.
16. Outstanding Expenses shown at ______________.
(a) Balance Sheet Liability Side (b) Profit and Loss A/c Credit Side
(c) Balance Sheet Asset Side (d) Trading A/c Credit Side
17. Goods Withdrawn from business is considered as ______________.
(a) Sales (b) Purchases
(c) Capital (d) Drawings
18. Interest on Capital is debited to ______________.
(a) Capital A/c (b) Balance Sheet
19. Interest on Drawings is credited to ______________.
(a) Journal A/c (b) Balance Sheet
20. Goods Distributed as Free Samples is debited to______________.
(a) Capital A/c (b) Personal A/c
21. Reserve for Discount on Creditors is credited to ______________.
22. ______________ information is ignored in the financial statements.
(a) Cash (b) Credit
(c) Qualitative (d) Quantitative
23. The financial statements are based on the accounting ______________.
(a) Accounting Concepts and Conventions
(b) Accounting Concepts
(c) Accounting Conventions

(d) None of the above
24. Accounting year starts from ______________.
(a) 1st January (b) 1st April
(c) 1st March (d) 1st June
25. Accounting year ends on ______________.
(a) 31st January (b) 31st August
(c) 31st March (d) 31st December
26. Returns outwards are deducted from ______________.
(c) Stock (d) Closing stock
27. Returns inwards are deducted from ______________.
(c) Stock (d) Closing stock
28. Carriage inward is debited to ______________.
29. Carriage outward is debited to ______________.
30. Goodwill is recorded to ______________.
(a) Capital A/c (b) Balance Sheet Asset Side
31. Depreciation is ______________ in/from asset.
(a) Added (b) Deducted
(c) Not Added (d) Not deducted
32. In ______________ business, all incomes and losses are taxed on the individual’s personal
income tax return.
(a) Sole Proprietorship (b) Partnership
(c) Cooperative (d) Departmental
33. Freight is recorded to ______________.
34. Outstanding Expenses are always ______________.
(a) Added in respective asset (b) Added in respective liability
(c) Added in respective expense (d) Added in respective income
35. Prepaid Expenses are always ______________.
(a) Deducted from respective asset (b) Added in respective liability
(c) Deducted from respective expense (d) Added in respective income
36. Gross Profit is transferred to ______________.

(a) Capital A/c (b) Balance Sheet
37. Goods Withdrawn for Personal Use by Proprietor is treated as ______________.
(a) Income (b) Expense
(c) Liability (d) Asset
38. Royalty is recorded to ______________.
39. Purchase Return is also called as ______________.
(a) Inward (b) Outward
(c) Return Inward (d) Return Outward
40. Sales Return is also called as ______________.
(a) Inward (b) Outward
(c) Return Inward (d) Return Outward
41. RDD is deducted from______________.
(c) Creditors (d) Debtors
42. ______________ is a non cash expense.
(a) Depreciation (b) Discount
(c) Purchases (d) Creditors
43. Income Received in Advance is considered as ______________.
(a) Income (b) Expense
(c) Asset (d) Liability
44. An insurance charge of goods is recorded to ______________.
45. Wages and Salaries item is recorded to ______________.
46. Patents item is recorded at ______________.
(c) Balance Sheet Liability Side (d) Balance Sheet Asset Side
47. ______________ is not a current asset.
(a) Stock (b) Investment
(c) Cash (d) Goodwill
48. ______________ is not a fixed asset.
(a) Land (b) Building
(c) Machinery (d) Debtors
49. ______________ is not a current liability.

