ICFAI MBA Account for decision making books

Can you suggest me the names of some good ICFAI MBA Account for decision making books????????

[Arvind Kumar]

Yes sure, here I am suggesting you the names of some good books for the preparation of ICFAI MBA Account for decision making:


Accounting for Decision Making and Control Paperback – June 1, 2005
by Jerold L. Zimmerman (Author)

CFAI University M.B.A Accounting for decision making -I Question paper

1. Which of the following transactions results in an increase in the owners’ equity?
(a) Sale of fixed assets at book value
(b) Earning revenue income
(c) Borrowing additional loans
(d) Sale of investments at book value
(e) Purchase of fixed assets. (1mark)

2. Which of the following accounting concepts is applicable to determine the profits or losses accrued?
(a) Money measurement concept
(b) Materiality concept
(c) Business entity concept
(d) Conservatism concept
(e) Matching concept.
(1mark)

3. Duality concept states that
(a) The total assets is equal to the sum of owners’ equity and outside liabilities
(b) The outside liabilities is equal to the sum of owners’ equity and the total assets
(c) The owners’ equity is equal to the sum of total assets and outside liabilities
(d) The total assets is equal to the sum of current assets and owners’ equity
(e) The owners’ equity is equal to the sum of total current assets and total current liabilities. (1mark)

4. Assets are to be recorded in the books of accounts at the price paid to acquire them. This statement is
in recognition of
(a) Cost concept
(b) Going concern concept
(c) Conservatism concept
(d) Business entity concept
(e) Consistency concept. (1mark)

5. Depreciation is allocated over the effective life of an asset according to
(a) Conservatism concept
(b) Going concern concept
(c) Matching concept
(d) Time period concept
(e) Business entity concept. (1mark)

6. Contingent liabilities appearing as notes to balance sheet reiterate
(a) Conservatism concept
(b) Realization concept
(c) Concept of full disclosure
(d) Time period concept
(e) Consistency concept.
(1mark)

7. The capital of Ram Ltd., is Rs.7,00,000. The outside liabilities of the company are Rs.50,000. If the
total of assets are Rs.8,25,000, then the reserves & surplus of Ram Ltd., are
(a) Rs.1,25,000
(b) Rs.1,75,000
(c) Rs. 75,000
(d) Rs. 50,000
(e) Rs. 25,000. (2marks)

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8. Which of the following accounting concepts assume that a business will carry on its operations for an
indefinite period?
(a) Business entity
(b) Going concern
(c) Periodicity
(d) Duality
(e) Consistency. (1mark)

9. According to the requirement of US GAAP compliance for Indian Corporate, an Indian company, if it
is incorporated under the laws of a jurisdiction outside of the United States, is called as
(a) Foreign Private Issuer
(b) Foreign Investor
(c) Foreign Incorporator
(d) Foreign Institutor
(e) Foreign Capitalist. (1mark)

10.According to which of the following accounting concepts, are the shareholders treated as creditors for
the amount they pay on shares?
(a) Cost concept
(b) Duality concept
(c) Going concern concept
(d) Money measurement concept
(e) Business entity concept. (1mark)

11. Every year inventory should be valued on the same basis. This is based on
(a) Cost concept
(b) Consistency concept
(c) Conservatism concept
(d) Matching concept
(e) Accounting period concept. (1mark)

12.The following are the external users of financial statements, except
(a) Government agencies
(b) Lenders
(c) Customers
(d) Investors
(e) Board of Directors. (1mark)

13.Which of the following is not an objective of accounting?
(a) Maintenance of records for business transactions
(b) Ascertaining whether the business operations have been profitable or not
(c) Depicting the financial position of the business
(d) Providing information to the users of financial information
(e) Maintenance of the records of human resources of the company. (1mark)

14.Which of the following is not a qualitative characteristic of financial statements?
(a) Understandability
(b) Relevance
(c) Reliability
(d) Comparability
(e) Periodicity. (1mark)

15.Death of the Chairman of a company is not recorded in the books of accounts in recognition of
(a) Money measurement concept
(b) Cost concept
(c) Time period concept
(d) Revenue recognition concept
(e) Duality concept. (1mark)

16.Which of the following is the correct order for arranging the liabilities in a balance sheet prepared
according to permanency order? (1mark)

