Multiple Choice Single Answer
Question The discounted cash
inflows match with discounted cash outflows is known as
Correct Answer Internal Rate of
return
Multiple Choice Single Answer
Question Feature of term loan is
Correct Answer They are required
to be repaid during the lifetime of the company at the predecided intervals say
monthly, quarterly, yearly etc.
Select The Blank
Question Redemtion of
shares/debentures is categorised under ________
Correct Answer Non-operating
cash outflow
Multiple Choice Multiple Answer
Question The disadvantages of a
Partnership firm are
Correct Answer Unlimited
liability , Capacity to raise funds to meet complex business operations is
limited
Multiple Choice Multiple Answer
Question Shortcomings of
Debentures from Investor's point of view
Correct Answer The interest on
debentures is fully taxable , They do not carry the right to vote , Debenture
prices are vulnerable to increase in interest rates
True/False
Question Debt equity ratio is
alternately called Leverage ratio
Correct Answer TRUE
Multiple Choice Multiple Answer
Question Shortcomings of
Debentures from company's point of view
Correct Answer The debenture
interest and capital repayment are obligatory payments , Debenture financing
enhances the financial risk associated with the firm
Multiple Choice Multiple Answer
Question The advantages of
leasing for the lessee are
Correct Answer The payment of
lease rents is the tax deductible expenditure , It is the quickest method of
financing the requirements of long term capital , Avoids risk of ownership
Multiple Choice Multiple Answer
Question The factor may provide the
following services to the client
Correct Answer It 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 Single Answer
Question The Capital Structure
decision mainly refers to the decision of
Correct Answer Financing
Select The Blank
Question The objective of the
management in the investment decisions is in the form of ________
Correct Answer maximisation of
the wealth of the shareholders
Multiple Choice Single Answer
Question Which of the following
assets get generated during course of operations or get utilized within one
year
Correct Answer Current assets
True/False
Question The basic limitation of
the capital budgeting process lies in this fact that it involves various
estimations
Correct Answer TRUE
Select The Blank
Question ________ is one of the
current assets that takes the longest time to get converted into cash
Correct Answer Stock
Multiple Choice Single Answer
Question The company can raise
the funds in the form of Public deposits which can be used
Correct Answer For any purpose
Match The Following
Question Correct
Answer Your Answer
Normal Usage * Lead time for emergency
purchases Danger level Danger level
Maximum lead time * Maximum usage Re-order level Re-order level
Reorder level + Re-order quantity - (
Minimum usage * Minimum lead time ) Maximum
level Maximum level
Re-order level - ( Normal usage * Normal
lead time ) Minimum level Minimum level
Select The Blank
Question The ________ has been
empowered to order the company that fails to repay any deposit to make the
repayment of such deposits
Correct Answer Company Law board
Multiple Choice Single Answer
Question The value created by
the use of resources is more than the total of the input resources is referred
to as
Correct Answer Profit
Multiple Choice Single Answer
Question The rate at which an
organisation must pay to the suppliers of capital for the use of their funds is
termed as
Correct Answer cost of capital
Multiple Choice Multiple Answer
Question In financial analysis,
generally the following leverages are computed
Correct Answer Operating
leverage , Financial leverage , Combined leverage
Multiple Choice Multiple Answer
Question The advantages of
stable Dividend policy are
Correct Answer Credit standing
of the company in the market increases , Share price of the company increases ,
Enjoys Confidence of the shareholders
Select The Blank
Question ________ leverage also
acts as a guideline in setting maximum limit upto which the company should use
the debt capital
Correct Answer Financial
Multiple Choice Multiple Answer
Question If Profit maximization
is accepted as the only goal of finance function, it is criticised on the
following grounds
Correct Answer Ignores risk
factor , Does not consider social obligation , Ignores quality aspect of
benefits associated with a financial course of action
Multiple Choice Multiple Answer
Question Under the Business
Analysis of the company done by Credit rating and Information Services of India
Ltd. the following points are covered
Correct Answer Existing as well
as potential competitors in the industry , Market position of the company
Multiple Choice Multiple Answer
Question Undue increase in Gross
Profit ratio may indicate
Correct Answer Over-valuation of
closing stock , Consideration of non-sales transactions as sales transaction
Multiple Choice Single Answer
Question The comparison of
ratios of the same organisation for different years is termed as
Correct Answer Intra-firm
comparison
Multiple Choice Multiple Answer
Question Disadvantages of Net
Present value
Correct Answer It presupposes
that the discounting rate is known , It may give dissatisfactory results if the
alternative projects involve varying investment outlay , It presupposes that
cash inflows can be reinvested immediately to yield the return equivalent to
the discounting rate which may not be possible
Select The Blank
Question The factor makes the
prepayment of the invoice to the selling company after keeping the ________ as
stipulated
Correct Answer Margin
Multiple Choice Multiple Answer
Question The depreciation is
being charged for the following assets
Correct Answer Plant and
Machinery , Building
Multiple Choice Multiple Answer
Question While using Trade credit
as a source of working capital financing, following factor play an important
role
Correct Answer Liquidity
position of the company , Earnings of the company over a period of time ,
Relationship of the company with the suppliers
True/False
Question Traditional approach
believes the existence of Optimal Capital structure
Correct Answer TRUE
Select The Blank
Question To meet the working
capital needs of the company, banks may grant the working capital term loans
for a period of ________
Correct Answer 3 to 7 years
Multiple Choice Single Answer