(a) Capital (b) Loan
(c) Bills Payable (d) Creditors
50. Net Profit is added in ______________.
(a) Trading A/c (b) Income A/c
(c) Capital A/c (d) Asset A/c
1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

2. (a) 12. (d) 22. (c) 32. (a) 42. (a)
3. (d) 13. (b) 23. (a) 33. (c) 43. (d)
4. (a) 14. (a) 24. (b) 34. (c) 44. (a)
5. (a) 15. (d) 25. (c) 35. (c) 45. (c)
6. (b) 16. (a) 26. (b) 36. (d) 46. (d)
7. (b) 17. (d) 27. (a) 37. (b) 47. (d)
8. (b) 18. (d) 28. (c) 38. (c) 48. (d)
9. (a) 19. (d) 29. (d) 39. (d) 49. (a)
10. (c) 20. (d) 30. (b) 40. (c) 50. (c)
Chapter 3
Cost Accounting
1. ______________ provides a specialized technique, which provides prompt and accurate
information regarding the cost of producing and selling an article.
(a) Cost Accounting (b) Financial Accounting
(c) Management Accounting (d) Cost & Financial Accounting
2. The amount of expenditure incurred on, or attributable to a given thing is called as
______________.
(a) Cost (b) Price
(c) Expense (d) Fixed Cost
3. The techniques and process of ascertaining cost is called as ______________.
(a) Costing (b) Accounting
(c) Financing (d) Management Accounting
4. With the help of ______________, we can control the cost.
(a) Costing Methods (b) Cost Accounting
(c) Management Accounting (d) Costing Techniques
5. With the help of ______________, we can find out the cost.
(a) Costing Methods (b) Cost Accounting
(c) Management Accounting (d) Costing Techniques
6. The total of Direct Material + Direct Labour + Direct Expenses is called as ______________.
(a) Total Cost (b) Factory Cost
(c) Prime Cost (d) Main Cost
7. Direct Expenses are also called as ______________.
(a) Chargeable Expenses (b) Factory Expenses
(c) Works Expenses (d) General Expenses
8. Depreciation is an example of ______________.
(a) Direct Expenses (b) Factory Expenses
(c) General Expenses (d) Indirect Expenses
9. The aggregate of all indirect expenses is ______________.
(a) Total Cost (b) Total Expense
(c) Overheads (d) Factory Overheads
10. Factory Cost is also called as ______________.
(a) Total Cost (b) Cost of Production
(c) Works Cost (d) Factory Overheads
11. Cost of Sales is also called as ______________.
(a) Total Cost (b) Cost of Production
(c) Works Cost (d) Factory Cost
12. Telephone bill, Electricity bill is an example of ______________.

(a) Total Cost (b) Fixed Overheads
(c) Variable Overheads (d) Semi-variable Overheads
13. Fixed Cost is also called as ______________.
(a) Total Cost (b) Direct Cost
(c) Works Cost (d) Period Cost
14. Material and Labour is an example of ______________.
(a) Fixed Cost (b) Controllable Cost
(c) Non-controllable Cost (d) Period Cost
15. Repairs and Maintenance is an example of ______________.
(a) Fixed Cost (b) Avoidable Cost
(c) Non-controllable Cost (d) Normal Cost
16. Cost incurred because of lock outs is an example of ______________.
(a) Fixed Cost (b) Unavoidable Cost
(c) Abnormal Cost (d) Normal Cost
17. One-time set-up cost of a plant or project is called as ______________.
(a) Fixed Cost (b) Direct Cost
(c) Capital Cost (d) Normal Cost
18. Standard Cost is also called as ______________.
(a) Predetermined Cost (b) Direct Cost
(c) Capital Cost (d) Fixed Cost
19. Variable Cost is also called as ______________.
(c) Marginal Cost (d) Fixed Cost
20. Rent is an example of ______________.
(c) Unavoidable Cost (d) Standard Cost
21. ______________ is the difference between the costs of two alternatives.
(a) Differential Cost (b) Semi-variable Cost
(c) Variable Cost (d) Standard Cost
22. Cost incurred as per policy of top management is called as ______________.
(a) Differential Cost (b) Programmed Cost
(c) Normal Cost (d) Fixed Cost
23. Notional cost is nothing but ______________.
(a) Standard Cost (b) Programmed Cost
(c) Normal Cost (d) Imaginary Cost
24. Depreciation on Plant and Rent is an example ______________.
(a) Committed Cost (b) Programmed Cost
(c) General Cost (d) Imaginary Cost
25. A Location, person, or item of equipment (or a group of these) for which costs may be
ascertained and used for the purpose of control is called as ______________.
(a) Cost Unit (b) Cost Centre
(c) Cost Department (d) Cost Division
26. ______________ a statement, which shows various components of total cost of a product.
(a) Cost Sheet (b) Cost Account
(c) Cost Report (d) Cost Classification
27. ______________ is prepared on the basis of actual cost incurred.
(a) Historical Cost Sheet (b) Cost Account
(c) Cost Report (d) Estimated Cost Sheet
28. Haulage Charges is an example of ______________.
(a) Fixed Overheads (b) Direct Cost
(c) Factory Overheads (d) Administration Overheads
29. Counting House Salaries is an example of ______________.
(a) Fixed Overheads (b) Selling Overheads
30. Carriage Outward is an example of ______________.
(a) Fixed Overheads (b) Selling Overheads
31. Opening Stock of Finished Goods is added in ______________.
(a) Factory Cost (b) Prime Cost
(c) Cost of Production (d) Works Cost
32. Direct Labour Charges is also called as ______________.
(c) Fixed Wages (d) Productive Wages
33. Cost unit is divided into ______________.
(a) Units of Production (b) Units of Services
(c) Both a and b (d) None of the above
34. Cost of converting raw material into finished goods is also called as ______________.
(c) Conversion Cost (d) Productive Cost
35. According to Elements, Cost is divided into ______________ categories.
(a) One (b) Two
(c) Three (d) Four
36. ______________ means the amount spent to sell a company’s products.
(a) Revenue Cost (b) Differential Cost
(c) Fixed Cost (d) Variable Cost
37. Insurance is an example of ______________.

