CMA INTERMEDIATE EXAMINATION
Paper 10 Cost & Management Accounting and Financial Management
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