Question 'Yield on capital' is
another term employed for
Correct Answer Return on Capital
invested
Multiple Choice Multiple Answer
Question The external users of
financial statements are
Correct Answer Lenders ,
Suppliers
True/False
Question There are essentially
two parties in case of a letter of credit
Correct Answer FALSE
Multiple Choice Multiple Answer
Question Shortcomings of
Debentures from company's point of view
Correct Answer The debenture
interest and capital repayment are obligatory payments , Debenture financing
enhances the financial risk associated with the firm
Match The Following
Question Correct
Answer Your Answer
Undue increase in Gross Profit ratio Over-valuation of closing stock Over-valuation of closing stock
Undue decrease in Gross Profit ratio Under-valuation of closing stock Measures the profitability of the
investments in a firm
Gross Profit ratio Indicates the relation between production cost and Sales Under-valuation of closing stock
Net Profit ratio Indicates that portion of sales available to the owners
after consideration of all types of expenses and cost Indicates the percentage of net sales which is absorbed by the
operating costs
Multiple Choice Single Answer
Question The ratio which
measures the profits available to the equity shareholders on a per share basis
is termed as
Correct Answer Earning per share
True/False
Question Debt equity ratio
indicates the stake of share holders and creditors in the organisation
Correct Answer TRUE
Select The Blank
Question The most crucial
financial decisions of the organisation are taken by ________
Correct Answer Board of
Directors
Multiple Choice Single Answer
Question A decrease in current
assets
Correct Answer decreases working
capital
Multiple Choice Multiple Answer
Question The techniques of
Analysis and Interpretation of financial statements are
Correct Answer Ratio Analysis ,
Cash flow Analysis
Multiple Choice Single Answer
Question The deposit receipt
should contain
Correct Answer Amount of deposit
Select The Blank
Question ________ are basically
interested in the solvency position of the organisation
Correct Answer Financial
institution lending long term finance
Multiple Choice Single Answer
Question The "Pre-emptive
right" of the equity shareholder is
Correct Answer the right to
purchase new shares in the same proportion as their current ownership
True/False
Question Interest and Dividend
are to be considered while calculating Operating ratio
Correct Answer FALSE
Multiple Choice Single Answer
Question The motive of the
company to hold the inventories in order to facilitate the smooth and
uninterrupted production and sales operations is known as
Correct Answer Transaction
motive
Match The Following
Question Correct
Answer Your Answer
Hypothecation Neither the property not the possession of the goods is transferred
to the bank Type of assistance may
be considered by the bank to take care of specific needs of the company when it
receives some export order
Pledge Possession
of the goods is with the bank Mode of
security pertains to immovable properties like land and building
Lien Bank
has a right to retain the goods belonging to the company until the debt due to
the bank is paid Non fund based lending
Mortgage Mode
of security pertains to immovable properties like land and building Neither the property not the possession of the
goods is transferred to the bank
Select The Blank
Question The payment of Dividend
in the form of Bonus shares involves ________
Correct Answer only transfer of
retained earnings to share capital
Multiple Choice Multiple Answer
Question The normal process
which may be followed under the capital rationing situations may be
Correct Answer Rank the projects
according to some measure of profitability , Select projects in the descending
order of profitability till the available funds are exhausted
Select The Blank
Question The projects having
Profitability index of more than ________ will be accepted
Correct Answer one
Multiple Choice Multiple Answer
Question Limitations of capital
budgeting is
Correct Answer Life of the
project cannot be estimated accurately , Cash inflows cannot be eatimated
accurately , Difficulties in deciding the cost of capital
True/False
Question The cycle in which cash
available to the organisation is converted back in the form of cash is referred
to as Working Capital cycle
Correct Answer TRUE
True/False
Question In any organisation,
low creditors turnover ratio is considered to be favourable
Correct Answer TRUE
Multiple Choice Single Answer
Question The combined or
weighted average cost of capital of the various individual components is termed
as
Correct Answer Composite cost
Select The Blank
Question A wrong decision in
respect of capital expenditure proposals may disturb the entire ________
structure of the organisation
Correct Answer financial
True/False
Question Mortgage mode of
security pertains to immovable properties like land and buildings
Correct Answer TRUE
Select The Blank
Question ________ is the most important ratio to measure
whether the firm has earned sufficient returns for its shareholders or not
Correct Answer Return on Shareholders funds
Multiple Choice Single Answer
Question The financing of the
working capital requirement which arises during the course of normal business
operations is termed as
Correct Answer Spontaneous
sources
True/False
Question Re-order level is the
highest level of inventory to be maintained above which the inventory should
not rise
Correct Answer FALSE
True/False
Question Net Present value
presupposes that the cash inflows can be reinvested to yield the return
equivalent to the Internal rate of return
Correct Answer FALSE
True/False
Question One of the most common
methods to monitor the receivables on macro basis is to calculate age-wise
analysis of receivables
Correct Answer FALSE
Select The Blank
Question The introduction of
debt capital in the capital structure increases the earnings per share of
________
Correct Answer Equity
shareholders
Multiple Choice Single Answer
Question Average Collection
Period may be calculated as
Correct Answer Sundry Debtors /
Daily or monthly sales
Multiple Choice Single Answer
Question Feature of term loan is
Correct Answer They are required
to be repaid during the lifetime of the company at the predecided intervals say
monthly, quarterly, yearly etc.
