Financial MANAGEMENT MCQS LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question For the calculation of Operating Profit / Loss , Depreciation on fixed assets should be Correct Answer added to the Net Profit as per Profit and loss account Your Answer Deducted from the Net Profit as per Profit and loss account Multiple Choice Single Answer Question The return which the company pays on borrowed funds is termed as Correct Answer Interest Your Answer Interest Multiple Choice Single Answer Question Mr. A is given the opportunity to receive Rs. 10,000 after two years, when he can earn interest of 10% p.a. on his investment, what should be the amount which he should invest today so that he may be able to receive Rs. 10,000 after two years Correct Answer Rs. 8,264 Your Answer Rs. 8,156 Select The Blank Question A wrong decision in respect of capital expenditure proposals may disturb the entire ________ structure of the organisation Correct Answer financial Your Answer financial True/False Question
Transcript
Financial MANAGEMENT MCQS
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestionFor the calculation of Operating Profit / Loss , Depreciation on fixed assets should beCorrect Answeradded to the Net Profit as per Profit and loss accountYour AnswerDeducted from the Net Profit as per Profit and loss account
Multiple Choice Single AnswerQuestionThe return which the company pays on borrowed funds is termed asCorrect AnswerInterestYour AnswerInterest
Multiple Choice Single AnswerQuestionMr. A is given the opportunity to receive Rs. 10,000 after two years, when he can earn interest of 10% p.a. on his investment, what should be the amount which he should invest today so that he may be able to receive Rs. 10,000 after two yearsCorrect AnswerRs. 8,264Your AnswerRs. 8,156
Select The BlankQuestionA wrong decision in respect of capital expenditure proposals may disturb the entire ________ structure of the organisationCorrect AnswerfinancialYour Answerfinancial
True/FalseQuestionEarnings per share is calculated as ( Profit after tax - Preference Dividend ) / Number of Equity sharesCorrect AnswerTrueYour AnswerTrue
Multiple Choice Single AnswerQuestionAdvantage of term loan from the company's point of view isCorrect AnswerIn post tax terms, the cost of term loans is lower than the cost of equity capital or preference capitalYour AnswerThere is no liability for repayment
True/FalseQuestionProprietary ratios is the relationship between owners funds and total assetsCorrect AnswerTrueYour AnswerTrue
Multiple Choice Single AnswerQuestionIncrease in the amount in debtors results inCorrect AnswerDecrease in cashYour AnswerDecrease in cash
Multiple Choice Single AnswerQuestionThe products which are ready for sale in the market are termed asCorrect AnswerFinished goodsYour AnswerFinished goods
Multiple Choice Single AnswerQuestionThe market price per share is equal to the present value of the expected dividends discounted at the rate of return required by equity shareholders is determined underCorrect AnswerDividend /Price ApproachYour AnswerDividend /Price Approach
Multiple Choice Multiple AnswerQuestionAssuming the current ratio is 2, in which cases would the current ratio declineCorrect AnswerPurchase of fixed Assets , Borrow Money on an Interest bearing promissory noteYour Answer
Issue of new shares , Purchase of fixed Assets , Cash collected from customers , Borrow Money on an Interest bearing promissory note
Multiple Choice Multiple AnswerQuestionAdvantages of Net Present value isCorrect AnswerIt considers time value of money , It considers cash inflows from the project throughout its lifeYour AnswerIt considers time value of money , It considers cash inflows from the project throughout its life , It is easy to calculate , It is easy to understand
Match The FollowingQuestionCorrect AnswerYour AnswerCredit rating symbol for Commercial Paper of Default by Investment Information and Credit rating agencyA5BCredit rating symbol for Debentures of Inadequate safety by CRISILBBFCCredit rating symbol for Fixed Deposits of High risk by CRISILFCFACredit rating symbol for Fixed Deposits of Adequate safety by Investment Information and Credit rating agencyMAA5
Multiple Choice Multiple AnswerQuestionTypes of capital budgeting decisionsCorrect AnswerReplacements , Expansion , DiversificationYour AnswerReplacements , Expansion , Diversification , Liquidation
Select The BlankQuestionThe ________ collections may be useful for reducing the postal float as well as bank floatCorrect AnswerDecentralisedYour AnswerDebtors
Select The BlankQuestion
As per the Tandon committee, variations between the projected figures and actuals may be permitted to the extent of ________Correct Answer0.1Your Answer0.05
Select The BlankQuestionOperating Lease is also referred to as ________ leaseCorrect AnswerServiceYour AnswerFinancial
Multiple Choice Single AnswerQuestionThe formula for Current ratio isCorrect AnswerCurrent assets / Current liabilitiesYour AnswerLiquid assets / Current liabilities
Multiple Choice Multiple AnswerQuestionThe assumptions for the theories of capital structure areCorrect AnswerFirm use only long term debt capital or equity share capital to raise funds , Firm follow policy of paying 100% of its earnings by way of dividend , Operating earnings are not expected to growYour AnswerFirm use only long term debt capital or equity share capital to raise funds , Corporate Income Tax does exists , Firm follow policy of paying 100% of its earnings by way of dividend , Operating earnings are not expected to grow
Multiple Choice Single AnswerQuestionCapital turnover ratio is calculated asCorrect AnswerSales / Capital employedYour AnswerTotal assets / Owners fund
Match The FollowingQuestionCorrect AnswerYour AnswerSafety Stockbelow which the actual stock should not be allowed to fallbelow which the actual stock should not be allowed to fallABC Analysis
Vital few Trivial Manyabove which the actual stock should not exceedBill of MaterialsDetails of the necessary materials as well as quantity of each itemDetails of the necessary materials as well as quantity of each itemPerpetual Inventory SystemMaintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of timeVital few Trivial Many
True/FalseQuestionReturn on Assets is a ratio of relationship between Assets and SalesCorrect AnswerFalseYour AnswerTrue
Multiple Choice Single AnswerQuestionThe Pay Bank period is calculated asCorrect AnswerCash outlay / Annual cash inflowYour AnswerExternal liabilities / Shareholders funds
Multiple Choice Multiple AnswerQuestionDisadvantages of factoring areCorrect AnswerThe financial burden on the company increases , It may be considered to be a symptom of financial weakness on the part of the selling company , In Indian circumstances, factoring is mainly with-recourse factoring. The risk of non-payment on the part of customer is borne by the selling firm. This restricts its popularityYour AnswerThe financial burden on the company increases , It may be considered to be a symptom of financial weakness on the part of the selling company , In Indian circumstances, factoring is mainly with-recourse factoring. The risk of non-payment on the part of customer is borne by the selling firm. This restricts its popularity
Select The BlankQuestionIn ABC analysis C class consist of ________.Correct Answera very large number of items which are less importantYour Answerthat quantity which is fixed in such a way that the total variable cost of managing the inventory can be minimised
