IC89 Mock Test Sample 11
Management Accounting assists management in planning, controlling, budgeting, and making financial decisions for business growth. It uses tools like budgeting, ratio analysis, variance analysis, and forecasting to improve efficiency and profitability. Financial markets offer investment opportunities through shares, bonds, debentures, derivatives, and mutual funds. Risk management helps organizations reduce uncertainties caused by market fluctuations and economic changes. Regulatory bodies such as SEBI and IRDAI maintain transparency and protect investors. Financial statements and capital budgeting techniques help evaluate performance and investment decisions. Working capital management, liquidity analysis, and profitability measurement are essential for maintaining financial stability and achieving long-term wealth maximization.
Q1. What is the primary purpose of Management Accounting?
a) Entertainment
b) Decision-making
c) Advertising
d) Manufacturing
Q2. Which ratio measures a company’s ability to pay short-term liabilities?
a) Profitability ratio
b) Activity ratio
c) Liquidity ratio
d) Market ratio
Q3. Which instrument represents ownership in a company?
a) Bonds
b) Debentures
c) Equity shares
d) Fixed deposits
Q4. Which organization regulates securities markets in India?
a) RBI
b) LIC
c) NABARD
d) SEBI
Q5. Which risk affects the entire market?
a) Default risk
b) Business risk
c) Systematic risk
d) Financial risk
Q6. Which contract is standardized and traded on an exchange?
a) Forward contract
b) Futures contract
c) Open contract
d) Swap contract
Q7. What does FDI stand for?
a) Fund Deposit Insurance
b) Foreign Direct Investment
c) Fixed Deposit Investment
d) Financial Debt Instrument
Q8. Which fund mainly invests in company shares?
a) Debt fund
b) Equity fund
c) Hedge fund
d) Infrastructure fund
Q9. Which analysis compares financial performance?
a) Technical analysis
b) Demand analysis
c) Ratio analysis
d) Market analysis
Q10. Which policy provides only insurance protection without savings?
a) Whole life policy
b) Endowment policy
c) Pension policy
d) Term insurance
Q11. What is the face value of a bond called?
a) Coupon rate
b) Market value
c) Maturity value
d) Par value
Q12. Which market function determines security prices?
a) Liquidity
b) Financing
c) Price discovery
d) Hedging
Q13. Which ratio is also called Expense Ratio?
a) Operating ratio
b) Liquidity ratio
c) Solvency ratio
d) Market ratio
Q14. Which activities generate the principal income of a business?
a) Financing activities
b) Investing activities
c) Operating activities
d) Administrative activities
Q15. What is the mean of squared deviations called?
a) Alpha
b) Beta
c) Variance
d) Standard cost
Q16. Mutual fund investors are known as:
a) Debtors
b) Creditors
c) Unit holders
d) Policyholders
Q17. Which system establishes targets and standards for performance?
a) Inventory control system
b) Budgetary control system
c) Payroll system
d) Costing system
Q18. Which derivative protects against commodity price fluctuations?
a) Commodity derivative
b) Equity derivative
c) Currency derivative
d) Embedded derivative
Q19. Which financial statement shows assets and liabilities?
a) Income statement
b) Cash flow statement
c) Balance sheet
d) Fund flow statement
Q20. Which budgeting method starts from zero for all expenses?
a) Flexible budgeting
b) Master budgeting
c) Zero-based budgeting
d) Cash budgeting