True/False
Question The cost of the factor
is slightly higher than the interest which the client would have paid had he
borrowed the funds from the Bank
Correct Answer TRUE
Multiple Choice Single Answer
Question The real value of the
assets is less than the book value of the assets due to purchase of the assets
during inflationary situations results into
Correct
Answer Overcapitalisation
Select The Blank
Question A wrong decision in
respect of capital expenditure proposals may disturb the entire ________
structure of the organisation
Correct Answer financial
Multiple Choice Single Answer
Question The Policy which
attracts the shareholders who are willing to devote short term dividend income
for long term capital gains and share in the increased prosperity of the
company is termed as
Correct Answer No immediate
Dividend policy
True/False
Question An 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 share
Correct Answer TRUE
Match The Following
Question Correct
Answer Your Answer
Recurring duties of finance executive Raising of funds Raising of funds
Objective of finance function Profit maximization Profit maximization
Treasurer Cost
management Cost management
Finance Controller Internal Auditing Internal
Auditing
Multiple Choice Multiple Answer
Question Undue decrease in Gross
Profit ratio may indicate
Correct Answer Non-consideration
of sales invoices , Under-valuation of closing stock , Improper utilisation of
infrastructural facilities
Multiple Choice Single Answer
Question Cost theory of
capitalisation considers the amount of capitalisation
Correct Answer On the basis of
cost of various assets required to set up the organisation
Multiple Choice Multiple Answer
Question If Profit maximization is accepted as
the only goal of finance function, it is criticised on the following grounds
Correct Answer Ignores risk
factor , Does not consider social obligation , Ignores quality aspect of
benefits associated with a financial course of action
Multiple Choice Multiple Answer
Question Overall profitability
ratio includes
Correct Answer Return on Asset ,
Return on Shareholders Funds
True/False
Question Internal rate of return
is difficult to use , calculate and understand
Correct Answer TRUE
Multiple Choice Multiple Answer
Question Before investing in the
project, Venture capitalist is interested in ensuring that
Correct Answer The project is
technically feasible , It is commercial viable , The entrepreneurs are
technically competent
Select The Blank
Question Private limited company
and Public limited company are the companies based on the classification of
________
Correct Answer Number of members
Multiple Choice Single Answer
Question The ratio which indicates
the protection available to the lenders of long term capital in the form of
funds available to pay the interest charges is
Correct Answer Interest coverage
ratio
True/False
Question Re-order level is the
highest level of inventory to be maintained above which the inventory should
not rise
Correct Answer FALSE
Multiple Choice Multiple Answer
Question The functions of a
Finance Controller are :
Correct Answer Budgeting ,
Record Keeping , Annual Reporting
Multiple Choice Multiple Answer
Question The advantages of
operating lease is
Correct 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 Blank
Question The fixed assets are
expressed at ________
Correct Answer Cost -
Depreciation
Multiple Choice Multiple Answer
Question The recurring duties of
Finance Executive includes
Correct Answer Working Capital
Management , Fixed Assets management , Control of funds
Multiple Choice Single Answer
Question The Dividend in the
form of cash is payable out of the current year's profit after providing for
sufficient amount of
Correct Answer Depreciation
Multiple Choice Single Answer
Question Collection from debtors
appear in the cash budget under the head
Correct Answer Operating Cash
Inflow
True/False
Question If the company buys
back its own shares, it shall not make further issue of Bonus shares within a
period of 24 months
Correct Answer FALSE
Multiple Choice Multiple Answer
Question External sources of
cash are as follows :
Correct Answer Issue of new
shares , long term loans , short term borrowings
True/False
Question Undercapitalisation
indicates sound financial position and efficient management of the company
Correct Answer TRUE
Multiple Choice Multiple Answer
Question International financial
function of the organisation comprises of :
Correct Answer Exchange of
currencies , Study of flow of funds beyond national boundaries
Multiple Choice Single Answer
Question Which of the following
current asset is the least liquid asset
Correct Answer Inventories
True/False
Question Budgeting is the main
function of a Treasurer
Correct Answer FALSE
True/False
Question The Stock Dividends are
more expensive to administer as compared to cash dividends
Correct Answer TRUE
True/False
Question Semi-variable cost is
the cost which varies in direct proportion to the sales revenue
Correct Answer FALSE
Multiple Choice Single Answer
Question The discounted cash
inflows match with discounted cash outflows is known as
Correct Answer Internal Rate of
return
Multiple Choice Single Answer
Question Feature of term loan is
Correct Answer They are required
to be repaid during the lifetime of the company at the predecided intervals say
monthly, quarterly, yearly etc.
Select The Blank
Question Redemtion of
shares/debentures is categorised under ________
Correct Answer Non-operating
cash outflow
Multiple Choice Multiple Answer
Question The disadvantages of a
Partnership firm are
Correct Answer Unlimited
liability , Capacity to raise funds to meet complex business operations is
limited
Multiple Choice Multiple Answer
Question Shortcomings of
Debentures from Investor's point of view
Correct Answer The interest on
debentures is fully taxable , They do not carry the right to vote , Debenture
prices are vulnerable to increase in interest rates
True/False
Question Debt equity ratio is
alternately called Leverage ratio
Correct Answer TRUE
Multiple Choice Multiple Answer
Question Shortcomings of
Debentures from company's point of view
Correct Answer The debenture
interest and capital repayment are obligatory payments , Debenture financing
enhances the financial risk associated with the firm
Multiple Choice Multiple Answer
Question The advantages of
leasing for the lessee are
Correct Answer The payment of
lease rents is the tax deductible expenditure , It is the quickest method of
financing the requirements of long term capital , Avoids risk of ownership
Multiple Choice Multiple Answer
Question The factor may provide
the following services to the client
Correct Answer It 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 Single Answer
Question The Capital Structure
decision mainly refers to the decision of
Correct Answer Financing
Select The Blank
Question The objective of the
management in the investment decisions is in the form of ________
Correct Answer maximisation of
the wealth of the shareholders
Multiple Choice Single Answer
Question Which of the following
assets get generated during course of operations or get utilized within one
year
Correct Answer Current assets
True/False
Question The basic limitation of
the capital budgeting process lies in this fact that it involves various
estimations
Correct Answer TRUE
Select The Blank
Question ________ is one of the
current assets that takes the longest time to get converted into cash
Correct Answer Stock
Multiple Choice Single Answer
Question The company can raise
the funds in the form of Public deposits which can be used
Correct Answer For any purpose
Match The Following
Question Correct
Answer Your Answer