True/False
QuestionIn Regular Stock Dividend policy, the company may pay dividend in the form of bonus shares instead of cashCorrect AnswerTrueYour AnswerTrue
Select The BlankQuestionFactoring indicates the relationship between ________ and a business organisationCorrect AnswerFinancial institutionsYour AnswerFinancial institutions
Multiple Choice Multiple AnswerQuestionImportance of capital budgeting decisionsCorrect AnswerThey represent the true earning assets of the firm , they are irreversible , they require assessment of future events which are uncertainYour AnswerThey represent the true earning assets of the firm , it helps in preparation of financial statements , they require assessment of future events which are uncertain
Multiple Choice Single AnswerQuestionFixed Income bearing securities for the computation of Capital gearing ratio consists ofCorrect AnswerDebenturesYour AnswerDebentures
Multiple Choice Multiple AnswerQuestionThe collection programme of the firm consists ofCorrect AnswerMaintaining the state of receivables , Dispatch of letters to customers whose due date is approaching , Telegraphic and Telephonic advice to customers around the due dateYour AnswerMaintaining the state of receivables , Dispatch of letters to customers whose due date is approaching , Telegraphic and Telephonic advice to customers around the due date , Maintaining record of bills payable
Multiple Choice Multiple AnswerQuestion
Dividend / Price Approach to compute cost of equity shares is objected on the following groundsCorrect AnswerThis presupposes that an investor looks forward only to receive dividend on equity shares which may not be correct , It assumes that the company will not earn on its retained earnings which is a wrong assumptionYour AnswerThis presupposes that an investor looks forward only to receive dividend on equity shares which may not be correct , It assumes that the company will not earn on its retained earnings which is a wrong assumption , It wrongly assumes that earnings per share will remain constant in future , All the earnings may not be distributed among the shareholders by way of dividend
Select The BlankQuestionThe operating profit earned by the company is in the form of contribution duly reduced by the ________Correct AnswerFixed operating costYour AnswerVariable operating cost
Multiple Choice Multiple AnswerQuestionThe following techniques can be used to delay cash paymentsCorrect AnswerPayments can be made from a bank which is distant from the bank of the company to which payment is to be made , Attempts should be made by the company to get the maximum credit for the goods or service supplied , Avoid early paymentsYour AnswerPayments can be made from a bank which is distant from the bank of the company to which payment is to be made , Insist upon payment in the form of demand draft, letters of credit , Attempts should be made by the company to get the maximum credit for the goods or service supplied , Avoid early payments
Multiple Choice Single AnswerQuestionNet Working Capital meansCorrect AnswerCurrent assets less Current liabilitiesYour AnswerCurrent assets less Current liabilities
True/FalseQuestionWages/salaries is considered under Operating cashinflowCorrect AnswerFalseYour Answer
True
Select The BlankQuestionSometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securitiesCorrect AnswerFundYour AnswerInvestment
Select The BlankQuestionIf a deposit is repaid after 6 months from the date of deposit but before its expiry, the rate of interest on such deposit shall be reduced by ________ from the rate which the company would have paid had the deposit been accepted for the period for which such deposit had runCorrect Answer0.01Your Answer0.01
True/FalseQuestionThe requirement of Fixed Working Capital is unaffected due to the changes in the level of activityCorrect AnswerTrueYour AnswerTrue
True/FalseQuestionInternal rate of return can be computed even in the absence of the knowledge about the firm's cost of capitalCorrect AnswerTrueYour AnswerFalse
Multiple Choice Multiple AnswerQuestionBenefits of cash flow informationCorrect AnswerIt enhances the comparability of the reporting of operating performance by different enterprise , Historical cash flow information is often used as an indicator of the amount , timing and certainty of future cash flows , It enables the users to evaluate the changes in net assets of an enterpriseYour AnswerIt enhances the comparability of the reporting of operating performance by different enterprise , Historical cash flow information is often used
as an indicator of the amount , timing and certainty of future cash flows , It enables the users to evaluate the changes in net assets of an enterprise , information is useful to construct financial statements
Multiple Choice Single AnswerQuestionThe real owners of the company areCorrect AnswerEquity shareholdersYour AnswerPreference shareholders
True/FalseQuestionThe lessor is the nominal owner of the asset as the possession and economic use of the asset rests with the lesseeCorrect AnswerTrueYour AnswerTrue
Select The BlankQuestionThe mathematical expression of ________ is Normal Usage * Lead time for emergency purchasesCorrect AnswerDanger levelYour AnswerRe-order level
Select The BlankQuestionTurnover ratios measures how efficiently the ________ are employed by the firmCorrect AnswerAssetsYour AnswerAssets
Economic order quantity is based on the assumption that the demand for the material concerned is uniform throughout a yearCorrect AnswerTrueYour AnswerTrue
True/FalseQuestionInventory is the intermediate stage between purchase of raw materials and consumption of raw materialsCorrect AnswerTrueYour AnswerTrue
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Financial Management - 4
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestionThe limitations of ratio analysis areCorrect AnswerRatios are based on historical financial statements rather than future happenings , Ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business , Ratio analysis takes in to consideration only monetary transactionsYour AnswerRatios are based on historical financial statements rather than future happenings , Ratio analysis provides data for inter-firm comparison , Ratio analysis takes in to consideration only monetary transactions
True/FalseQuestionCarrying cost of inventory includes cost incurred for preparation of purchase requisitionCorrect AnswerFalseYour AnswerTrue
True/FalseQuestionThe excessive issue of equity shares may result in over-capitalisation to be realized in future
Correct AnswerTrueYour AnswerTrue
Multiple Choice Single AnswerQuestionNet revenue is arrived atCorrect AnswerSales revenue less costYour AnswerSales revenue less tax liability
Match The FollowingQuestionCorrect AnswerYour AnswerTerm loanrepresents a source of debt finance which is generally repayable in more than one year but less than ten yearsunsecured borrowings for the companyLesseeNot able to claim depreciation on assetResidue left behind from earnings available to equity shareholders after the payment of annual dividendHirerClaims the depreciation on the assetinstruments to raise long term debt capitalRetained earningsResidue left behind from earnings available to equity shareholders after the payment of annual dividendrepresents a source of debt finance which is generally repayable in more than one year but less than ten years
