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100+ Free III IC-89 Practice Questions

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2026 Statistics

Key Facts: III IC-89 Exam

100

Online MCQs per paper

III Examination Handbook

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

40

Credit points for IC-89

III credit-point system

INR 600

India paper fee (40 credits) w.e.f. 1.4.2026

III Table of Fees

INR 800

Fresh registration (India) w.e.f. 1.4.2026

III Table of Fees

III IC-89 is a 100-question, 2-hour online MCQ paper on Management Accounting. Passing requires 60% (Distinction from 75%). India paper enrollment for this 40-credit subject is INR 600 w.e.f. 1.4.2026, plus INR 800 registration for fresh candidates (taxes extra).

Sample III IC-89 Practice Questions

Try these sample questions to test your III IC-89 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following is considered a primary objective of management accounting?
A.To provide information to internal management for decision-making and planning.
B.To provide information for external stakeholders such as investors and creditors.
C.To ensure compliance with statutory audit requirements.
D.To calculate the exact tax liability of the organization.
Explanation: Management accounting primarily focuses on providing financial and non-financial information to internal management to assist in planning, controlling, and decision-making.
2If a company has a Current Ratio of 2.5 and Current Liabilities of ₹40,000, what are its Current Assets?
A.₹16,000
B.₹100,000
C.₹60,000
D.₹80,000
Explanation: Current Ratio = Current Assets / Current Liabilities. Therefore, Current Assets = 2.5 * 40,000 = ₹100,000.
3Which ratio indicates the proportion of debt and equity used to finance a company's assets?
A.Quick Ratio
B.Inventory Turnover Ratio
C.Debt-Equity Ratio
D.Net Profit Ratio
Explanation: The Debt-Equity Ratio is a leverage ratio that compares a company's total liabilities to its shareholder equity, indicating how much debt is used to finance assets relative to equity.
4Calculate the Quick Ratio if Current Assets are ₹150,000, Inventory is ₹50,000, Prepaid Expenses are ₹10,000, and Current Liabilities are ₹60,000.
A.2.0:1
B.2.5:1
C.1.67:1
D.1.5:1
Explanation: Quick Assets = Current Assets - Inventory - Prepaid Expenses = 150,000 - 50,000 - 10,000 = ₹90,000. Quick Ratio = 90,000 / 60,000 = 1.5.
5What is the primary formula for calculating Contribution Margin?
A.Sales - Variable Costs
B.Sales - Fixed Costs
C.Gross Profit - Operating Expenses
D.Fixed Costs / P/V Ratio
Explanation: Contribution Margin is calculated as Sales revenue minus Variable Costs. It represents the amount remaining to cover fixed costs and generate profit.
6If Sales are ₹200,000 and Variable Costs are ₹120,000, what is the Profit/Volume (P/V) Ratio?
A.60%
B.40%
C.50%
D.30%
Explanation: Contribution = Sales - Variable Costs = 200,000 - 120,000 = 80,000. P/V Ratio = (Contribution / Sales) * 100 = (80,000 / 200,000) * 100 = 40%.
7At the break-even point, which of the following is true?
A.Total Revenue equals Total Variable Costs.
B.Profit is maximized.
C.Total Contribution equals Total Fixed Costs.
D.Margin of Safety is highest.
Explanation: At the break-even point, Total Revenue = Total Costs (Variable + Fixed). Therefore, Total Revenue - Variable Costs = Fixed Costs, meaning Contribution = Fixed Costs.
8Given Fixed Costs of ₹50,000 and a P/V Ratio of 25%, calculate the Break-Even Sales.
A.₹12,500
B.₹150,000
C.₹250,000
D.₹200,000
Explanation: Break-Even Sales = Fixed Costs / P/V Ratio = 50,000 / 0.25 = ₹200,000.
9Margin of Safety is defined as:
A.The difference between actual sales and break-even sales.
B.The difference between actual sales and budgeted sales.
C.The difference between total sales and variable costs.
D.The difference between fixed costs and break-even sales.
Explanation: Margin of Safety represents the sales above the break-even point, providing a buffer against losses. It is Actual Sales minus Break-Even Sales.
10If Actual Sales are ₹500,000 and Margin of Safety is 40%, what are the Break-Even Sales?
A.₹200,000
B.₹300,000
C.₹400,000
D.₹500,000
Explanation: Margin of Safety = 40% of 500,000 = 200,000. Break-Even Sales = Actual Sales - Margin of Safety = 500,000 - 200,000 = ₹300,000.

About the III IC-89 Exam

The III IC-89 Management Accounting exam evaluates candidate understanding of key principles and practical concepts in Management Accounting. The syllabus encompasses various modules detailed below.

Assessment

100 objective multiple-choice questions in a single online paper. IC-89 is a 40-credit paper under the Insurance Institute of India (III) professional credit system.

Time Limit

2 hours

Passing Score

60% (Distinction at 75% or above)

Exam Fee

INR 600 per subject (40 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees. (Insurance Institute of India (III))

III IC-89 Exam Content Outline

6 questions

Decision Making

Practice questions focusing on decision making concepts.

4 questions

Material Variances

Practice questions focusing on material variances concepts.

4 questions

Labor Variances

Practice questions focusing on labor variances concepts.

4 questions

Profitability Ratios

Practice questions focusing on profitability ratios concepts.

4 questions

Cash Flow Statement

Practice questions focusing on cash flow statement concepts.

3 questions

Liquidity Ratios

Practice questions focusing on liquidity ratios concepts.

3 questions

Pv Ratio

Practice questions focusing on pv ratio concepts.

