SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Strategic Management Accounting

Sample Questions:
Section I: Subjective Questions

1. What are the benefits of implementing a good CSR policy?

2. Write a short note on Inter-organisational Cost Management.

3. What are the facts about uncertainty if firms’ debt level is held constant under standard
regularity conditions?

4. Illustrate how key changes and trends can be highlighted by the use of common size
statements.

5. Write a short note on Bundling.

6. Explain the concept of Value Pricing.

7. How can the five forces model be used?

8. What are the benefits of implementing a good CSR policy?

Section II: Objective Questions

Multiple Choice Single Response

1. Which of the following is a part of PEST analysis?

1] Parties

2] Power

3] Participants

4] Politics

2. Net Working Capital

1] Is the excess of Current assets over Current liabilities

2] Is the excess of Current liabilities over Current assets

3] Is a measure of profitability
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

4] Is a ratio of Current assets to Current liabilities

3. Net Assets turnover is calculated as

1] Sales Revenue / Capital employed

2] Total Revenue / Assets employed

3] Net Revenue / Equity Capital

4] Net Profits / Sales Revenue

4. If very few cost management initiatives strengthen a firm's strategic position, then

1] Stop production

2] Increase salaries

3] Sell the assets

4] Firms have to refocus the cost management program

5. Which is the main objective of ICM (Inter-organisational Cost Management)?

1] To increase the cost of competitor firms

2] To find out the solutions through coordinated actions among organisations in the
value chain

3] To gain the sales share in market

4] To hire efficient employee

6. Which of the following is not a reasons for weak cost accounting?

1] Use of costs as indirect measures of quality and time

2] Qualification of the accountant

3] Long time period between cost actualisation and reporting

4] Cost information not reported by activities

7. A comprehensive pricing strategy is comprised of multiple layers creating a

foundation for price setting which will

1] Minimise erosion alone

2] Minimise erosion and maximise profits over time

3] Maximise profits alone

 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

4] Be passive

8. What makes a comparison in trend analysis out of tune?

1] Accounting practices

2] Adjustments

3] Change in price level

4] Wrong information

9. When does the use of a Delphi make sense?

1] When short-term issues have to be assessed

2] When no issues have to be assessed

3] When personal issues have to be assessed

4] When long-term issues have to be assessed

10. One of the following is not a determinant of the threat of new entrants in Porter's
Five Forces Model:

1] Brand equity

2] Government policies

3] Access to distribution

4] Perceived level of product differentiation

Multiple Choice Multiple Response

11. The following is true with respect to Capital Gearing ratio:

1] It is similar to debt-equity ratio in respect of capital structure of the firm
2] It indicates what proportion of the permanent capital of the firm consists of long-
term debt
3] This ratio reflects the real claim of creditors and shareholders against the assets
of the firm
4] A high ratio may indicate that a firm is losing business by failing to maintain an
adequate level of
inventory to serve the customer's needs
12. Low geared businesses:

1] Provide scope to increase borrowings when potentially profitable projects are

available

2] Can usually borrow more easily

 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

3] Have to face constraints and covenants when they borrow

4] Do not provide scope to increased borrowings

13. The symptoms of over-trading are

1] Inventory increasing more proportionately than revenue

2] Cash and liquid assets declining at an alarmingly rate

3] Trade payables decreasing rapidly

4] Receivables decreasing more than proportionately to revenue

14. Which of the following are characteristics of common size statement?

1] Common-size statement is known as vertical analysis

2] It is a side-by-side comparison of two or more years’ financial statements

3] It is useful for comparing data from different companies

4] It shows the items appearing on it in percentage form as well as in rupee form

15. All of these are external stakeholders of an organisation:

1] Customers

2] Suppliers

3] Banks

4] Shareholders

16. The following is true with respect to P / E ratio:

1] This represents the market's view of the future prospects of the share

2] High P / E ratio suggests that high growth rate is expected

3] This represents the market's consensus of the past prospects of that share

4] The lower the P/E ratio, the faster the growth the market is expecting in the
company's future EPS

17. In which form do the items appearing on common size statement show?

1] In percentage form

2] In unit form
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

3] In rupee form

4] In tabular form

18. The auditing strategy often depends on the

1] Size of the company

2] Nature of owners

3] Scope of business operations

4] Location

Fill in the Blanks

19. A customer profitability analysis emphasises assigning costs and revenues to

segments of the __________ .