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(a) Capital, long-term liabilities, short-term liabilities and current liabilities
(b) Long-term liabilities, short term liabilities, current liabilities and capital
(c) Current liabilities, long-term liabilities, short term liabilities and capital
(d) Current liabilities, short term liabilities, long-term liabilities and capital
(e) Capital, short term liabilities, current liabilities and long-term liabilities.
17.The following is the data pertaining to Axon Ltd., as on March 31, 2008:
Particulars Rs.
Reserves & surplus 22,500
Closing stock 37,500
Fixed assets 2,70,000
Sundry debtors 22,500
Sundry creditors 34,000
Cash and bank 26,500
Share capital 3,00,000
The total of the ‘Sources of Funds’ in the balance sheet of Axon Ltd., as on March 31, 2008 was
(a) Rs.3,56,500
(b) Rs.3,34,000
(c) Rs.3,22,500
(d) Rs.2,96,500
(e) Rs.3,71,500. (2marks)

18.Normally, a complete set of financial statements does not include
(a) Balance sheet
(b) Income statement
(c) Statement of cash flows
(d) Notes to balance sheet
(e) Prospectus. (1mark)

19.Which of the following items does not appear under the head ‘Reserves and Surplus’ in the balance
sheet?
(a) General reserve
(b) Sinking fund
(c) Proposed dividend
(d) Securities premium
(e) Capital redemption reserve. (1mark)

20.The activities that are basically related to the changes in share capital and long term borrowings of
the company are known as
(a) Cash flows relating to financing activities
(b) Cash flows relating to investing activities
(c) Cash flows relating to operating activities
(d) Cash flows relating to operating activities and financing activities
(e) Cash flows relating to financing activities and investing activities. (1mark)

21.The following data are available from the books of Alfa Ltd., for the year 2007-08:
? Cash inflow from operating activities : Rs.1,29,000
? Net Cash outflow from investing activities : Rs.1,00,000
? Net Cash outflow from financing activities : Rs. 35,000
? Cash at the beginning of the period : Rs. 95,000
Cash at the end of the year 2007-08 amounted to
(a) Rs. 89,000
(b) Rs.1,01,000
(c) Rs. 31,000
(d) Rs. 98,000
(e) Rs.1,59,000. (2marks)

22.The total of application of funds of Daniel Ltd., amounted to Rs.90 lakh. The shareholders funds
amounted to Rs.60 lakh. The loan funds of Daniel Ltd., amounted to (2marks)

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(a) Rs.145.00 lakh
(b) Rs.150.00 lakh
(c) Rs. 30.00 lakh
(d) Rs. 66.67 lakh
(e) Rs.100.00 lakh.
23.Which of the following items should not appear under the head ‘unsecured loans’ in the Balance Sheet
of a company?
(a) Sinking fund
(b) Short-term loans from others
(c) Short-term loans from banks
(d) Short-term advances from banks
(e) Fixed deposits. (1mark)

24.Which of the following is not classified as inventory in the financial statements?
(a) Finished goods
(b) Work-in-progress
(c) Stores and spares
(d) Raw-materials
(e) Advance payment made to suppliers for raw materials. (1mark)

25.Following information pertaining to Alex Publishing Ltd., was extracted from the accounting records
for the year ended March 31, 2008:
Particulars Rs.
Cash received from sales 9,28,000
Royalties received 12,500
Cash paid to suppliers and employees 5,45,000
Office rent paid 1,30,000
Dividend paid 42,000
The net cash flow from operating activities for 2007-08 was
(a) Rs.2,58,500
(b) Rs.3,00,500
(c) Rs.2,65,500
(d) Rs.2,88,000
(e) Rs.2,53,000. (2marks)

26.Which of the following is treated as an extraordinary item in the income statement of a company?
(a) Bad debts written off
(b) Loss on sale of asset
(c) Cash discount allowed
(d) Depreciation on assets
(e) Occurrence of fire in the company. (1mark)

27.Inventories should be valued at
(a) Market value
(b) Current cost
(c) Net realizable value
(d) Nominal value
(e) Lower of cost or Net Realizable Value. (1mark)

28.Balances with Customs and Port Trust, comes under the head
(a) Loans and advances in the balance sheet
(b) Current liabilities and Provisions in the balance sheet
(c) Miscellaneous expenditure in the balance sheet
(d) Investments in the balance sheet
(e) Fixed assets in the balance sheet. (1mark)

29.Operating expenses does not include
(a) Selling expenses
(b) Administrative expenses
(c) Bad debts (1mark)

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(d) Cash discount allowed
(e) Loss on sale of investments.
30.Which of the following items is a financing activity in a cash flow statement?
(a) Payment to acquire shares
(b) Payment of dividend tax
(c) Dividends received
(d) Payments to employees
(e) Acquisition of long lived assets. (1mark)