38. ______________ cost directly varies with volume of output.
39. The Expenditure which has been incurred in an accounting period but it is applicable further
periods also is ______________.
(c) Differed Revenue Cost (d) Variable Cost
40. The estimate of expenditure for different business operations for a specific period is
______________.
(a) Budgeted Cost (b) Differential Cost
(c) Differed Revenue Cost (d) Variable Cost
41. An up-gradation of Machine, Change in Service/Distribution Channel are the examples of
______________.
(a) Incremental Cost (b) Differential Cost
(c) Opportunity Cost (d) Future Cost
42. The value of benefit sacrificed in favour of an alternative course of action is ______________
cost.
(a) Incremental (b) Fixed
(c) Opportunity (d) Future
43. Opening Stock of WIP & Closing Stock of WIP is added and deducted after addition of
______________ in Prime Cost.
(a) Direct Expenses (b) Factory Overheads
(c) Office Overheads (d) Selling Overheads
44. Carriage Inward is added while calculating ______________.
(a) Cost of Direct Expenses (b) Cost of Direct Overheads
(c) Cost of Direct Labour (d) Cost of Direct Material
45. Profit Margin is added in ______________.
(a) Cost of Sales (b) Fixed Cost
(c) Cost of Production (d) Cost of Goods Sold
46. Abnormal Wastage of Material is added in ______________.
(a) Cost of Sales (b) Cost of Production
(c) Cost of Goods Sold (d) None of the above
47. Discount allowed is an example of ______________.
48. Sale of Scrap is ______________ after addition of factory overheads in Prime Cost.
(a) Added (b) Deducted
(c) Not Considered (d) None of the above
49. Cleaning Charges is an example of ______________.
50. ______________ is the process of ascertaining costs whereas ______________ is the process
of recording various costs in a systematic manner, in order to prepare statistical date to
ascertain cost.
(a) Costing, Cost Accounting (b) Cost Accounting, Costing
(c) Costing and Allocation Cost (d) Costing and Absorption of Cost
1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

