IC89 Mock Test Sample 15
Management Accounting provides financial information and analytical tools to help management in planning, controlling, and decision-making. It includes budgeting, forecasting, ratio analysis, variance analysis, and cost control to improve efficiency and profitability. Financial markets offer investment opportunities through shares, bonds, debentures, derivatives, and mutual funds. Risk management helps businesses reduce losses from market fluctuations and economic uncertainties. Regulatory bodies such as SEBI and IRDAI maintain transparency and investor protection. Financial statement analysis, working capital management, and capital budgeting support business growth and effective fund utilization. These concepts help organizations achieve operational efficiency, financial stability, and long-term wealth maximization.
Q1. What is the primary objective of Management Accounting?
a) Entertainment
b) Decision-making
c) Manufacturing
d) Advertising
Q2. Which ratio measures a company’s ability to pay short-term liabilities?
a) Profitability ratio
b) Liquidity ratio
c) Market ratio
d) Activity ratio
Q3. Which financial instrument represents ownership in a company?
a) Bonds
b) Debentures
c) Equity shares
d) Fixed deposits
Q4. Which authority regulates the securities market in India?
a) RBI
b) LIC
c) SEBI
d) NABARD
Q5. Which type of risk affects the overall market?
a) Business risk
b) Financial risk
c) Default risk
d) Systematic risk
Q6. Which contract is standardized and traded on exchanges?
a) Forward contract
b) Futures contract
c) Swap contract
d) Open contract
Q7. What does FDI stand for?
a) Financial Debt Instrument
b) Fund Deposit Insurance
c) Foreign Direct Investment
d) Fixed Deposit Investment
Q8. Which fund mainly invests in equity shares?
a) Debt fund
b) Hedge fund
c) Infrastructure fund
d) Equity fund
Q9. Which analysis compares the financial performance of companies?
a) Demand analysis
b) Market analysis
c) Ratio analysis
d) Technical analysis
Q10. Which insurance policy provides only risk protection?
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) Maturity value
c) Market value
d) Par value
Q12. Which market function helps determine security prices?
a) Liquidity
b) Financing
c) Price discovery
d) Hedging
Q13. Which ratio is also known as Expense Ratio?
a) Operating ratio
b) Solvency ratio
c) Activity ratio
d) Liquidity ratio
Q14. Which activities generate the principal revenue of a business?
a) Financing activities
b) Investing activities
c) Operating activities
d) Administrative activities
Q15. What is the mean of squared deviations from average return called?
a) Alpha
b) Beta
c) Variance
d) Standard cost
Q16. Investors in mutual funds are known as:
a) Debtors
b) Creditors
c) Shareholders
d) Unit holders
Q17. Which system establishes standards and performance targets?
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 company 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 every expense?
a) Flexible budgeting
b) Master budgeting
c) Cash budgeting
d) Zero-based budgeting