Multiple Choice Single AnswerQuestionThe ratio which indicates the credit policy followed by a business firm is known asCorrect AnswerDebtors turnover ratioYour AnswerCreditors turnover ratio
True/FalseQuestionDebtors turnover ratio is normally supported by the calculations of average collection periodCorrect AnswerTrueYour AnswerFalse
True/FalseQuestionThe mostly used methods of short term forcasting is the Receipt and Payment methodCorrect AnswerTrueYour AnswerTrue
Match The FollowingQuestionCorrect AnswerYour AnswerFinancial ratiosRatios disclosing the financial position or solvency of the firmRatios which indicates the percentage of return on the total capital employed in the businessProfitability ratioRatios which reflect the final results of business operationsRatios measuring the efficiency with which the assets are employed by a firmTurnover ratiosRatios measuring the efficiency with which the assets are employed by a firmRatios which reflect the final results of business operationsOverall profitability ratioRatios which indicates the percentage of return on the total capital employed in the businessThe ratios indicate the long term financial prospects of the company
Multiple Choice Single AnswerQuestionThe rate of return which computes the average annual yield on the net investment in the project is known asCorrect AnswerAccounting rate of returnYour AnswerReturn on investment
Multiple Choice Single AnswerQuestionThe hidden cost of capital which is not incurred directly is referred to asCorrect AnswerImplicit costYour AnswerExplicit cost
Multiple Choice Single AnswerQuestionFor the calculation of Operating Profit / Loss , Preliminary expenses written off should be
Correct Answeradded to the Net Profit as per Profit and loss accountYour AnswerDeducted from the Net Profit as per Profit and loss account
Select The BlankQuestionCost management is the function of a ________.Correct AnswerTreasurerYour AnswerFinance manager
Multiple Choice Multiple AnswerQuestionAdvantages of Debentures from company's point of view areCorrect AnswerThe specific cost of debt capital represented by debentures is lower than the cost of preference or equity capital , Debenture financing does not result in dilution of controlYour AnswerThe specific cost of debt capital represented by debentures is lower than the cost of preference or equity capital , Debenture financing does not result in dilution of control , Debenture prices are vulnerable to increase in interest rates
Select The BlankQuestionIf the project is accepted, Internal Rate of return resulting from the same should be ________ than cost of capitalCorrect AnswermoreYour Answermore
Select The BlankQuestionFor accounting and tax purposes of hire purchase agreement, ________ is treated as revenue expenditure and is considered to be a tax deductible expenditureCorrect AnswerOnly interestYour AnswerLease rental
True/FalseQuestionFollowing lenient dividend policy without bothering much about building up the reserves may be the cause for undercapitalisationCorrect AnswerFalseYour Answer
True
Select The BlankQuestionThe following data are extracted from the published accounts of a company : Sales Rs. 38,00,000/-, Net Profit after tax Rs. 2,50,000/-, Equity capital Rs. 10,00,000/-,General Reserve Rs. 6,50,000/-, Rs. Long term debt Rs. 7,00,000/-, Creditors Rs. 6,90,000/-, Bank credit/short term loan Rs. 2,30,000/-, Fixed Assets Rs. 17,50,000/-, Inventories Rs. 7,25,000/-, Other Current assets Rs. 5,25,000/-. The Inventory Turnover ratio is ________Correct Answer5.24Your Answer8.85
Multiple Choice Multiple AnswerQuestionIf Profit maximization is accepted as the only goal of finance function, it is criticised on the following groundsCorrect AnswerIgnores risk factor , Does not consider social obligation , Ignores quality aspect of benefits associated with a financial course of actionYour AnswerIgnores risk factor , Does not consider social obligation , Ignores quality aspect of benefits associated with a financial course of action
Multiple Choice Multiple AnswerQuestionThe depreciation is being charged for the following assetsCorrect AnswerPlant and Machinery , BuildingYour AnswerPlant and Machinery , Building , Stock
Multiple Choice Multiple AnswerQuestionAdvantages of the issue of Bonus shares in the form of Dividend to the company areCorrect AnswerRemedy for undercapitalisation , Increase marketability of shares , Increase credit standing of the company in the eyes of the lending financial institutionsYour AnswerRemedy for overcapitalisation , Remedy for undercapitalisation , Increase marketability of shares
True/FalseQuestionA partnership is an incorporated association of individuals.Correct AnswerFalse
Your AnswerTrue
True/FalseQuestionWealth maximization goal is only an extension of Profit maximization goal of the organisationCorrect AnswerTrueYour AnswerTrue
Multiple Choice Single AnswerQuestionFrom the following data, work out the Economic order quantity : Annual Demand : 5000 units, Ordering cost Rs. 60 per order, Price per unit Rs. 100, Inventory carrying cost is 15% on average inventoryCorrect Answer200 unitsYour Answer250 units
Multiple Choice Multiple AnswerQuestionThe factor may provide the following services to the clientCorrect AnswerIt may undertake the credit analysis of the customers of the client , It will undertake the various book-keeping and accounting activities in relation to the receivables management , It undertakes the responsibility of following up with the customers for the purpose of making the collection from the customerYour AnswerIt may undertake the credit analysis of the customers of the client , It will undertake the various book-keeping and accounting activities in relation to the receivables management , It undertakes the responsibility of following up with the customers for the purpose of making the collection from the customer
Multiple Choice Multiple AnswerQuestionAdvantages of Preference shares from shareholders point of viewCorrect AnswerFor a corporate investor, preference dividend income , It earns a stable dividend rateYour AnswerFor a corporate investor, preference dividend income , It earns a stable dividend rate , Enjoys controlling power over the firm
True/FalseQuestionWith limited funds, the company must obtain the optimum combination of acceptable investment proposals
Correct AnswerTrueYour AnswerTrue
Select The BlankQuestion________ leverage also acts as a guideline in setting maximum limit upto which the company should use the debt capitalCorrect AnswerFinancialYour AnswerOperating
Multiple Choice Single AnswerQuestionInterest coverage ratio is useful in indicating the symptom ofCorrect AnswerInability to pay interestYour AnswerInability to pay dues to financial institutions
True/FalseQuestionFinancial lease is also referred to as Capital leaseCorrect AnswerTrueYour AnswerTrue
Multiple Choice Single AnswerQuestionTechnical terminology used to invest in the current assets beingCorrect AnswerWorking Capital ManagementYour AnswerWorking Capital Management
Multiple Choice Multiple AnswerQuestionThe advantages of stable Dividend policy areCorrect AnswerCredit standing of the company in the market increases , Share price of the company increases , Enjoys Confidence of the shareholdersYour AnswerCredit standing of the company in the market increases , Share price of the company increases , Enjoys Confidence of the shareholders