Normal Usage * Lead time for emergency
purchases Danger level Danger level
Maximum lead time * Maximum usage Re-order level Re-order level
Reorder level + Re-order quantity - (
Minimum usage * Minimum lead time ) Maximum
level Maximum level
Re-order level - ( Normal usage * Normal
lead time ) Minimum level Minimum level
Select The Blank
Question The ________ has been
empowered to order the company that fails to repay any deposit to make the
repayment of such deposits
Correct Answer Company Law board
Multiple Choice Single Answer
Question The value created by
the use of resources is more than the total of the input resources is referred
to as
Correct Answer Profit
Match The Following
Question Correct
Answer Your Answer
Internal rate of return less than cost of
capital Project rejected method by subtracting present value of
cash outflows from the present value of cash inflows
Internal rate of return breakeven rate of borrowing for the
company indicates that period within
which the discounted cash inflows equal to the discounted cash outflows
Profitability Index ratio between total discounted cash inflows and total
discounted cash outflows ratio between
total discounted cash inflows and total discounted cash outflows
Profitability Index more than one Project accepted Project rejected
Multiple Choice Single Answer
Question Credit period is
Correct Answer the time allowed
by the company to the customers to pay their dues
True/False
Question Ratios can be expressed
only in percentage
Correct Answer FALSE
True/False
Question Retained earnings involves
cost in terms of dividend foregone by or withheld from the equity shareholders
Correct Answer TRUE
Multiple Choice Single Answer
Question Purchases of raw
material appear in the cash budget under the head
Correct Answer Operating cash
outflow
True/False
Question Under hypothecation
mode of security neither the property not the possession of the goods
hypothecated is transferred to the Bank
Correct Answer TRUE
Multiple Choice Single Answer
Question Financing 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 by
Correct Answer Bonneville and
Dewey
Multiple Choice Multiple Answer
Question The cost of managing
inventory includes
Correct Answer Ordering cost ,
Carrying cost
Multiple Choice Single Answer
Question Composite cost is
calculated as
Correct Answer Total weighted
cost / Total weights
Multiple Choice Single Answer
Question The rate of return
which computes the average annual yield on the net investment in the project is
known as
Correct Answer Accounting rate
of return
Multiple Choice Single Answer
Question Registered Debentures
are those
Correct Answer which can be
transferred to another person only through the company
Select The Blank
Question ________ ratio will be
useful in indicating the symptom of inability to pay dues to financial
institutions
Correct Answer Debt Service
Coverage ratio
True/False
Question Debt equity ratio
indicates the stake of share holders and creditors in the organisation
Correct Answer TRUE
Multiple Choice Single Answer
Question The traditional
approach to financial management refers only to the procurement of funds by
Correct Answer Corporate entity
True/False
Question Interest and Dividend
are to be considered while calculating Operating ratio
Correct Answer FALSE
Multiple Choice Multiple Answer
Question The book-keeping and
accounting activities in relation to the receivables management undertaken by the
factor includes
Correct Answer Maintenance of
debtors ledger , Various periodical reports about outstanding from the
customers , Age-wise analysis of the outstanding
Multiple Choice Single Answer
Question The period that within
which the cost of the project will be completely recovered is known as
Correct Answer Pay Back period
Multiple Choice Single Answer
Question Receipt of
loans/borrowings appear in the cash budget under the head
Correct Answer Non-operating
cash inflow
Multiple Choice Multiple Answer
Question The effects of
undercapitalisation are
Correct Answer Increase tax
liability of the company , Demand of the employees to increase wages
Multiple Choice Multiple Answer
Question Operating cost incurred
by the company can be classified into
Correct Answer Variable cost ,
Fixed cost , Semi-variable cost
Multiple Choice Single Answer
Question Current assets are also
referred to as
Correct Answer Working Capital
Multiple Choice Single Answer
Question The Investment
decisions are mainly concerned with
Correct Answer Application of
funds
Multiple Choice Single Answer
Question The cost which remains
constant upto a certain sales revenue and increases if the sales revenue
increases beyond a certain point is termed as
Correct Answer Semi-variable
cost
Select The Blank
Question The most accepted
interpretation of the term 'funds' is in the form of ________
Correct Answer Working capital
True/False
Question Return on Assets is a
ratio of relationship between Assets and Sales
Correct Answer FALSE
Multiple Choice Multiple Answer
Question The collection
programme of the firm consists of
Correct Answer Maintaining the
state of receivables , Dispatch of letters to customers whose due date is
approaching , Telegraphic and Telephonic advice to customers around the due
date
True/False
Question Provision for doubtful
debts is created on debtors who are definitely bad
Correct Answer FALSE
True/False
Question Ratio should be
computed on the basis of inter-related figures which have a cause and effect
relationship
Correct Answer TRUE
Multiple Choice Multiple Answer
Question Disadvantages of
Internal rate of return is
Correct Answer It is difficult
to use and understand , It presupposes that the cash inflows can be reinvested
immediately to yield the return equivalent to Internal rate of return which is
not very realistic
True/False
Question During the phase of
boom and prosperity the company will like to retain more profits which can be
used during the depression which is likely to follow
Correct Answer TRUE
Multiple Choice Single Answer
Question The period that
indicates the period within which the discounted cash inflows equal to the
discounted cash outflows involved in the project is termed as
Correct Answer Discounted Pay
back period
Select The Blank
Question ________ financing is
more preferred route for venture capital funding
Correct Answer Equity
Multiple Choice Multiple Answer
Question Goods Stolen ( Sale
price Rs. 1000/- Cost Rs. 800/- ) ; Which of the accounts will be affected by
this transaction
Correct Answer Purchases Account
, Loss by theft Account
Multiple Choice Single Answer
Question Working Capital is
computed as
Correct Answer Current assets -
Current liabilities
Multiple Choice Single Answer
Question The effect of Cash
collected from Debtors on the funds flow is that there will be
Correct Answer No effect on the
funds flow
Multiple Choice Multiple Answer
Question The letter of credit
may be
Correct Answer Revocable letter
of credit , Confirmed letter of credit
Match The Following
Question Correct
Answer Your Answer
Risk adjusting discounting rate method of
capital budgeting decision discounting
rate is increased in case of projects involving greater risk discounting rate is increased in case of
projects involving greater risk
Capital rationing situation where the company has more acceptable proposals
requiring a greater amount of funds situation
where the company has more acceptable proposals requiring a greater amount of
funds
Problems relating to situation of capital
rationing Project Indivisibility Project Indivisibility
Informal method of capital budgeting
decision subjective method subjective method
True/False
Question A partnership is an incorporated
association of individuals.