31.Brij Manufacturing Ltd., had the following activities relating to its stock investments during 2007-08:
? Acquired 2,000 shares in Bhuvan Ltd., for Rs.26,000.
? Sold an investment for Rs.35,000 when the carrying value was Rs.33,000.
? Acquired 5-year Fixed deposit for Rs.50,000. (During the year, interest of Rs.3,750 was
received.)
? Collected dividends of Rs.1,200 on investments.
As per the statement of cash flows, the net cash outflow from investing activities of Brij
Manufacturing Ltd., for the year 2007-08 was
(a) Rs.37,250
(b) Rs.38,050
(c) Rs.39,800
(d) Rs.36,050
(e) Rs.41,000. (2marks)

32.Which of the following practices does not amount to revenue manipulation to inflate the earnings?
(a) Vendor financing
(b) Trade loading
(c) Channel stuffing
(d) Overstating the allowance for uncollectible accounts
(e) Not recognizing rebates. (1mark)

33.Sai Ltd., invested Rs.6,00,000 in fixed interest bearing securities. If the capital gearing ratio of the
company is 0.60, the equity shareholder’s fund is
(a) Rs.10,00,000
(b) Rs. 3,60,000
(c) Rs. 6,00,000
(d) Rs. 2,40,000
(e) Rs.12,00,000. (2marks)

34.Which of the following will not appear in Profit and Loss Account of a business?
(a) Interest on investment
(b) Bad debts
(c) Provision for doubtful debts
(d) Interest paid out of capital to the extent not written off
(e) Reserve for discount on sundry creditors. (1mark)

35.Which of the following heads is not shown under ‘Sources of Funds’ in the balance sheet of a
company?
(a) Share capital
(b) Reserves and surplus
(c) Miscellaneous expenditure
(d) Secured loans
(e) Unsecured loans. (1mark)

36.The following information is related to Arnika Industries Ltd.:
Current liabilities Rs.150 lakh
Closing inventory Rs.100 lakh
Current ratio 1.50
Account receivables Rs.100 lakh (2marks)

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What is the amount of cash and bank balance (assuming there are no other current assets)?
(a) Rs.18 lakh
(b) Rs.10 lakh
(c) Rs.12 lakh
(d) Rs.15 lakh
(e) Rs.25 lakh.
37.Which of the following is not a limitation of a Balance Sheet?
(a) It does not contain certain assets and liabilities despite its claim to be the statement of all assets
and liabilities
(b) The values of various assets within the balance sheet are not always measured according to the
same rule
(c) Personal judgment plays a great part in determining the figures of the balance sheet
(d) Balance sheet is prepared on a particular date and hence there is every possibility of windowdressing
(e) Assets and liabilities are shown in the liquidity or permanency order in the balance sheet of a
company. (1mark)

38.The short-term creditors are interested in
(a) Liquidity ratios
(b) Valuation ratios
(c) Leverage ratios
(d) Capital structure ratios
(e) Dividend ratios. (1mark)

39.The ratio that can be directly inferred from the income statement is
(a) Debtors turnover ratio
(b) Current ratio
(c) Dividend pay-out ratio
(d) Debt-equity ratio
(e) Net profit margin ratio. (1mark)

40.The analysis which involves comparison of different entities belonging to the same industry is known
as
(a) Year-to-year change analysis
(b) Time series analysis
(c) Trend analysis
(d) Cross-sectional analysis
(e) Cash flow analysis. (1mark)

41.Ramosys Hardware Ltd., furnished the following information for the year ended March 31, 2008:
Particulars Rs.
Income from Hardware services
Hardware development expenses
Selling and marketing expenses
General and administrative expenses
Interest on investments
4,00,00,000
1,75,00,000
66,00,000
45,00,000
2,50,000
The operating profit of Ramosys Hardware Ltd., was
(a) Rs.1,14,00,000
(b) Rs.1,06,50,000
(c) Rs.1,11,50,000
(d) Rs.1,80,00,000
(e) Rs.1,59,00,000. (2marks)

42.Shyam Ltd., furnished the following information:
Particulars Rs.
Profit after tax
Average shareholders’ equity
5,00,000
22,50,000
If return on equity is 10%, then the preference dividends of Shyam Ltd., is (2marks)

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(a) Rs.17,50,000
(b) Rs. 2,25,000
(c) Rs. 50,000
(d) Rs. 5,00,000
(e) Rs. 2,75,000.
43.The comparison of the business performance of a company over a period of time is known as
(a) Trend analysis
(b) Cross sectional analysis
(c) Cross-industrial analysis
(d) Common size analysis
(e) Cost-benefit analysis. (1mark)