Multiple Choice Single AnswerQuestionDenomination of the equity shares in the public issue or rights issue can be decided by
Correct Answerthe companyYour AnswerCompany law Board
Multiple Choice Multiple AnswerQuestionLimitations of credit rating areCorrect AnswerCredit rating is based upon the evaluation made by the agencies which may vary depending upon the experience, knowledge and individual opinion of the rators which may be biased in some cases , Credit rating is primarily based upon the past performance whereas the future prospects should be given more importance while deciding the credit rating , Multiplicity of the rating agencies can be considered to be the limitation of the credit ratingYour AnswerCredit rating is based upon the evaluation made by the agencies which may vary depending upon the experience, knowledge and individual opinion of the rators which may be biased in some cases , Credit rating is primarily based upon the past performance whereas the future prospects should be given more importance while deciding the credit rating , Multiplicity of the rating agencies can be considered to be the limitation of the credit rating
Multiple Choice Single AnswerQuestionThe amount of cheques deposited by a Bank awaiting clearance is calledCorrect AnswerCollection floatYour AnswerDeposit float
Select The BlankQuestion________ is an example of Intangible assetCorrect AnswerGoodwillYour AnswerGoodwill
Multiple Choice Multiple AnswerQuestionThe classification of return on Investment areCorrect AnswerReturn on Asset , Return on Capital EmployedYour AnswerReturn on Asset , Capital Employed ratio , Debt Equity ratio
Multiple Choice Multiple AnswerQuestionThe classification of ratios under miscellaneous group includes
Correct AnswerEarnings per share , Dividend Payment ratioYour AnswerEarnings per share , Dividend Payment ratio , Return on Asset
Multiple Choice Multiple AnswerQuestionUndue decrease in Gross Profit ratio may indicateCorrect AnswerNon-consideration of sales invoices , Under-valuation of closing stock , Improper utilisation of infrastructural facilitiesYour AnswerNon-consideration of sales invoices , Under-valuation of closing stock , Improper utilisation of infrastructural facilities
Select The BlankQuestion________ implies arithmetical relationship between two related figuresCorrect AnswerRatioYour AnswerRatio
True/FalseQuestionIf the cash is held to take advantage of profit making opportunities arising out of changes in the value of securities, the cash holding is called Precautionary motiveCorrect AnswerFalseYour AnswerTrue
Multiple Choice Single AnswerQuestionCalculate the Gross Profit Ratio from the following figures : Sales Rs. 1,00,000/-, Purchases Rs. 60,000/-, Sales Return Rs. 10,000/-, Opening stock Rs. 20,000/-, Purchases Return Rs. 15,000/-, Closing Stock Rs. 5,000/-Correct Answer0.3333Your Answer0.3234
Select The BlankQuestionShareholders of a joint stock company appoint their representative in the form of ________ to carry on the day-to-day affairs of the companyCorrect AnswerDirectorsYour AnswerAccountant
Select The BlankQuestionunder no circumstances , ________ term requirement of funds should be met out of short term sources of fundsCorrect AnswerlongYour Answerlong
Select The BlankQuestionProprietory ratio indicates the relationship between the owner's fund and ________Correct AnswerTotal assetsYour AnswerProfits
Select The BlankQuestion________ is one of the current assets that takes the longest time to get converted into cashCorrect AnswerStockYour AnswerDebtors
Multiple Choice Single AnswerQuestionCurrent Assets Turnover ratio is calculated asCorrect AnswerNet Sales / Current AssetsYour AnswerLiquid assets / Liquid liabilities
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Labels: Financial Management
Financial Management - 3
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestionThe effect of Purchase of building against a long term loan payable on funds ( cash concept ) isCorrect AnswerNo change in cash
Your AnswerNo change in cash
True/FalseQuestionThe cost of the factor is slightly higher than the interest which the client would have paid had he borrowed the funds from the BankCorrect AnswerTrueYour AnswerFalse
Select The BlankQuestionThe objective of the management in the investment decisions is in the form of ________Correct Answermaximisation of the wealth of the shareholdersYour Answermaximisation of the wealth of the shareholders
Match The FollowingQuestionCorrect AnswerYour AnswerRecurring duties of finance executiveRaising of fundsRaising of fundsObjective of finance functionProfit maximizationProfit maximizationTreasurerCost managementCost managementFinance ControllerInternal AuditingInternal Auditing
Multiple Choice Single AnswerQuestionRequirement of working capital is low is case ofCorrect AnswerInfrastructure oriented projectsYour AnswerInfrastructure oriented projects
True/FalseQuestionThe term Current Assets and Liquid assets have synonymous meaningsCorrect AnswerFalseYour Answer
False
Multiple Choice Multiple AnswerQuestionFactors determining the required cash balance areCorrect AnswerShortage of cash cost , Surplus cash balance costs , Procurement and Management costYour AnswerShortage of cash cost , Procurement and Management cost , Fixed assets cost
Select The BlankQuestionIf the size of the issue is more than Rs. 100 crores, the issue is required to be rated by at least ________ credit rating agenciesCorrect AnswertwoYour Answertwo
True/FalseQuestionAn ideal investor makes an comparison between the current market price and future Earning per share as the market value of shares depends upon the future Earnings per shareCorrect AnswerTrueYour AnswerTrue
True/FalseQuestionAccording to Net Income Approach, the valuation of the firm and its cost of capital is independent of its capital structureCorrect AnswerFalseYour AnswerFalse
Multiple Choice Multiple AnswerQuestionThe Proprietary concern is better than the Partnership concern on the following pointsCorrect AnswerMinimum Government regulations , Where the business is smallYour AnswerMinimum Government regulations , Where the business is small
Multiple Choice Multiple AnswerQuestionLimitations of Average collection period
Correct AnswerAverage Collection period assumes that the credit sales are evenly spread throughout the year. In practical circumstances, credit sales are not evenly spread throughout the year , The amount of credit sales made by company or the normal credit period offered by the company are not available in the published financial statementsYour AnswerAverage Collection period assumes that the credit sales are evenly spread throughout the year. In practical circumstances, credit sales are not evenly spread throughout the year , The amount of credit sales made by company or the normal credit period offered by the company are not available in the published financial statements , Management attitude if conservative, then credit will not be extended
Multiple Choice Single AnswerQuestionThe value created by the use of resources is more than the total of the input resources is referred to asCorrect AnswerProfitYour AnswerProfit
Multiple Choice Single AnswerQuestionComposite cost is calculated asCorrect AnswerTotal weighted cost / Total weightsYour AnswerNet Profit / Total shareholders funds
True/FalseQuestionInternal rate of return considers time value of moneyCorrect AnswerTrueYour AnswerTrue