3 questions

Margin Of Safety

Practice questions focusing on margin of safety concepts.

3 questions

Master Budget

Practice questions focusing on master budget concepts.

3 questions

Variances

Practice questions focusing on variances concepts.

3 questions

Overhead Variances

Practice questions focusing on overhead variances concepts.

3 questions

Types Of Budgets

Practice questions focusing on types of budgets concepts.

3 questions

Transfer Pricing

Practice questions focusing on transfer pricing concepts.

2 questions

Objectives

Practice questions focusing on objectives concepts.

2 questions

Solvency Ratios

Practice questions focusing on solvency ratios concepts.

2 questions

Quick Ratio

Practice questions focusing on quick ratio concepts.

2 questions

Contribution Margin

Practice questions focusing on contribution margin concepts.

2 questions

Break Even Sales

Practice questions focusing on break even sales concepts.

2 questions

Payback Period

Practice questions focusing on payback period concepts.

2 questions

Npv

Practice questions focusing on npv concepts.

2 questions

Efficiency Ratios

Practice questions focusing on efficiency ratios concepts.

2 questions

Break Even Chart

Practice questions focusing on break even chart concepts.

2 questions

Inventory Valuation

Practice questions focusing on inventory valuation concepts.

2 questions

Coverage Ratios

Practice questions focusing on coverage ratios concepts.

2 questions

Sensitivity Analysis

Practice questions focusing on sensitivity analysis concepts.

2 questions

Limiting Factor

Practice questions focusing on limiting factor concepts.

1 questions

Scope

Practice questions focusing on scope concepts.

1 questions

Current Ratio

Practice questions focusing on current ratio concepts.

1 questions

Debt Equity

Practice questions focusing on debt equity concepts.

1 questions

Break Even Point

Practice questions focusing on break even point concepts.

1 questions

Flexible Budget

Practice questions focusing on flexible budget concepts.

1 questions

Sales Budget

Practice questions focusing on sales budget concepts.

1 questions

Material Price Variance

Practice questions focusing on material price variance concepts.

1 questions

Investment Decisions

Practice questions focusing on investment decisions concepts.

1 questions

Performance Reports

Practice questions focusing on performance reports concepts.

1 questions

Roi

Practice questions focusing on roi concepts.

1 questions

Product Costs

Practice questions focusing on product costs concepts.

1 questions

Profit Reconciliation

Practice questions focusing on profit reconciliation concepts.

1 questions

Profit Center

Practice questions focusing on profit center concepts.

1 questions

Break Even Units

Practice questions focusing on break even units concepts.

1 questions

Responsibility Accounting

Practice questions focusing on responsibility accounting concepts.

1 questions

Functional Budgets

Practice questions focusing on functional budgets concepts.

1 questions

Operating Leverage

Practice questions focusing on operating leverage concepts.

1 questions

Concepts

Practice questions focusing on concepts concepts.

1 questions

Working Capital

Practice questions focusing on working capital concepts.

1 questions

Management Reporting

Practice questions focusing on management reporting concepts.

1 questions

Zero Based Budgeting

Practice questions focusing on zero based budgeting concepts.

1 questions

Market Ratios

Practice questions focusing on market ratios concepts.

1 questions

Characteristics

Practice questions focusing on characteristics concepts.

1 questions

Cash Budget

Practice questions focusing on cash budget concepts.

1 questions

Cost Behavior

Practice questions focusing on cost behavior concepts.

1 questions

Indifference Point

Practice questions focusing on indifference point concepts.

1 questions

Shut Down Point

Practice questions focusing on shut down point concepts.

1 questions

Irr

Practice questions focusing on irr concepts.

1 questions

Process Costing

Practice questions focusing on process costing concepts.

1 questions

Normal Loss

Practice questions focusing on normal loss concepts.

1 questions

Period Costs

Practice questions focusing on period costs concepts.

1 questions

Profit Calculation

Practice questions focusing on profit calculation concepts.

1 questions

Sunk Cost

Practice questions focusing on sunk cost concepts.

1 questions

Production Budget

Practice questions focusing on production budget concepts.

1 questions

Arr

Practice questions focusing on arr concepts.

1 questions

Sales Variances

Practice questions focusing on sales variances concepts.

1 questions

Profitability Index

Practice questions focusing on profitability index concepts.

1 questions

Types Of Standards

Practice questions focusing on types of standards concepts.

1 questions

Assumptions

Practice questions focusing on assumptions concepts.

How to Pass the III IC-89 Exam

What You Need to Know

  • Passing score: 60% (Distinction at 75% or above)
  • Assessment: 100 objective multiple-choice questions in a single online paper. IC-89 is a 40-credit paper under the Insurance Institute of India (III) professional credit system.
  • Time limit: 2 hours
  • Exam fee: INR 600 per subject (40 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees.

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

III IC-89 Study Tips from Top Performers

1Study the official III IC-89 coursebook chapter by chapter before mixed mocks.
2Review the core regulations and guidelines relating to this paper.
3Sit full 100-question, 2-hour mocks aiming above 60%, with Distinction practice at 75%+.

Frequently Asked Questions

How many questions are on the III IC-89 exam?

The III objective papers, including IC-89, consist of 100 multiple-choice questions completed in 2 hours online.

What is the IC-89 passing score?

Passing marks for III online MCQ papers are 60% or above. Candidates scoring at least 75% earn Distinction in that subject.

How many credit points does IC-89 carry?

This paper (IC-89) carries 40 credit points under the Insurance Institute of India credit system.