The primary objective of management accounting is to: MCQ with Answer and Explanation

The primary objective of management accounting is to:
A. Assist management in planning and decision-making
B. Calculate tax liability
C. Provide information to external stakeholders
D. Ensure compliance with accounting standards
Answer: Option A
Solution (By JKSSB Mock Tests)
Management accounting focuses on providing internal management with the financial and non-financial information needed for planning, controlling, and decision-making.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Independence' of an auditor is required because:
A. To maintain objectivity and impartiality in the audit opinion
B. To increase revenue
C. To comply with company law only
D. To reduce fees

Correct Answer: Option A


Explanation:
Independence ensures unbiased opinion.

Question #2
S1: Audit is an independent examination of financial statements. S2: Audit is conducted to detect all frauds and errors. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. S1 only
C. S2 only
D. Both S1 and S2

Correct Answer: Option B


Explanation:
Audit is an independent examination to express an opinion on the financial statements. While it aims to detect material misstatements, it cannot guarantee the detection of *all* frauds and errors due to inherent limitations like sampling and collusion. S1 is correct, S2 is incorrect.

Question #3
Income tax paid by a sole proprietor is treated as:
A. Statutory liability in Balance Sheet
B. Drawings and deducted from Capital
C. Direct expense in Trading Account
D. Business expense in P&L Account

Correct Answer: Option B


Explanation:
For a sole proprietor, income tax is a personal expense on the owner's income, hence treated as drawings and reduced from capital.