1] Product

2] Customer base

3] Department

4] Units

20. __________ indicates the trend of such variables as sales, cost of production (or
operation), profits, assets and liabilities.

1] Horizontal analysis

2] Trend analysis

3] Ratio analysis

4] Financial analysis

21. A strategic audit helps small business owners assess whether internal processes
move the needle toward their __________ .

1] Vision

2] Mission

3] Strategic goals

4] Company
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

22. __________ model examines how short-term debt and the immediate threat of
bankruptcy affect pricing decisions.

1] Cost model

2] Two-period model

3] One-period model

4] Switching cost model

23. Game theoryâs concepts, such as the winnerâs curse or __________ have found
their way into popular discourse.

1] Teams

2] Strategies

3] Prisoner’s dilemma

4] Jail

24. Gross profit ratio is affected by factors like change in __________ due to increased
competition and sales mix.

1] Selling prices

2] Purchase price

3] Discount received

4] Discount given

25. Capital intensive manufacturing industries like electrical equipment manufacturers

usually have relatively __________ margins.

1] Low, higher

2] High, lower

3] Medium, higher

4] Medium, lower

26. A well-defined pricing policy is required to discipline the __________ .

1] Process

2] Project
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

3] Product

4] Price

27. __________ ratios indicate the degree of risk attached to the company and the
sensitivity of earnings and dividends to changes in profitability and activity level.

1] Gearing

2] Liquidity

3] Profitability

4] Activity

28. When a resource is heterogeneous, the value gained from its use is subject to other
resources integration, which makes hierarchical control effective and confirms a
more __________ .

1] Scattered structure

2] Organised structure

3] Cost

4] Profit

State True or False

29. Dodd-Frank Act has imposed burdens on many companies by requiring more
disclosures about annual roxy statements and executive compensation.

30. Financial statements are generated by a companyâs financial accounting system.

31. Determination of replacement cost of an employee is highly subjective and often

possible.

32. Inventory turnover ratio measures the relationship between the cost of goods sold
and the inventory level.

33. The operating efficiency of a firm and its ability to ensure adequate returns to the
shareholders depends ultimately on the profits earned by it.

34. Vertical analysis includes calculation of the amount and percentage changes from
the previous year to the current year.

35. The unamortised cost is shown as investment in human assets.

36. Price is based on volume of usage of the good in 1st degree price discrimination
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

37. The firm charges more at off-peak times.

38. Interest coverage ratio uses the concept of net profits after taxes.

Match the Following

39. 1] Waste water and production process 1] Environmental Accounting

waste
2] Financial statements 2] Financial Accounting
3] Status health and safety at work 3] Social Accounting
4] Cost Management Techniques 4] Management Accounting

5] Corporate Social Responsibility

6] Lehman Brothers Case

40. 1] A statement that shows the items 1] Common-size statement

appearing on it in percentage form as
well as in rupee form

2] A side-by-side comparison of two or 2] Horizontal analysis

more years’ financial statements

3] The presentation of a company’s 3] Vertical analysis

financial statements in common-size
form
4] The expression of several years’ 4] Trend percentages
financial data in percentage form in
terms of a base year
5] Trend analysis

6] Ratio analysis

41. 1] ICM means 1] Inter-organisational Cost

Management
2] A firm network 2] Groups of companies taking part in
many supply chains
3] Processes for creating networks 3] Convergent and divergent
4] Responsiveness 4] Abilities to cope with uncertainty and
changing market conditions
5] Multi-tier buyer

6] Performance management

42. 1] Value chain 1] Michael Porter

2] Delphi method 2] Long-term issues
3] Financial resources 3] Ability to finance its chosen strategy
4] Strategic alignment 4] Onboarding
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Strategic Management Accounting

5] Customer

6] Employee