IC89 Mock Test Sample 17
Management Accounting is the process of providing financial and non-financial information to management for planning, controlling, and decision-making. It includes budgeting, ratio analysis, forecasting, variance analysis, and cost control techniques to improve business efficiency and profitability. Financial markets provide investment opportunities through shares, bonds, debentures, derivatives, and mutual funds. Risk management helps organizations minimize losses caused by market fluctuations and financial uncertainties. Regulatory bodies like SEBI and IRDAI ensure transparency and investor protection. Financial statement analysis, capital budgeting, and working capital management help evaluate performance and investment decisions. These concepts support financial stability, operational efficiency, and long-term wealth maximization.
Q1. What is the main purpose of Management Accounting?
a) Entertainment
b) Decision-making
c) Advertising
d) Manufacturing
Q2. Which ratio measures a company’s ability to meet current 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 authority regulates the securities market in India?
a) RBI
b) LIC
c) SEBI
d) NABARD
Q5. Which type of risk affects the entire market?
a) Business risk
b) Default risk
c) Financial 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) Fixed Deposit Investment
c) Foreign Direct Investment
d) Fund Deposit Insurance
Q8. Which type of fund mainly invests in company shares?
a) Debt fund
b) Hedge fund
c) Infrastructure fund
d) Equity fund
Q9. Which analysis compares financial performance of companies?
a) Market analysis
b) Demand analysis
c) Ratio analysis
d) Technical analysis
Q10. Which insurance policy provides only risk cover?
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 helps determine security prices?
a) Liquidity
b) Price discovery
c) Financing
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) Unit holders
d) Shareholders
Q17. Which system establishes standards and targets 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 company assets and liabilities?
a) Income statement
b) Cash flow statement
c) Balance sheet
d) Fund flow statement
Q20. Which budgeting method starts every expense estimate from zero?
a) Flexible budgeting
b) Cash budgeting
c) Zero-based budgeting
d) Master budgeting