2. (a) 12. (d) 22. (b) 32. (d) 42. (c)
3. (a) 13. (d) 23. (d) 33. (c) 43. (b)
4. (d) 14. (b) 24. (a) 34. (c) 44. (d)
5. (a) 15. (d) 25. (b) 35. (c) 45. (a)
6. (c) 16. (c) 26. (a) 36. (a) 46. (d)
7. (a) 17. (c) 27. (a) 37. (c) 47. (d)
8. (d) 18. (a) 28. (c) 38. (d) 48. (b)
9. (c) 19. (c) 29. (d) 39. (c) 49. (b)
10. (c) 20. (c) 30. (b) 40. (a) 50. (a)
Chapter 4
Cost Control
1. Cost of storing the goods as well as the interest on the capital is called as ______________.
(a) Inventory Carrying Cost (b) Order Placing Cost
(c) Buying Cost (d) Fixed Cost
2. Cost of placing the orders and receiving the goods are called as ______________.
(a) Inventory Carrying Cost (b) Variable Cost
(c) Buying Cost (d) Fixed Cost
3. The main objective of EOQ is to ______________ the total costs.
(a) Minimize (b) Control
(c) Maintain (d) Avoid
4. ______________ analysis is based on Selective Inventory Management.
(a) EOQ (b) JIT
(c) ABC (d) HML
5. Calculate EOQ if Cost of material per unit ` 40, Annual requirement 1600 units, Cost of
placing and receiving one purchase order ` 50, Annual carrying cost of inventory is 10% of
inventory value.
(a) 200 Units (b) 175 Units
(c) 225 Units (d) 250 Units
6. A level of inventory that should never be exceeded is ______________.
(a) Maximum Stock Level (b) Minimum Level
(c) Re-order Stock Level (d) Danger Stock Level
7. A level below which stock should not be allowed to fall is ______________.
8. A level at which store keeper should intimate purchase department for fresh/new supply is
______________.
9. A level below which the stock should never be allowed to fall under emergency
circumstances is ______________.
10. A strategy for inventory management in which raw materials and components are delivered
from the vendor or supplier immediately before they are needed in the manufacturing process
is ______________.
(a) Scientific Purchasing (b) Immediate Buying
(c) JIT (d) None of the above
11. Out of the following, which is the method of issuing material.

(a) LIFO (b) FIFO
(c) Simple Average (d) All of the above
12. Full Form of LIFO is ______________.
(a) Latest in First Out (b) Last in First Out
(c) Largest in First Out (d) Lowest in First Out
13. The formula of Re-order Stock Level is ______________.
(a) Maximum Consumption × Maximum Reorder Period
(b) Reorder Level − (Normal Consumption × Normal Reorder Period)
(c) Reorder Level + Reorder Quantity − (Minimum Consumption × Minimum Reorder
Period)
(d) Average Usage × Maximum Reorder Period for Emergency Purchases
14. The formula of Minimum Stock Level is ______________.
(a) Maximum Consumption× Maximum Reorder Period
Period)
15. The formula of Maximum Stock Level is ______________.
Period)
16. The formula of Danger Stock Level is ______________.
Period)
17. Material Losses are generally classified into two categories, i.e., ______________.
(a) Normal and Abnormal
(b) Avoidable and Unavoidable
(c) Controllable and Non-controllable
(d) Fixed and Variable
18. ______________ is the example of Material Losses.
(a) Wastage (b) Scarp
(c) Spoilage or Defectives (d) All of the above
19. Material Control includes ______________.