Correct Answer FALSE
Select The Blank
Question A liquid ratio of
________ is supposed to be standard
Correct Answer 1:01
Multiple Choice Single Answer
Question The cost which is
attached with the source of capital apparently is termed as
Correct Answer Explicit cost
Multiple Choice Single Answer
Question The Pay Bank period is
calculated as
Correct Answer Cash outlay /
Annual cash inflow
Multiple Choice Single Answer
Question These are the elements
of a plan that specify how objectives are to be achieved
Correct Answer Strategies
Multiple Choice Single Answer
Question It gathers, records and
analyses data about problems related to Marketing
Correct Answer Market Research
True/False
Question Marketing channels move
products from customers to manufacturer.
Correct Answer FALSE
Multiple Choice Single Answer
Question It is a reduction in
list price that helps marketer to adjust actual price without changing
published list prices
Correct Answer Discounts
Multiple Choice Single Answer
Question New products enter the
market and old customers make repeat purchase during which stage of product
life cycle?
Correct Answer Growth
Multiple Choice Multiple Answer
Question A business is a system
consisting of following elements
Correct Answer Input and output
, Objectives , Process and feedback
Multiple Choice Multiple Answer
Question Characteristics for
effective market segmentation are:
Correct Answer Actionable ,
Measurable , Accessible
Multiple Choice Multiple Answer
Question Trade promotions
include
Correct Answer Push money
allowance , Promotional allowance
Multiple Choice Multiple Answer
Question Senses in our body are
Correct Answer Taste , Touch ,
See
Multiple Choice Single Answer
Question The traditional
approach towards uncertainity is
Correct Answer Binary
Multiple Choice Multiple Answer
Question Market means:
Correct Answer People with
desires , People with willingness and ability to buy , People become customer
as they are authorised to buy
Select The Blank
Question ________ is a bundle of
physical, chemical and/or intangible attributes that has the potential of
satisfying customer wants.
Correct Answer Product
Multiple Choice Single Answer
Question The greatest amount of
satisfaction comes from which utility
Correct Answer Possession
Select The Blank
Question ________cost accounting
measures the cost of producing and ignores the cost of non-producing
Correct Answer Traditional
Multiple Choice Single Answer
Question In this pricing, prices
are set high to benefit from the price quality relationship that exists in many
consumer's mind
Correct Answer Prestige pricing
Select The Blank
Question Few large buyers do
maximum purchasing in ________
Correct Answer Industrial market
Multiple Choice Single Answer
Question Marketer tries to seek
what kind of response from the other party?
Correct Answer Behavioural
Select The Blank
Question A speciality product is
________ intensively distributed than a shopping product
Correct Answer Less
Multiple Choice Single Answer
Question Who provides time and
place utility?
Correct Answer Intermediary
Multiple Choice Single Answer
Question Put the stages of
adoption process in order
Correct Answer Awareness,
interest, evaluation, trial, adoption
Multiple Choice Single Answer
Question Marketing arises from ?
Correct Answer Exchange
True/False
Question Gross margin is
operating expenses + net profit.
Correct Answer TRUE
Select The Blank
Question ________ leads to
market fragmentation.
Correct Answer Competition
Multiple Choice Multiple Answer
Question Uses of Market research
are:
Correct Answer Advertising
effectiveness , Sales forecasting , Identifying market trends
Multiple Choice Multiple Answer
Question Adoption rate will be
higher and faster if the product has
Correct Answer Lower price ,
Greater utility , Compatability with society
Select The Blank
Question Modern Accounting uses
________ as a unit of measure
Correct Answer Time
True/False
Question Logistics is an area of
potentially high cost saving and improves customer satisfaction.
Correct Answer TRUE
Multiple Choice Single Answer
Question It focusses on one or
more selected market segments and develops separate marketing mix for each
segment
Correct Answer Target Marketing
True/False
Question The greater the number
of substitutes for a product, the less price elastic is its demand.
Correct Answer FALSE
True/False
Question Economic forecasts are
available from industry trade associations
Correct Answer FALSE
Select The Blank
Question ________ occurs when
people inspite of being qualified and experienced and trained have to settle
for a low level job.
Correct Answer Underemployment
Match The Following
Question Correct
Answer Your Answer
Wide market coverage is achieved. Intensive distribution. Marketing channel
Helps in the process of matching demand and
supply. Marketing channel Vertical integration
No intermediaries between producer and
consumer. Direct channel Direct channel
Combining two or more levels of a channel
under one participant's control. Vertical
integration Intensive distribution.
Match The Following
Question Correct
Answer Your Answer
Exclusive Assortment Carrying the line of only one manufacturer Carrying many unrelated product lines
Open bid Contract
awarded to lowest bidder Contract awarded
to lowest bidder
Negotiated Contract Direct negotiation with one or more companies covering project and
terms Direct negotiation with one or
more companies covering project and terms
Deep Assortment Carrying a product family in depth, drawing on many producer's
output Carrying the line of only one
manufacturer
Select The Blank
Question ________ is a modern
plant consisting of modules centered around a stage in the production process
Correct Answer Flotilla concept
Multiple Choice Single Answer
Question Members of this group
are average white and blue collar workers who aim for better living
Correct Answer Middle class
Multiple Choice Multiple Answer
Question Total cost includes :
Correct Answer Fixed cost ,
Variable cost
True/False
Question "To increase the
market share of our product" .Is it a well defined objective?