True/FalseQuestionRatios can be expressed only in percentageCorrect AnswerFalseYour AnswerTrue
Select The BlankQuestionThe situation of watered capital may arise due to ________Correct AnswerCompany pays higher price to the vendors of the assets transferred
Your AnswerCompany pays higher price to the vendors of the assets transferred
Select The BlankQuestion________ in assets involves inflow of fundsCorrect AnswerDecreaseYour AnswerIncrease
Multiple Choice Single AnswerQuestionThe main function of finance under the traditional approach comprises ofCorrect AnswerProcurement of fundsYour AnswerWorking Capital management
Select The BlankQuestionThe introduction of debt capital in the capital structure increases the earnings per share of ________Correct AnswerEquity shareholdersYour AnswerPreference shareholders
Multiple Choice Single AnswerQuestionThe cost which remains constant irrespective of changes in the sales revenue is termed asCorrect AnswerFixed costYour AnswerFixed cost
Multiple Choice Multiple AnswerQuestionThe sources of cash areCorrect AnswerCash from operations , sale of machinery , Issue of new sharesYour AnswerPurchase of fixed assets , Cash from operations , Issue of new shares
Multiple Choice Single AnswerQuestionFinancing consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the business' is defined byCorrect AnswerBonneville and Dewey
Your AnswerBonneville and Dewey
Multiple Choice Single AnswerQuestionThe financing of the working capital requirement which arises during the course of normal business operations is termed asCorrect AnswerSpontaneous sourcesYour AnswerIntercorporate deposits
Multiple Choice Single AnswerQuestionThe reduction in the market value of the shares may cause due toCorrect AnswerOvercapitalisationYour AnswerUndercapitalisation
Multiple Choice Multiple AnswerQuestionThe recommendations of the Chhore committee includedCorrect Answerincreasing role of short term loans and bill finance and curbing the role of cash credit limits , the bank should appraise and fix separate limits for normal non-peak levels and also peak levelsYour Answerincreasing role of short term loans and bill finance and curbing the role of cash credit limits , the bank should appraise and fix separate limits for normal non-peak levels and also peak levels
Select The BlankQuestionIn ABC analysis A class consist of ________.Correct Answeronly a small percentage of total number of items handled but are most important in natureYour Answeronly a small percentage of total number of items handled but are most important in nature
Select The BlankQuestionFinancial Statement is useful to ________ in order to enable to decide whether to retain the investment in the companyCorrect AnswerShareholdersYour AnswerShareholders
Multiple Choice Multiple Answer
QuestionUtility of cash flow analysisCorrect AnswerHelps in efficient cash management , helps in internal financial management , Discloses the movements of cashYour AnswerHelps in efficient cash management , helps in internal financial management , it cannot replace fund flow statement
Select The BlankQuestionThe economical use of the asset is permitted by the lessor on the payment of periodical amount which is in the form of ________.Correct AnswerLease rentYour AnswerInterest
Multiple Choice Single AnswerQuestionCash from operation is equal toCorrect AnswerNet Profit plus increase in outstanding expensesYour AnswerNet Profit plus increase in debtors
True/FalseQuestionIn calculating funds from operations non-business expenses like dividends paid etc. as well as non cash expenses like depreciation etc. are added back in the net profits shown by the Profit & Loss AccountCorrect AnswerTrueYour AnswerTrue
Multiple Choice Multiple AnswerQuestionAdvantages of factoringCorrect AnswerFactoring is the way in which the company can finance its requirement of Working capital in respect of receivables , The company can take advantage of the expertise of the factor in various fields , With the help of factoring the company can be relieved of administrative responsibilitiesYour AnswerFactoring is the way in which the company can finance its requirement of Working capital in respect of receivables , The company can take advantage of the expertise of the factor in various fields , With the help of factoring the company can be relieved of administrative responsibilities
Multiple Choice Single AnswerQuestionThe deposit receipt should containCorrect AnswerAmount of depositYour AnswerAmount of deposit
True/FalseQuestionFinancial statements do not provide information about sources of raising funds as well as the applications of these fundsCorrect AnswerTrueYour AnswerFalse
Multiple Choice Single AnswerQuestionOvercapitalisation isCorrect AnswerExistence of excess capital as compared to the level of activity and requirementsYour AnswerExistence of excess capital as compared to the level of activity and requirements
Select The BlankQuestionThe mathematical expression of ________ is ( Minimum level + Maximum level ) / 2Correct AnswerAverage levelYour AnswerAverage level
Match The FollowingQuestionCorrect AnswerYour AnswerFinancial leverageEarning before interest and tax / ( Earning before interest and tax - Interest )Earning before interest and tax / ( Earning before interest and tax - Interest )Earnings per share(Profit after tax - Preference dividend) / Number of Equity shares(Profit after tax - Preference dividend) / Number of Equity sharesPrice earning ratioMarket Price per share / Earnings per shareMarket Price per share / Earnings per shareOperating leverage
Contribution / Earnings before interest and tax( Sales - Variable cost ) / ( Earning before interest and tax - Interest )
Select The BlankQuestionDebt Service coverage ratio is calculated as ________Correct Answer(Net Profit after taxes + Depreciation + Interest on term loan) / (Interest + Instalment)Your Answer(Net Profit after taxes + Depreciation + Interest on term loan) / (Interest + Instalment)
Select The BlankQuestionThe dealing with the financial matters of the government is termed as ________ field of financeCorrect AnswerPublicYour AnswerPublic
Multiple Choice Multiple AnswerQuestionExternal sources of funds areCorrect AnswerFunds from long term loans , Sale of fixed assetsYour AnswerFunds from operations , Funds from long term loans , Sale of fixed assets
Multiple Choice Single AnswerQuestionThe ratio which indicate the long term financial prospects of the company areCorrect AnswerSolvency ratiosYour AnswerSolvency ratios
True/FalseQuestion
A high degree of operating leverage means that the component of fixed cost is too high in the overall cost structureCorrect AnswerTrueYour AnswerTrue
Multiple Choice Multiple AnswerQuestionUnder the Financial Analysis of the company done by Credit rating and Information Services of India Ltd. the following points are coveredCorrect AnswerAccounting policies followed by the company , Adequacy of cash flows for fixed capitalYour AnswerAccounting policies followed by the company , Adequacy of cash flows for fixed capital
Multiple Choice Single AnswerQuestionThe traditional approach to financial management refers only to the procurement of funds byCorrect AnswerCorporate entityYour AnswerCorporate entity
True/FalseQuestionThe capital expenditure has to be planned properly taking into consideration the present and future needs of the businessCorrect AnswerTrueYour AnswerTrue
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Friday, February 8, 2008Financial Management - 2