(a) Fixed Cost Control (b) Debtors Control
(c) Inventory Control (d) Creditors Control
20. The main objective/s of store-keeping is/are ______________ .
(a) To protect materials from losses and damages
(b) To avoid over and under-stocking of materials
(c) To minimize the storage costs of materials
21. Wages which can be indentified with and allocated to cost centers and cost units is
______________.
(a) Direct Labour Cost (b) Indirect Labour Cost
(c) Fixed Labour Cost (d) Variable Labour Cost
22. ______________ is defined as the rate of change of labour force in an organization during a
specified period.
(a) Labour Turnover (b) Labour Rate
(c) Labour Cost (d) Employee Change Rate
23. Labour Turnover Causes are classified into ______________.
(a) Personal Causes (b) Avoidable Causes
(c) Unavoidable Causes (d) All of the above
24. ______________ includes all those costs which are incurred to keep the workers satisfied, so
that they are prevented from leaving the organization.
(a) Direct Labour Cost (b) Preventive Cost
(c) Maintenance Cost (d) Variable Labour Cost
25. Labour Turnover Rate is calculated as per ______________.
(a) Separation Method (b) Replacement Method
(c) Flux Method (d) All of the above
26. ______________ is recording of incoming and outgoing time of all employees in factory.
(a) Time Keeping (b) Time Booking
(c) Time Noting (d) All of the above
27. ______________ is recording of the time of employees spent on various job.
(a) Time Keeping (b) Time Booking
(c) Time Noting (d) All of the above
28. ______________ study is concerned with determining the proper method for performing the
job so that there is no wastage in movement.
(a) Time (b) Motion
(c) General (d) Special
29. ______________ study is concerned with the determination of standard time required by a
person of average ability to perform a jo(b)
(a) Time (b) Motion
(c) General (d) Special
30. Out of the following, which factor/s affecting the Labour Cost.
(a) Assessment of Manpower Requirement
(b) Time and Motion Study
(c) Control over Idle Time and Overtime
31. Which department/s is/are closely associated with the Control of Labour Cost?
(a) Personnel and Payroll Department
(b) Time Keeping Department
(c) Engineering and Work Study Department
32. ______________ arises from replacement of workers who leave the organization.
(a) Direct Labour Cost (b) Preventive Cost
(c) Maintenance Cost (d) Replacement Cost
33. Method/s of Time Keeping is/are ______________.
(a) Attendance Register Method
(b) Token or Disc Method
(c) Time Recording Clocks & Dial Time Records
34. Method/s of Time Booking is/are ______________.
(a) Daily Time Sheet (b) Weekly Time Sheet
(c) Job Cards or Job Tickets (d) All of the above
35. ______________ refers to the estimation of standard time, i.e., the time allowed for
completing one piece of job using the given metho(d)
(a) Work Measurement (b) Time Measurement
(c) Period Measurement (d) None of the above
36. ______________ costs are the operating costs of a business enterprise which cannot be traced
to a particular unit of output.
(a) Material (b) Labour
(c) Overhead (d) Foxed & Variable
37. The ______________ is the process of recording each item of cost in the books of accounts
maintained for the purpose of ascertainment of cost of each Cost Centre or Cost Unit.
(a) Collection of Overhead (b) Allocation of Overhead
(c) Apportionment of Overhead (d) Classification of Overhead
38. ______________ means, the allotment of whole items of cost to cost centres or cost units.
39. ______________ means, the allotment to two or more departments or cost centers of
proportions of common items of cost on estimated basis of benefit received.
40. The process of apportionment is also known as ______________ of overhead.

(a) Departmentalization (b) Centralization
(c) Decentralization (d) Classification
41. Methods for Allocation & Apportionment of Overhead/s is/are ______________.
(a) Primary Distribution of Overhead
(b) Secondary Distribution of Overhead
(c) Simultaneous Equation Method of Overhead
42. The overhead, which can be easily identified with a particular department that is charged only
to the specific department, is called ______________.
(a) Collection (b) Allocation
(c) Apportionment (d) Classification
43. Insurance of Plant is distributed on the basis ______________.
(a) Value of Plant (b) Ratio of Plant
(c) Quantity of Production (d) None of the above
44. Recreation Expenses is distributed on the basis ______________.
(a) No. of Workers (b) Days Spend by Workers
(c) Time Spent by Workers (d) None of the above
45. Electric Power is distributed on the basis ______________.
(a) Horse Power (b) KWH
(c) No. of Machine Hours (d) All of the above
46. Materials Handling Charges is distributed on the basis ______________.
(a) Value of Materials (b) No. of Stores Requisitions
(c) Weight or Value of Materials (d) All of the above
47. Allocation of Overheads is ______________ process of allotment of overheads.
(a) direct (b) indirect
(c) fixed (d) variable
48. Apportionment of Overheads is ______________ process of allotment of overheads.
(a) direct (b) indirect
(c) fixed (d) variable
49. ______________ deals with the whole items of cost.
50. ______________ deals with only proportion of items of cost.
1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