Correct Answer FALSE
True/False
Question A drive is a need that
sufficiently presses a person to act
Correct Answer TRUE
Multiple Choice Single Answer
Question This involves
developing two or more market strategies for two or more market segments
Correct Answer Multi-segmentation
Multiple Choice Single Answer
Question This discount is
offered to customers to encourage them to remain loyal buyers
Correct Answer Quantity discount
Multiple Choice Multiple Answer
Question Types of strategic
business units are :
Correct Answer Stars , Cash cows
, Question marks
True/False
Question Changes in company
structure also necessitates changes in the systems in various degrees
Correct Answer TRUE
True/False
Question Publicity is news
carried in the mass media about a firm and its products, policies or actions.
Correct Answer TRUE
Select The Blank
Question ________is a strong
internal stimulus impelling action
Correct Answer Drive
Multiple Choice Multiple Answer
Question The various variations
of Negotiated contract are
Correct Answer Cost plus pricing
, Fixed price , Fixed price and incentive
Multiple Choice Single Answer
Question Major components of
marketing mix are :
Correct Answer Product
Multiple Choice Multiple Answer
Question For a low involvement regular
purchase product, consumer goes through what all stages of buying process
Correct Answer Need recognition
, Purchase decision
Multiple Choice Multiple Answer
Question Proprietory ratio can
be calculated as
Correct Answer Total Assets /
Owners Funds , Fixed Assets / Owners Funds , Current Assets / Owners Funds
Multiple Choice Multiple Answer
Question In financial analysis,
generally the following leverages are computed
Correct Answer Operating
leverage , Financial leverage , Combined leverage
Multiple Choice Multiple Answer
Question The shares of the
company can be bought back out of the following amounts
Correct Answer Free Reserves of
the company , Share Premium Account of the company , Proceeds of issue of any
shares or other specified securities
Match The Following
Question Correct
Answer Your Answer
The relation of Net Sales and Working
Capital Working Capital turnover
ratio Working Capital turnover
ratio
The ratio which indicates the speed at
which the Sundry debtors are converted in the form of cash Debtors turnover ratio Debtors turnover ratio
The ratio which indicates the efficiency of
the organisation with which the capital employed is being utilised Capital turnover ratio Capital turnover ratio
Ratio which measures the profitability of
the investments in a firm Return on
Asset Dividend Payment ratio
True/False
Question The basic objective
behind fixation of the levels is to avoid overstocking and understocking
Correct Answer TRUE
Select The Blank
Question Continuous verification
of physical stock to ensure that the physical balance and the book balance
tallies is carried under ________.
Correct Answer Perpetual
Inventory system
Multiple Choice Multiple Answer
Question Uses of financial
leverage are
Correct 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
Multiple Choice Single Answer
Question Among all the
intermediaries in Capital market, probably the most important and significant
intermediary is the
Correct Answer Merchant Banker
Multiple Choice Single Answer
Question The return paid on own
capital is
Correct Answer Dividend
True/False
Question In Regular Stock
Dividend policy, the company may pay dividend in the form of bonus shares
instead of cash
Correct Answer TRUE
Select The Blank
Question The amount of shares
bought back by the company should not be more than ________ of total paid-up
capital of the company and its free reserves
Correct Answer 0.25
Multiple Choice Single Answer
Question A private limited
company and a public limited company are similar on the basis of
Correct Answer Limited liability
Multiple Choice Multiple Answer
Question Fund based lending of
banks include
Correct Answer Overdraft , Bills
Purchased
True/False
Question Projects for venture
capital financing are more risky in nature and involve larger gestation period
Correct Answer TRUE
Select The Blank
Question As 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
finance
Correct Answer 0.25
Select The Blank
Question ________ is the most
important ratio to measure whether the firm has earned sufficient returns for
its shareholders or not
Correct Answer Return on
Shareholders funds
True/False
Question Earnings per share does
not indicate the amount of profits distributed among the owners by way of
dividend and also the amount of profits retained in the business
Correct Answer TRUE
Match The Following
Question Correct
Answer Your Answer
Objective of finance function Profit maximization Cost management
Treasurer Cost
management Raising of funds
Finance Controller Internal Auditing Profit
maximization
Recurring duties of finance executive Raising of funds Internal Auditing
Select The Blank
Question The most accepted
interpretation of the term 'funds' is in the form of ________
Correct Answer Working capital
Multiple Choice Multiple Answer
Question The causes of
undercapitalisation are
Correct Answer Company following too
conservative policy for paying the dividends , Future earnings may be
underestimated
Select The Blank
Question The indication given by
Internal rate of return is that it is the ________ rate at which the company
will be able to pay towards the interest on amounts borrowed for investing in
the projects
Correct Answer maximum
Multiple Choice Multiple Answer
Question Advantages of letter of
credit to the Importer
Correct Answer the importer can
bargain for better trading terms , he is assured to get proper supply of the
goods
Select The Blank
Question In ABC analysis C class
consist of ________.
Correct Answer a very large
number of items which are less important
Select The Blank
Question Under ________, it is
not only necessary to decide profitable investments but also necessary to rank
the acceptable proposals according to their relative profitabilities
Correct Answer Capital rationing
Select The Blank
Question The current ratio of
________ is considered to be standard
Correct Answer 2:01
Multiple Choice Single Answer
Question The period that
indicates the period within which the discounted cash inflows equal to the
discounted cash outflows involved in the project is termed as
Correct Answer Discounted Pay
back period
Multiple Choice Multiple Answer
Question Under the Business
Analysis of the company done by Credit rating and Information Services of India
Ltd. the following points are covered
Correct Answer Existing as well
as potential competitors in the industry , Market position of the company
Select The Blank
Question Carriage Inward is
normally debited to ________
Correct Answer Manufacturing
Account
True/False
Question The evaluation of
various proposals of capital expenditure should be done as rationally as
possible
Correct Answer TRUE
Multiple Choice Single Answer
Question Expected future
earnings of ABC Ltd. are Rs. 2,00,000. Find out the amount of capitalisation if
the rate of return earned by similar types of companies is 10%.
