Paper 10 Cost & Management Accounting and Financial Management True and False

 

INTERMEDIATE EXAMINATION

Paper 10 Cost & Management Accounting and Financial Management 



Paper 10 Cost & Management Accounting and Financial Management True and False

A. State whether the following are True or False

1) Marginal Costing is useful for long term planning. False

2) Profit Planning and Control is not a part of Budgetary Control Mechanism. False

3) Standard Costs are based on technical assessments. True

4) PV Chart exhibits the relationship between profit and overhead volume. False


B. State whether the following are True or False     

1) In Financial Management, the objective of Financial Manager is profit maximization. False

2) Investment Decisions and Capital Budgeting are one and the same. False

3) Operating Leverage analyses the relationship between Sales Level and Earning Per Share (EPS). False

4) The Cost of Capital is the required rate of return to maintain the value of the firm. True


C. State whether the following are True or False

1) Management Accounting is largely based on estimates and as such total accuracy is not ensured under Management Accountancy. True

2) The main objective of Budgetary control is to co-ordinate the different departments. False

3) Standard Costing are applicable in Banking Industry. False

4) Learning Curve is a Cost Reduction technique. False


D. State whether the following are True or False     

1) Debt Service Coverage Ratio indicates the liquidity of a firm in relation to its ability to meet projected daily expenditure from operations. False

2) Bill Discounting is defined as the relationship between the seller of goods and a financial firm, called the Factor. False

3) Finance is called the "Chemistry of money". False

4) Capital Budgetary Forecasts Returns on proposed long-term investments and compares profitability of different Investments and their cost of capital. True


E. State whether the following are True or False     

1) Standard Costing may not be suitable for small concerns. True

2) Production Budget is prepared before Sales Budget. False

3) Budgets are always prepared for one year. False

4) At Break Even Point, the Margin of Safety is nil. True


F. State whether the following are True or False     

1) In mutually exclusive capital budgeting decisions, the firm can accept all feasible proposals. False

2) Weighted Average Cost of Capital in always calculated with reference to book value of different sources of funds. False

3) Debt-Equity Ratio is a measure of long-term solvency of a firm. True

4) Capital Rationing as a situation when the Government has imposed a ceiling on investment by a firm. False 

New