An Uninterruptible Power Supply abbreviated as UPS is used in case of the failure of the power mains or the input power in order to ensure uninterrupted power supply.
The Ac voltage is first converted to DC and then again inverted to the AC and is fed to the system.
Thus if the UPS malfunctions then in order to check the output using multimeter we use AC voltage setting because the UPS purely supplies AC power, even if the power is supplied from its internal battery then also it inverts the DC into AC and then supply.