Correct Answer Rs. 20,00,000
True/False
Question It is only after crossing
the break even point that the profit generating capacity of the company starts
Correct Answer TRUE
Multiple Choice Single Answer
Question A long term creditor is
interested in determining whether his claims are adequately secured. Which
accounting ratio will be used by the creditors
Correct Answer Debt Service
coverage ratio
Multiple Choice Single Answer
Question The most easiest form
of organisation to form and operate is
Correct Answer Proprietary
concern
True/False
Question Usually, the
implementation of capital expenditure proposals are spread over more than one
year
Correct Answer TRUE
Select The Blank
Question The concept of watered
capital is confined to the time of ________ of the company
Correct Answer Promotion
Multiple Choice Single Answer
Question The ratio which
measures the extent to which borrowed funds support the firm's assets is termed
as
Correct Answer Debt-Asset ratio
Multiple Choice Multiple Answer
Question Limitation of Economic
Order Quantity assumptions
Correct Answer Demand throughout
the year may not be constant, may fluctuate according to fluctuations in
production , Prices of the materials may not remain same throughout the year ,
Materials may not be available at the same price, discounts allowed by the
suppliers should also be considered
Multiple Choice Single Answer
Question The company which pays
a fixed amount of dividend irrespective of the fluctuations in income is
categorised under
Correct Answer Stable Dividend
policy
True/False
Question In an organisation,
Dividend distribution is the function of a Finance Controller
Correct Answer FALSE
Multiple Choice Single Answer
Question An organized collection
of data according to logical and consistent accounting procedure is known as
Correct Answer Financial
Statement
Multiple Choice Multiple Answer
Question Top management who can
accept or reject capital expenditure proposals may be in the form of
Correct Answer Board of
Directors , Executive committee , Management committee
Multiple Choice Multiple Answer
Question Objective of perpetual
inventory system are
Correct Answer Maintenance of
Bin Cards and Stores ledger in order to know about the stock in quantity and
value at any given point of time , Continuous verification of physical stock to
ensure that the physical balance and the book balance tallies
True/False
Question Financial lease is also
referred to as Capital lease
Correct Answer TRUE
Multiple Choice Single Answer
Question For the calculation of
Operating Profit / Loss , Goodwill written off should be
Correct Answer added to the Net
Profit as per Profit and loss account
Multiple Choice Single Answer
Question If a company decides to
invite public deposits
Correct Answer It should publish
an advertising in leading newspaper
Multiple Choice Multiple Answer
Question The classification of
return on Investment are
Correct Answer Return on Asset ,
Return on Capital Employed
True/False
Question Profitability Statement
is a period statement
Correct Answer TRUE
Match The Following
Question Correct
Answer Your Answer
Undue increase in Gross Profit ratio Over-valuation of closing stock Over-valuation of closing stock
Undue decrease in Gross Profit ratio Under-valuation of closing stock Under-valuation of closing stock
Gross Profit ratio Indicates the relation between production cost and Sales Indicates the relation between production cost
and Sales
Net Profit ratio Indicates that portion of sales available to the owners
after consideration of all types of expenses and cost Indicates that portion of sales available to the owners after
consideration of all types of expenses and cost
Multiple Choice Multiple Answer
Question Goods Stolen ( Sale
price Rs. 1000/- Cost Rs. 800/- ) ; Which of the accounts will be affected by
this transaction
Correct Answer Purchases Account
, Loss by theft Account
Multiple Choice Single Answer
Question Net cash inflow is
arrived at
Correct Answer Revenue after tax
add depreciation
Multiple Choice Multiple Answer
Question Measurement of cost of
capital can be done through
Correct Answer Cost of Debt ,
Cost of Preference shares , Cost of Equity shares
Multiple Choice Single Answer
Question From the following data
compute Reorder level : Normal usage 40 units per week each, Minimum usage 15
units per week each, Maximum usage 65 units per week each, Re-order quantity
400 units, Re-order period 4 to 6 weeks
Correct Answer 390 units
True/False
Question The factor need not
factor all the debts of the client
Correct Answer TRUE
Select The Blank
Question Factoring indicates the
relationship between ________ and a business organisation
Correct Answer Financial
institutions
Select The Blank
Question The amount of shares
bought back by the company should not be more than ________ of total paid-up
capital of the company and its free reserves
Correct Answer 0.25
Select The Blank
Question In ABC analysis B class
consist of ________.
Correct Answer relatively less
important items
Select The Blank
Question Interest on overdraft
is payable on the actual amount drawn and is calculated on ________ product
basis
Correct Answer daily
True/False
Question During the phase of
boom and prosperity the company will like to retain more profits which can be used
during the depression which is likely to follow
Correct Answer TRUE
Multiple Choice Single Answer
Question Requirement of working
capital is high is case of
Correct Answer Machine tool
industry
Multiple Choice Single Answer
Question Current assets are also
referred to as
Correct Answer Working Capital
Multiple Choice Single Answer
Question The Irrelevance
approach is based on the assumption of
Correct Answer Capital markets
are perfect, Investors are rational, transactions are instaneous and costless.
Securities are divisible and no investor can influence the market price
Select The Blank
Question The indication given by
Internal rate of return is that it is the ________ rate at which the company
will be able to pay towards the interest on amounts borrowed for investing in
the projects
Correct Answer maximum
Select The Blank
Question A wider connotation of
the term fund is found in the interpretation of the term 'funds' as ________
concept
Correct Answer Resources
Multiple Choice Single Answer
Question The Investment
decisions are mainly concerned with
Correct Answer Application of
funds
Select The Blank
Question The debt equity ratio
of the company after such buy back of shares should not be more than ________
except where the Central Government allows a higher ratio in case of certain
companies
Correct Answer 2:01
Multiple Choice Single Answer
Question The products which are
ready for sale in the market are termed as
Correct Answer Finished goods
Multiple Choice Single Answer
Question Collection cost in
connection with accounts receivables involves
Correct Answer Administrative
cost
True/False
Question Capital budgeting
process involves the estimation of various future aspects regarding future cash
inflows, life of the project etc.