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestionThe technique where the interest is compounded and becomes a part of initial principal at the end of compounding period is termed asCorrect Answer
CompoundingYour AnswerCompounding
True/FalseQuestionA good Budget manual promotes standardization and simplification of budgetary proceduresCorrect AnswerTrueYour AnswerTrue
Multiple Choice Single AnswerQuestionThe Investment decisions are mainly concerned withCorrect AnswerApplication of fundsYour AnswerCosting of funds
Select The BlankQuestionAs per the Tandon Committee, the norms suggested for consumption of raw materials should be in ________Correct AnswermonthsYour Answermonths
Multiple Choice Multiple AnswerQuestionInternal sources of cash areCorrect AnswerDepreciation , Amortization of intangible assetsYour AnswerIssue of new shares , Amortization of intangible assets
Multiple Choice Multiple AnswerQuestionThe collection programme of the firm consists ofCorrect AnswerMaintaining the state of receivables , Dispatch of letters to customers whose due date is approaching , Telegraphic and Telephonic advice to customers around the due dateYour AnswerMaintaining the state of receivables , Dispatch of letters to customers whose due date is approaching , Maintaining record of bills payable
True/FalseQuestion
Ratio should be computed on the basis of inter-related figures which have a cause and effect relationshipCorrect AnswerTrueYour AnswerTrue
True/FalseQuestionA partnership is an incorporated association of individuals.Correct AnswerFalseYour AnswerTrue
Match The FollowingQuestionCorrect AnswerYour AnswerAdvantage of Net present valueconsiders cash inflows from the project throughout its lifeuses profits after depreciation and taxes and not the cash inflows for evaluating the projectsDisadvantage of Accounting rate of returnuses profits after depreciation and taxes and not the cash inflows for evaluating the projectsignores time value of moneyDisadvantage of Pay back periodignores time value of moneycan be computed even in the absence of the knowledge about the firm's cost of capitalAdvantage of Discounted Pay back periodconsiders time value of moneyconsiders cash inflows from the project throughout its life
Multiple Choice Multiple AnswerQuestionThe Proprietary concern is better than the Partnership concern on the following pointsCorrect AnswerMinimum Government regulations , Where the business is smallYour AnswerMinimum Government regulations , Where the business is small
True/FalseQuestionUndercapitalisation indicates sound financial position and efficient management of the companyCorrect AnswerTrueYour AnswerFalse
Multiple Choice Single AnswerQuestionThe accounting report which summarises the revenues and expenses for a specified accounting period is referred to asCorrect AnswerProfit and loss AccountYour AnswerBalance Sheet
Select The BlankQuestion________ and return always go hand in handCorrect AnswerRiskYour AnswerRisk
Select The BlankQuestionCost management is the function of a ________.Correct AnswerTreasurerYour AnswerFinance manager
Multiple Choice Single AnswerQuestionIncrease in the amount in debtors results inCorrect AnswerDecrease in cashYour AnswerIncrease in cash
Select The BlankQuestionFactor can purchase the debts of the client making the immediate payment of the same, this reduces the strain on the ________ requirements of the clientCorrect AnswerWorking CapitalYour AnswerWorking Capital
Select The BlankQuestion________ implies arithmetical relationship between two related figuresCorrect AnswerRatioYour AnswerRatio
True/FalseQuestionIn funds flow statement, net decrease in working capital is shown on sources sideCorrect AnswerTrueYour AnswerFalse
Match The FollowingQuestionCorrect AnswerYour AnswerFinancial leverageEarning before interest and tax / ( Earning before interest and tax - Interest )( Net Profit after tax - Preference dividend ) / Shareholders fundsEarnings per share(Profit after tax - Preference dividend) / Number of Equity sharesEarning before interest and tax / ( Earning before interest and tax - Interest )Price earning ratioMarket Price per share / Earnings per share( Sales - Variable cost ) / ( Earning before interest and tax - Interest )Operating leverageContribution / Earnings before interest and taxContribution / Earnings before interest and tax
Multiple Choice Single AnswerQuestionThe method of subtracting present value of cash outflows from present value of cash inflows is known asCorrect AnswerNet present valueYour AnswerPay Back period
Multiple Choice Multiple AnswerQuestionAdvantages of Debentures from company's point of view areCorrect AnswerThe specific cost of debt capital represented by debentures is lower than the cost of preference or equity capital , Debenture financing does not result in dilution of controlYour AnswerThe specific cost of debt capital represented by debentures is lower than the cost of preference or equity capital , Carry voting rights , Debenture prices are vulnerable to increase in interest rates
Multiple Choice Multiple AnswerQuestion
The sources of cash areCorrect AnswerCash from operations , sale of machinery , Issue of new sharesYour AnswerCash from operations , sale of machinery , Issue of new shares
Multiple Choice Single AnswerQuestionRequirement of working capital is low is case ofCorrect AnswerInfrastructure oriented projectsYour AnswerTrading organisation
Select The BlankQuestionCarriage Inward is normally debited to ________Correct AnswerManufacturing AccountYour AnswerProfit and Loss Account
Multiple Choice Single AnswerQuestionReceipt of loans/borrowings appear in the cash budget under the headCorrect AnswerNon-operating cash inflowYour AnswerOperating Cash Inflow
Select The BlankQuestionIn ABC analysis B class consist of ________.Correct Answerrelatively less important itemsYour Answerthat quantity which is fixed in such a way that the total variable cost of managing the inventory can be minimised
True/FalseQuestionIn narrow sense funds means only cash resources of the businessCorrect AnswerTrue
Your AnswerTrue
True/FalseQuestionCurrent ratio and Acid test ratio are categorised under liquidity groupCorrect AnswerTrueYour AnswerTrue
Multiple Choice Single AnswerQuestionAccording to the Irrelevance approach of dividend policy, the value of the companyCorrect Answerremains unaffected by the dividend policy of the companyYour Answerwill increase if dividend payout is on the higher side
Multiple Choice Single AnswerQuestionThe effect of Purchase of machinery by issue of debentures on the funds flow is that there will beCorrect AnswerNo effect on the funds flowYour AnswerIncrease in application of funds
Select The BlankQuestionAs per the II method suggested by the Tandon committee, the borrower should finance ________ of current assets out of long term funds and the banks provide the remaining financeCorrect Answer0.25Your Answer0.25
Multiple Choice Multiple AnswerQuestionFund based lending of banks includeCorrect AnswerOverdraft , Bills PurchasedYour AnswerOverdraft
Select The BlankQuestionProprietory ratio indicates the relationship between the owner's fund and ________Correct Answer
Total assetsYour AnswerExternal liabilities
True/FalseQuestionInventory is the intermediate stage between purchase of raw materials and consumption of raw materialsCorrect AnswerTrueYour AnswerTrue