44.Harika Ltd., furnished the following information:
Particulars Rs.
Cost of goods sold 6,00,000
Net Profit 3,00,000
Sales return 1,00,000
If the net profit margin of Harika Ltd., was 25% then the gross profit margin was
(a) 55%
(b) 60%
(c) 40%
(d) 50%
(e) 45%. (2marks)

45.Seema Ltd., furnished the following information:
Particulars Rs.
Sales
Gross profit
Dividends paid
Net profit
40,00,000
25,00,000
4,00,000
10,00,000
If there were no non-operating expenses, the percentage of operating expenses to sales was
(a) 27.50%
(b) 30.50%
(c) 37.50%
(d) 20.50%
(e) 30.00%. (2marks)

46.RK Ltd., furnished the following information:
Particulars 2006-07 (Rs.) 2007-08 (Rs.)
Assets:
Current assets
Fixed assets
Liabilities:
Stakeholder’s equity
Current liabilities
Secured loans
4,50,000
4,87,500
6,37,500
1,50,000
1,50,000
5,50,000
4,50,000
6,37,500
1,50,000
2,12,500
Compared to 2006-07, the percentage of net current assets to total assets in 2007-08 was increased by
(a) 4.00%
(b) 2.00%
(c) 8.00%
(d) 3.80%
(e) 16.00%. (2marks)

47.The paid-up capital of a company is arrived at
(a) After deduction of calls-in-arrear from the subscribed capital
(b) After deduction of calls-in-arrear from the called-up capital (1mark)

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(c) After deduction of calls-in-arrear from the issued capital
(d) After deduction of calls-in-arrear from the authorized capital
(e) After addition of calls-in-arrear to the called-up capital.
48.Pavithra Ltd., has furnished the following data for the year 2007-08:
Cost of goods available for sale Rs.1,00,000
Total sales Rs. 80,000
Gross profit margin on sales 25%
Closing stock of goods as on March 31, 2008 was
(a) Rs.80,000
(b) Rs.60,000
(c) Rs.36,000
(d) Rs.40,000
(e) Rs.20,000. (2marks)

49.The accent of the Indian accounting standard is on
(a) Reporting
(b) Substance
(c) Analysis
(d) Localization
(e) Immateriality. (1mark)

50.Which of the following is a not a difference between US GAAP and Indian Accounting Standard
(Indian AS)?
(a) US GAAP is Rule-based, whereas Indian AS is Principle-based
(b) US GAAP is relatively less flexible compared to Indian AS
(c) According to Indian AS, goodwill arising on amalgamation is amortized over a period of 5
years where as goodwill is generally not amortized as per US GAAP
(d) According to US GAAP, capitalization of interest on constructed assets is required whereas
according to Indian AS capitalization is not required
(e) Revaluation of plant and equipment is prohibited according to US GAAP but it is allowed as
per Indian AS. (1mark)

51.According to US GAAP, the emphasis is on protection of
(a) Creditor
(b) Debtor
(c) Investor
(d) Liquidator
(e) Customer. (1mark)

52.Consider the following data of a company:
Particulars Rs.
Net annual sales 18,25,000
Cost of sales 5,00,000
Average trade debtors 4,50,000
Accounts payable 3,00,000
The average collection period (assuming 365 days a year) was
(a) 60 days
(b) 90 days
(c) 150 days
(d) 200 days
(e) 100 days. (2marks)

53.Sarika Ltd., presented the following information:
Particulars Rs.
Preliminary expenses
Discount allowed on issue of shares
Development expenditure
Provision for proposed dividend
45,000
66,000
58,000 (2marks)

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90,000
The total of Miscellaneous expenditure of Sarika Ltd., was
(a) Rs.2,59,000
(b) Rs.1,69,000
(c) Rs. 79,000
(d) Rs.2,01,000
(e) Rs.1,48,000.
54.According to US GAAP, the foreign exchange differences on monetary transactions are
(a) Recorded in net income
(b) Added to the cost basis of the asset
(c) Added to the cost of fixed asset
(d) Shown as a separate head in balance sheet
(e) Shown as a current liability in the balance sheet. (1mark)

55.The following balances were extracted from the books of Run Ltd., as on March 31, 2008:
Particulars Rs.
Share capital 5,00,000
Secured loans 4,00,000
Current assets 3,01,200
Fixed assets 8,00,000
Reserves and surplus 1,40,000
Sundry creditors 61,200
The total of ‘Application of Funds’ in the balance sheet of Run Ltd., as on March 31, 2008 was
(a) Rs.11,01,200
(b) Rs.11,00,000
(c) Rs.10,40,000
(d) Rs.11,41,200
(e) Rs.11,01,900. (2marks)