2. (b) 12. (b) 22. (a) 32. (d) 42. (b)
3. (a) 13. (a) 23. (d) 33. (d) 43. (a)
4. (c) 14. (b) 24. (b) 34. (d) 44. (a)
5. (a) 15. (c) 25. (d) 35. (a) 45. (d)
6. (a) 16. (d) 26. (a) 36. (a) 46. (d)
7. (b) 17. (a) 27. (b) 37. (a) 47. (a)
8. (c) 18. (d) 28. (b) 38. (b) 48. (b)
9. (d) 19. (c) 29. (a) 39. (c) 49. (b)
10. (c) 20. (d) 30. (d) 40. (a) 50. (c)
Chapter 5
Decision-making Tools
1. Marginal Costing is also called as ______________.
(a) Variable Costing (b) Standard Costing
(c) Material Costing (d) Job Costing
2. In ______________ total costs cannot be easily segregated into fixed costs and variable costs.
(a) Marginal Costing (b) Standard Costing
(c) Material Costing (d) Job Costing
3. P/V Ratio is mainly known as ______________.
(a) Contribution to Sales Ratio (b) Contribution Margin Ratio
(c) Variable Profit Ratio (d) All of the above
4. ______________ analysis classifies all costs as either fixed or variable.
(a) CVP (b) ABC
(c) JIT (d) HML
5. ______________ that point where no profit or no loss position is observed.
(a) Centre Point (b) BEP
(c) Starting Point (d) Ending Point
6. ______________ is the difference between sales revenue and variable cost.
(a) P/V Ratio (b) BEP
(c) MOS (d) Contribution
7. Contribution is also called as ______________.
(a) P/V Ratio (b) Net Margin
(c) MOS (d) Gross Margin
8. ______________ is the difference between actual sales or output and the break even sales.
(a) P/V Ratio (b) Net Margin
(c) MOS (d) Gross Margin
9. ______________ is an angle where sales line intersects total cost line which indicates profit
earning capacity over the BEP.
(a) Angle of Incidence (b) Contribution
(c) Margin of Safety (d) Gross Margin
10. If contribution is ` 3,00,000 and Sales is ` 10,00,000, then what is P/V Ratio?
(a) 20% (b) 30%
(c) 33.33% (d) 1/3
11. If P/V Ratio is 25%, then what is the % of Variable Cost?
(a) 70% (b) 80%
(c) ¾ (d) ½
12. If Fixed Cost is ` 2,50,000 and P/V Ratio is 60%, then what is BEP in `?
(a) ` 4,16,667 (b) ` 3,83,333
(c) ` 3,75,000 (d) ` 4,10,000
13. If Fixed Cost is ` 2,50,000 and Profit is ` 3,50,000, then what is the amount of Contribution?
(a) ` 1,00,000 (b) ` 6,00,000
(c) ` 3,75,000 (d) ` 4,10,000
14. If Sales are ` 50,000 and P/V Ratio is 20%, then what is the amount of Variable Cost?
(a) ` 40,000 (b) ` 10,000
(c) ` 25,000 (d) ` 30,000
15. If contribution is ` 3,00,000 and Profit is ` 1,00,000, then what is the amount of Fixed Cost?
(a) ` 4,00,000 (b) `2,00,000
(c) ` 2,50,000 (d) `3,00,000
16. If Sales are ` 3,00,000 and P/V ratio is 20%, then what is the amount of Variable Cost?
(a) ` 2,40,000 (b) ` 80,000
(c) ` 2,70,000 (d) ` 2,00,000
17. The correct formula of Contribution is ______________.
(a) Contribution = Sales – Variable Cost
(b) Contribution = Fixed Cost + Profit or – Loss
(c) Contribution = Sales × P/ V Ratio
18. The correct formula of P/V Ratio is ____________.
(a) P/ V Ratio = [Contribution/Sales ] × 100
(b) P/ V Ratio = [Change in Profit/Change in Sales ] × 100
(c) P/ V Ratio = [Sales−Variable Cost/Sales] × 100
19. Marginal Costing is a Costing ______________.
(a) Technique (b) Method
(c) System (d) Convention
20. Under absorption and over absorption of overheads problems are not arisen under
______________.
(a) Marginal Costing (b) Standard Costing
(c) Job Costing (d) Budgetary Control
21. Standard cost is the ______________ cost.
(a) Pre-determined (b) Pre-decided
(c) Pre-planned (d) None of the above
22. Small organizations cannot adopt ______________ technique.
(a) Standard Costing (b) Marginal Costing
(c) Budgetary Control (d) None of the above
23. ______________ means difference between standard cost and actual cost.
(a) Balance Cost (b) Variance
(c) Marginal Cost (d) Variable Cost
24. ______________ helps management to understand the present costs and then to control the
future costs.
(a) ABC Analysis (b) Variance Analysis
(c) Marginal Analysis (d) Budget Analysis
25. Variances are classified in ______________ categories.
(a) One (b) Two
(c) Three (d) Four
26. If Standard Cost ` 80 and Actual Cost ` 70, then what is the amount of Material Cost
Variance?
(a) 10 (b) –10
(c) 150 (d) 20
27. If Standard Price ` 8 & Standard Qty.10, Actual Price ` 7 & Actual Qty.10, then what is the
amount of Material Price Variance?