Multiple Choice Multiple AnswerQuestionThe recommendations of the Tandon committee includedCorrect Answerthe norms for inventory and accounts receivables for as many as 15 industries excluding heavy engineering industry , that the amount of bank credit should not be decided by the capacity of the borrower to offer security to the banks but it should be decided in such a way to supplement the borrower's resources in carrying a reasonable level of current assets in relation to his production requirementYour Answerthe norms for inventory and accounts receivables for as many as 15 industries excluding heavy engineering industry , all cash credit accounts with banks should be bifurcated in two categories
Multiple Choice Multiple AnswerQuestionIf Profit maximization is accepted as the only goal of finance function, it is criticised on the following groundsCorrect AnswerIgnores risk factor , Does not consider social obligation , Ignores quality aspect of benefits associated with a financial course of actionYour AnswerDoes take into consideration time value of money , Ignores risk factor , Does not consider social obligation
True/FalseQuestionPrivate limited company can commence business immediately on incorporationCorrect AnswerTrueYour AnswerFalse
True/FalseQuestion
If the customer fails to pay the amount due from him the legal action should be initiated against the customer after the limitation period is overCorrect AnswerFalseYour AnswerTrue
Multiple Choice Single AnswerQuestionThe cost which is attached with the source of capital apparently is termed asCorrect AnswerExplicit costYour AnswerImplicit cost
Select The BlankQuestionWhen a company issues bonus shares ________ of the company get reducedCorrect AnswerReservesYour AnswerSharecapital
Select The BlankQuestionInflow of funds may not necessarily result in ________Correct AnswerInflow of cashYour Answerstability of funds
Multiple Choice Multiple AnswerQuestionThe Economic Order Quantity model is based on the assumption ofCorrect AnswerPlacing and receiving orders is without any delay , Ordering costs and carrying costs associated with the orders are variable in nature and they behave exactly opposite to each other , The demand for the material concerned is uniform throughout the yearYour AnswerPlacing and receiving orders is without any delay , The demand for the material concerned is uniform throughout the year
Multiple Choice Multiple AnswerQuestionAdvantages of Internal rate of return isCorrect AnswerIt considers time value of money , It considers cash inflows from the project throughout its life , It can be computed even in the absence of the knowledge about the firm's cost of capital
Your AnswerIt considers cash inflows from the project throughout its life , It can be computed even in the absence of the knowledge about the firm's cost of capital , It is easy to use
Multiple Choice Multiple AnswerQuestionShortcomings of Debentures from company's point of viewCorrect AnswerThe debenture interest and capital repayment are obligatory payments , Debenture financing enhances the financial risk associated with the firmYour AnswerThe debenture interest and capital repayment are obligatory payments , Debenture financing enhances the financial risk associated with the firm , They have lowest priority in the event of liquidation , Controlling the affairs of the company
Multiple Choice Single AnswerQuestionThe highest form of maintaining liquidity of cash isCorrect AnswerCash balance in the current accountYour AnswerTrading in capital market
Multiple Choice Single AnswerQuestionOvercapitalisation isCorrect AnswerExistence of excess capital as compared to the level of activity and requirementsYour AnswerExistence of excess capital as compared to the level of activity and requirements
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Labels: Financial Management
Friday, January 25, 2008Financial Management - 1
Multiple Choice Multiple AnswerQuestion The causes of undercapitalisation areCorrect Answer Future earnings may be underestimated , Company following too conservative policy for paying the dividendsYour Answer Company following too conservative policy for paying the dividends , Future earnings may be underestimated
Select The BlankQuestion Subscription list of a public issue of shares shall be kept open for minimum ________ working days
Correct Answer 3Your Answer 3
Select The BlankQuestion ________ in liabilities involves outflow of fundsCorrect Answer DecreaseYour Answer Decrease
Multiple Choice Single AnswerQuestion The Investment decisions are mainly concerned withCorrect Answer Application of fundsYour Answer Application of funds
Multiple Choice Multiple AnswerQuestion The following techniques can be used to delay cash paymentsCorrect Answer Payments can be made from a bank which is distant from the bank of the company to which payment is to be made , Attempts should be made by the company to get the maximum credit for the goods or service supplied , Avoid early paymentsYour Answer Payments can be made from a bank which is distant from the bank of the company to which payment is to be made , Attempts should be made by the company to get the maximum credit for the goods or service supplied , Avoid early payments
Select The BlankQuestion Till the sales revenue reaches the break even point, the company ________Correct Answer incurs the lossesYour Answer incurs the losses
Select The BlankQuestion Preparation of Financial plan at the time of company promotion is ________ duty of the finance executiveCorrect Answer Non-recurringYour Answer Non-recurring
Multiple Choice Single AnswerQuestion The ratio which indicates the extent to which the Owners' funds are sunk in different kinds of assets is termed asCorrect Answer Proprietory ratioYour Answer Proprietory ratio
Select The BlankQuestion ________ is the summary of cash book or Receipts and Payments StatementCorrect Answer Cash flow statementYour Answer Cash flow statement
True/FalseQuestion Retained earnings or ploughed back profits is one of the best source of raising long term funds for the companyCorrect Answer True
Your Answer True
True/FalseQuestion When a company issues bonus shares, reserves of the company get reduced and share capital of the company increasesCorrect Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Top management who can accept or reject capital expenditure proposals may be in the form ofCorrect Answer Board of Directors , Executive committee , Management committeeYour Answer Board of Directors , Executive committee , Management committee
True/FalseQuestion Introduction of a heavy amount of debt capital in the capital structure will not only reduce the valuation of the firm but will also increase the cost of capitalCorrect Answer TrueYour Answer True
True/FalseQuestion Before the company can pay the dividend on Equity shares, it is bound to pay the dividend on Preference sharesCorrect Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
Term loan represents a source of debt finance which is generally repayable in more than one year but less than ten years represents a source of debt finance which is generally repayable in more than one year but less than ten years
Lessee Not able to claim depreciation on asset Not able to claim depreciation on asset
Hirer Claims the depreciation on the asset Claims the depreciation on the asset
Retained earnings Residue left behind from earnings available to equity shareholders after the payment of annual dividend Residue left behind
