IC89 Mock Test Sample 20
Management Accounting is a system that provides financial and statistical information to management for planning, controlling, and decision-making. It includes budgeting, forecasting, ratio analysis, variance analysis, and cost control to improve organizational efficiency and profitability. Financial markets provide investment opportunities through shares, bonds, debentures, derivatives, and mutual funds. Risk management helps reduce losses caused by market and economic uncertainties. Regulatory bodies such as SEBI and IRDAI ensure transparency and investor protection. Financial statement analysis, working capital management, and capital budgeting assist businesses in evaluating performance and investment decisions. These concepts support financial stability, operational efficiency, and long-term wealth maximization.
Q1. What is the main objective of Management Accounting?
a) Entertainment
b) Decision-making
c) Advertising
d) Manufacturing
Q2. Which ratio measures the firm's ability to meet short-term liabilities?
a) Profitability ratio
b) Liquidity ratio
c) Activity ratio
d) Market 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) NABARD
d) SEBI
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) Fixed Deposit Investment
b) Fund Deposit Insurance
c) Financial Debt Instrument
d) Foreign Direct Investment
Q8. Which type of fund mainly invests in equity shares?
a) Debt fund
b) Hedge fund
c) Equity fund
d) Infrastructure fund
Q9. Which analysis compares financial performance of companies?
a) Technical analysis
b) Demand analysis
c) Ratio analysis
d) Market 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) Hedging
d) Price discovery
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 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) Master budgeting
d) Zero-based budgeting