(a) 10 (b) –10
(c) 150 (d) 20
28. If Standard Price ` 8 & Standard Qty.10, Actual Price ` 7 & Actual Qty.10, then what is the
amount of Material Usage Variance?
(a) 10 (b) –10
(c) 50 (d) 0
29. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate ` 2 & Actual Hours 1500, then
what is the amount of Labour Cost Variance?
(a) 600 (b) –600
(c) 500 (d) 400
30. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate ` 2 & Actual Hours 1500, then
what is the amount of Labour Rate Variance?
(a) 750 (b) –750
(c) 600 (d) 400
31. If Standard Rate ` 1.50 & Standard Hours 1600, Actual Rate `2 & Actual Hours 1500, then
what is the amount of Labour Efficiency Variance?
(a) 150 (b) –150
(c) 300 (d) 200
32. The correct formula for verification of Material Cost Variance is ______________.
(a) MCV = MPV + MUV (b) MCV = MPV – MUV
(c) MCV = MPV × MUV (d) None of the above
33. The correct formula for verification of Labour Cost Variance is ______________.
(a) LCV = LRV + LEV (b) LCV = LRV – LEV
(c) LCV = LRV × LEV (d) None of the above
34. In Standard Costing comparison between ______________ is carried out.
(a) Standard Cost and Actual Cost (b) Fixed Cost and Variable Cost
(c) Normal Cost and Abnormal Cost (d) None of the above
35. The Disadvantages of Standard Costing is/are ______________.
(a) Establishments of standards are difficult in practice.
(b) Standards are requires to revise continuously.
(c) Inaccurate, unreliable and outdated standards do more harm than benefit
36. ______________ is a concrete precise picture of the total operation of an enterprise in
monetary terms.
(a) Budget (b) Plan
(c) Strategy (d) Goal
37. Accuracy cannot be maintained is a limitation of ______________.
(a) Budgetary Control (b) Scientific Planning
(c) Standard Costing (d) Marginal Costing
38. Pre- requisitions for effective implementation of Budgetary Control system is/are
______________.
(a) Deciding budget centres & budget period
(b) Preparation of a budget manual
(c) Determination of budget key factor
39. ______________ is the budget in which adjustment is possible according to change in
business conditions.
(a) Flexible Budget (b) Fixed Budget
(c) Sales Budget (d) Cash Budget
40. When forecasts about budget shows greater revenue to be received or generated than the
expenses to be incurred during budgeted period that is known as ______________.
(a) Surplus Budget (b) Best Budget
(c) Favourable Budget (d) Non-favourable Budget
41. ______________ budget highlights that the expenditures to be incurred in budget period will
be greater than the revenues to be received during the same period.
(a) Surplus Budget (b) Deficit Budget
(c) Favourable Budget (d) Non-favourable Budget
42. The establishment of budgets relating the responsibilities of executives to the requirements of
a policy and the continuous comparison of actual with budgeted results, either to secure by
individual action the objective of that policy or to provide basis for its revision is called as
______________.
(a) Budget (b) Budgeting
(c) Budgetary Control (d) None of the above
43. A ______________ is a powerful tool available to the management for the purpose of
maximizing profits.
(a) Budget (b) Decrease in selling price
(c) Standard Norm (d) Increase in selling price
44. Fixed Budget is also known as ______________.
(a) Static Budget (b) Standard Budget
(c) Master Budget (d) Flexible Budget
45. Normal Profit means ______________.
(a) No Profit No Loss (b) Less Profit
(c) Expected Profit (d) None of the above
46. Personnel Budget is also called as ______________.
(a) Cost Budget (b) Labour Budget
(c) Employee Budget (d) None of the above
47. In cash budget, ______________ transactions are considered.
(a) Cash (b) Credit
(c) all financial (d) None of the above
48. Budget is prepared for a ______________ period of time.
(a) Fixed (b) One Month
(c) One Year (d) None of the above
49. Purchase Budget is also called as ______________.
(a) Production Budget (b) Material Budget
(c) Cost Budget (d) None of the above
50. ______________ is the plan of proposed investment in the fixed assets.
(a) Fixed Budget (b) Capital Expenditure Budget
(c) Cash Budget (d) Purchase Budget
1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