from earnings available to equity shareholders after the payment of annual dividend
Multiple Choice Multiple AnswerQuestion Uses of financial leverage areCorrect Answer It acts as a guideline in setting maximum limit upto which the company should use the debt capital , It gives an indication regarding the extent to which Earning per share may be affected due to every change in Earning before Interest and taxYour Answer It acts as a guideline in setting maximum limit upto which the company should use the debt capital , It gives an indication regarding the extent to which Earning per share may be affected due to every change in Earning before Interest and tax , It provides useful guidelines for determining the optimal capital structure
Multiple Choice Multiple AnswerQuestion The methods which consider the risk in capital budgeting decision areCorrect Answer Informal method , Risk adjusted discounting rate , Certainty-Equivalent approachYour Answer Informal method , Risk adjusted discounting rate , Certainty-Equivalent approach
Select The BlankQuestion Profit after taxes can be distributed among the owners of the company by way of ________Correct Answer dividendYour Answer dividend
Multiple Choice Single AnswerQuestion Interest Coverage ratio is calculated asCorrect Answer Profit before Interest and taxes / Interest chargesYour Answer Profit before Interest and taxes / Interest charges
True/FalseQuestion Internal rate of return indicates that the discounting rate at which net present value is zeroCorrect Answer TrueYour Answer True
Select The BlankQuestion In ABC analysis C class consist of ________.Correct Answer a very large number of items which are less importantYour Answer a very large number of items which are less important
True/FalseQuestion Semi-variable cost is the cost which varies in direct proportion to the sales revenueCorrect Answer FalseYour Answer False
True/FalseQuestion One of the most common methods to monitor the receivables on macro basis is to calculate age-wise analysis of receivablesCorrect Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Tangible net worth meansCorrect Answer share capital plus free reservesYour Answer Current assets less Current liabilities
Multiple Choice Multiple AnswerQuestion Assuming the current ratio is 2, in which cases would the current ratio declineCorrect Answer Purchase of fixed Assets , Borrow Money on an Interest bearing promissory noteYour Answer Purchase of fixed Assets , Borrow Money on an Interest bearing promissory note
True/FalseQuestion Solvency ratios consists of current ratio and Price earnings ratioCorrect Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Revenue reserves representsCorrect Answer Accumulated retained earnings from the profits of normal business operationsYour Answer Accumulated retained earnings from the profits of normal business operations
Select The BlankQuestion For the selection of the period for which capital expenditure budget should be prepared , ________ a period may not be usefulCorrect Answer Too longYour Answer Too long
Multiple Choice Multiple AnswerQuestion The shares of the company can be bought back out of the following amountsCorrect Answer Free Reserves of the company , Share Premium Account of the company , Proceeds of issue of any shares or other specified securitiesYour Answer Free Reserves of the company , Share Premium Account of the company
Multiple Choice Single AnswerQuestion From the following data, work out the Economic order quantity : Annual Demand : 5000 units, Ordering cost Rs. 60 per order, Price per unit Rs. 100, Inventory carrying cost is 15% on average inventoryCorrect Answer 200 units
Your Answer 200 units
Multiple Choice Single AnswerQuestion Increase in average credit period to maintain sales in view of falling demand can be indicated byCorrect Answer Debtors turnover ratioYour Answer Debtors turnover ratio
Match The FollowingQuestion Correct Answer Your Answer
Increase in current liabilities decreases working capital increases working capital
Increase in liabilities inflow of funds inflow of funds
Decrease in liabilities outflow of funds outflow of funds
Increase in current assets increases working capital cash flow analysis
Select The BlankQuestion The situation of watered capital may arise due to ________Correct Answer Company pays higher price to the vendors of the assets transferredYour Answer Company pays higher price to the vendors of the assets transferred
True/FalseQuestion Economic Order Quantity model is a very useful model of determining the order quantityCorrect Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The advantages of operating lease isCorrect Answer In an operating lease arrangement the equipment risk is transferred to the lessor , It minimizes investment in equipment , Reduces expenditure on maintenanceYour Answer In an operating lease arrangement the equipment risk is transferred to the lessor , It minimizes investment in equipment , Reduces expenditure on maintenance
Select The BlankQuestion ________ in assets involves inflow of fundsCorrect Answer DecreaseYour Answer Decrease
Multiple Choice Multiple AnswerQuestion The functions of a Finance Controller are :Correct Answer Budgeting , Record Keeping , Annual ReportingYour Answer Budgeting , Record Keeping , Annual Reporting
Multiple Choice Single AnswerQuestion The symptom of low capacity utilisation will be shown byCorrect Answer Fixed Assets Turnover ratioYour Answer Fixed Assets Turnover ratio
Multiple Choice Single AnswerQuestion If a company decides to invite public depositsCorrect Answer It should publish an advertising in leading newspaperYour Answer It should publish an advertising in leading newspaper
Multiple Choice Multiple AnswerQuestion The techniques of Analysis and Interpretation of financial statements areCorrect Answer Ratio Analysis , Cash flow AnalysisYour Answer Ratio Analysis , Cash flow Analysis
Multiple Choice Multiple AnswerQuestion Advantages of ABC Analysis areCorrect Answer A close and strict control is facilitated on the most important items , Helps in maintaining a high inventory turnover ratio , Optimum utilisation of the available funds can be assuredYour Answer It enables to locate slow and non-moving items , A close and strict control is facilitated on the most important items , Optimum utilisation of the available funds can be assured
Select The BlankQuestion The amount of profit earned after recovering the interest on long term sources of capital is referred to as ________Correct Answer Profit before taxesYour Answer Profit before taxes
Multiple Choice Single AnswerQuestion Mr. A invested Rs. 10,000 in fixed deposit carrying interest @10% p.a. compounded annually. Calculate the value of investment after two yearsCorrect Answer Rs. 12,100Your Answer Rs. 12,100
Multiple Choice Single AnswerQuestion Increase in the amount of bills payable results inCorrect Answer Increase in cashYour Answer Decrease in cash
Multiple Choice Single AnswerQuestion The assets held by a business which can be converted in the form of cash or used during the course of normal operations is termed asCorrect Answer Current assetsYour Answer Current assets
True/False
Question Inadequate provision for depreciation may be the cause of overcapitalisationCorrect Answer TrueYour Answer True
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Labels: Financial Management
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