56.The following data is extracted from the books of Dravida Ltd., for the year ended March 31, 2008:
Particulars Rs.
Cash in hand 75,000
Cash at bank 1,00,000
Short-term Marketable securities 2,00,000
Current liabilities 3,00,000
The absolute liquid ratio was
(a) 1.25:1
(b) 0.67:1
(c) 0.58:1
(d) 1:1
(e) 0.75:1. (2marks)

57.The following data is extracted from the books of Sindh Motors Ltd., for the year ended March 31, 2008:
Particulars
Creditors turnover ratio 30 times
Average trade creditors Rs.76,650
The average daily credit purchases of Sindh Motors Ltd., (assuming 365 days in a year) were
(a) Rs.6,300
(b) Rs.3,150
(c) Rs.3,500
(d) Rs.4,200
(e) Rs.2,800. (2marks)

58.The following information is related to Ashwini Industries Ltd.: (2marks)

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Current liabilities Rs.400 lakh
Inventory turnover ratio 2.0
Quick ratio 1.50
Cost of good sold Rs.180 lakh
Opening stock Rs. 40 lakh
The total of current assets of the Ashwini Industries Ltd., were
(a) Rs.140 lakh
(b) Rs.740 lakh
(c) Rs.600 lakh
(d) Rs.180 lakh
(e) Rs. 90 lakh.
59.The following data is extracted from the books of Punjab Steels Ltd., for the year ended March 31, 2008:
Particulars Rs.
Sales 15,60,000
Net worth 30,00,000
Sales returns 60,000
If the return on net worth is 0.25, then the net profit margin of Punjab Steels Ltd., was
(a) 48.00%
(b) 50.00%
(c) 25.00%
(d) 43.80%
(e) 40.50%. (2marks)

60.In which of the following methods of financial statement analysis, the items in the income statement
are expressed as percentages of total sales?
(a) Common size analysis
(b) Time series analysis
(c) Revenue analysis
(d) Expense analysis
(e) Profitability analysis. (1mark)

61.Hari Ltd., furnished the following information:
Particulars Rs.
Cash from operations 6,00,000
Dividends paid 1,00,000
Capital expenditure required to maintain productive
capacity used in the production of income
1,00,000
The free cash flow is
(a) Rs. 5,00,000
(b) Rs. 7,00,000
(c) Rs. 4,00,000
(d) Rs.14,00,000
(e) Rs.10,00,000. (2marks)

62.Raj Ltd., furnished the following information for the year 2007-08:
Particulars Rs.
Opening balance of trade creditors 1,80,000
Closing balance of trade creditors 2,00,000
Net credit annual purchases 7,30,000
The average payment period (assuming 365 days a year) for the year 2007-08 was
(a) 100 days
(b) 95 days
(c) 80 days
(d) 55 days
(e) 65 days. (2marks)

63.Savera-Kamath Hotels Ltd., furnished the following information as on March 31, 2008: (2marks)

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Particulars Rs.
Cash paid to supplier of vegetables 6,00,000
Cash received from customers 18,00,000
Interest from investments 1,00,000
Administrative, selling and distribution expenses 1,00,000
Current debt 5,00,000
The operating cash flow to current debt ratio of Savera-Kamath Hotels Ltd., was
(a) 1.71 times
(b) 2.20 times
(c) 2.40 times
(d) 1.81 times
(e) 3.40 times.
64.Satguru Ltd., furnished the following information:
Particulars Rs.
Fixed assets 6,00,000
Current assets 4,00,000
Current liabilities 3,00,000
The capital employed of Satguru Ltd., was
(a) Rs.10,00,000
(b) Rs. 6,00,000
(c) Rs. 5,00,000
(d) Rs. 7,00,000
(e) Rs.13,00,000. (2marks)

65.RXD Ltd., furnished the following information:
Price earning ratio of the equity share 5
Net income available for equity shareholders Rs.3,00,000
Number of outstanding equity shares 2,000
The market price of each share was
(a) Rs.300
(b) Rs. 30
(c) Rs.750
(d) Rs.150
(e) Rs.200. (2marks)

66.The following information was furnished by Bajaz Ltd.:
Equity shareholder’s fund Rs.18,00,000
Number of outstanding equity shares 90,000
Market price of each equity share Rs. 200
The Price to book value was
(a) 0.1
(b) 450.0
(c) 10.0
(d) 4,500
(e) 9,000 (2marks)

67.PVR Cinemas Ltd., provided the following information:
Profit after tax Rs.5,41,800
Preference dividend coverage ratio 12.9 times
Equity dividends Rs.3,20,000
The equity dividend coverage ratio of PVR Cinemas Ltd., was
(a) 1.56 times
(b) 5.61 times (2marks)