2. (a) 12. (a) 22. (a) 32. (a) 42. (c)
3. (a) 13. (b) 23. (b) 33. (a) 43. (a)
4. (a) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (b) 25. (d) 35. (d) 45. (a)
6. (d) 16. (a) 26. (a) 36. (a) 46. (b)
7. (d) 17. (d) 27. (a) 37. (a) 47. (c)
8. (c) 18. (d) 28. (d) 38. (d) 48. (a)
9. (a) 19. (a) 29. (b) 39. (a) 49. (b)
10. (b) 20. (a) 30. (b) 40. (a) 50. (b)
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All in One

Multiple Choice Questions

Dr. Abhijit Mancharkar Dr. Shriprakash Soni

Prof. Deepali Desai Prof. Amey Joshi

Prof. Rohini Sawalkar – Saxena

ISO 9001:2008 CERTIFIED

First Edition : 2016

Unit No. Contents No. of

Unit No. Contents No. of

Unit No. Contents No. of

Unit No. Contents No. of

Unit No. Contents No. of

Unit – 2 Individual Process and Behavior: Hours:

Unit – 5 Managing Change: Hours:

Unit No. Contents No. of

Course Code Course Name Page Nos.

101 Accounting for Business Decisions 1 – 27

102 Economic Analysis for Business Decisions 28 – 56

103 Legal Aspects of Business 57 – 86

104 Business Research Methods (BRM) 87 – 113

105 Organizational Behaviour 114 – 140

106 Basics of Marketing (BOM) 141 – 170

9. According to ______________ concept, assets purchased are generally recorded in

44. Which is the most popular and acceptable software?

Answer Key of Chapter 1

1. (a) 11. (a) 21. (a) 31. (a) 41. (b)

11. Every adjustment has two effects, i.e., ______________.

(c) Accounting Conventions

36. Gross Profit is transferred to ______________.

49. ______________ is not a current liability.

Answer Key of Chapter 2

1. (d) 11. (a) 21. (d) 31. (a) 41. (d)

12. Telephone bill, Electricity bill is an example of ______________.

37. Insurance is an example of ______________.

Answer Key of Chapter 3

1. (a) 11. (a) 21. (a) 31. (c) 41. (a)

11. Out of the following, which is the method of issuing material.

19. Material Control includes ______________.

40. The process of apportionment is also known as ______________ of overhead.

Answer Key of Chapter 4

1. (a) 11. (d) 21. (a) 31. (d) 41. (d)

Answer Key of Chapter 5

1. (a) 11. (c) 21. (a) 31. (a) 41. (b)

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