Correct Answer TRUE
Multiple Choice Single Answer
Question Financing 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 by
Correct Answer Bonneville and
Dewey
Multiple Choice Multiple Answer
Question Indicate which of these
are Profitability ratios
Correct Answer Operating ratio ,
Gross Profit ratio
Multiple Choice Multiple Answer
Question The methods which
consider the risk in capital budgeting decision are
Correct Answer Informal method ,
Risk adjusted discounting rate , Certainty-Equivalent approach
True/False
Question Internal rate of return
considers time value of money
Correct Answer TRUE
True/False
Question For the computation of
Gross Profit ratio, manufacturing cost is to be considered in case of
manufacturing companies
Correct Answer TRUE
Select The Blank
Question The fixed assets are
expressed at ________
Correct Answer Cost -
Depreciation
True/False
Question Wealth maximization
goal is only an extension of Profit maximization goal of the organisation
Correct Answer TRUE
Multiple Choice Multiple Answer
Question Fixation of Inventory
levels are based on the following propositions
Correct Answer There has to be a
constant watch on the actual stock level of various kinds of materials so that
proper action can be taken , The various levels fixed are not fixed on a
permanent basis and are subject to revision regularly
Multiple Choice Single Answer
Question An increase in the
share premium account is
Correct Answer Source of funds
Select The Blank
Question As per the Tandon
Committee, the norms suggested for consumption of raw materials should be in
________
Correct Answer months
Multiple Choice Single Answer
Question The traditional
approach to financial management refers only to the procurement of funds by
Correct Answer Corporate entity
Multiple Choice Multiple Answer
Question The recommendations of
the Dahejia committee included
Correct Answer the banks should
not only be security oriented but they should take into consideration total
financial position of the client , all cash credit accounts with banks should
be bifurcated in two categories
Match The Following
Question Correct
Answer Your Answer
Objective of finance function Profit maximization Profit maximization
Treasurer Cost
management Cost management
Finance Controller Internal Auditing Internal
Auditing
Recurring duties of finance executive Raising of funds Raising of funds
Multiple Choice Single Answer
Question The cost of equity
shares may be decided on the basis of yields actually realised over the period
of past few years which may be expected to be continued in future also as per
the
Correct Answer Realised Yield
Approach
True/False
Question The knowledge of
Working capital is necessary while studying the concept of Cash flow statement
Correct Answer TRUE
Select The Blank
Question Inflow of funds may not
necessarily result in ________
Correct Answer Inflow of cash
Select The Blank
Question In case of Bills
Purchased, the company gets only the present worth of the amount of the bill,
the difference between the face value of the bill and the amount of assistance
being in the form of ________
Correct Answer discount charges
Multiple Choice Multiple Answer
Question Advantages of cash flow
statement are
Correct Answer Helps in
efficient cash management , Discloses the movements of cash , Discloses the
success or failure of cash planning
Multiple Choice Multiple Answer
Question Limitations of credit
rating are
Correct Answer Credit 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
True/False
Question Credit rating is
obligatory only in case of the debt instruments
Correct Answer TRUE
Multiple Choice Single Answer
Question The main function of
finance under the traditional approach comprises of
Correct Answer Procurement of
funds
Multiple Choice Multiple Answer
Question Under the Financial
Analysis of the company done by Credit rating and Information Services of India
Ltd. the following points are covered
Correct Answer Accounting
policies followed by the company , Adequacy of cash flows for fixed capital
True/False
Question Wages/salaries is
considered under Operating cashinflow
Correct Answer FALSE
Multiple Choice Single Answer
Question The ratio which
indicates the extent to which the Owners' funds are sunk in different kinds of
assets is termed as
Correct Answer Proprietory ratio
True/False
Question Re-order level is the
highest level of inventory to be maintained above which the inventory should
not rise
Correct Answer FALSE
Multiple Choice Single Answer
Question The method of
subtracting present value of cash outflows from present value of cash inflows
is known as
Correct Answer Net present value
Multiple Choice Single Answer
Question Capital cost is
Correct Answer cost on the use
of additional capital to support credit sales
Select The Blank
Question Retained earnings
indicates that whatever profits are earned by the company are not distributed
by it by way of ________ but are kept aside for use in future for expansion or
other purpose
Correct Answer Dividend
Multiple Choice Single Answer
Question The Walter and Gordon's
approach of Dividend policy is based on the assumption of
Correct Answer Retained earnings
represent the only source of financing for the firm, EPS, dividend per share,
internal rate of return and cost of capital are all constant
Multiple Choice Multiple Answer
Question Gross Profit can be
increased by either
Correct Answer Reduced
Production cost, sales price remaining the same , Increased Sales price,
Reduced Production cost , Increased Sales price, Production cost remaining the
same
Select The Blank
Question Suggestions made by the
Tandon committee regarding the information system were accepted by Reserve Bank
of India and were made applicable to all the borrowers having the overall
banking limits of more than Rs.________
Correct Answer 1 crore
Select The Blank
Question Chhore committee has
suggested that the banks should appraise and fix separate limits for normal
non-peak levels and also peak levels, it should be done in respect of all
borrowers enjoying the banking credit limits of more than Rs. ________
Correct Answer 10 lakhs
True/False
Question Debt Service means
payment of instalments and interest against an amount borrowed as per terms of
loan
Correct Answer TRUE
Select The Blank
Question The ________
collections may be useful for reducing the postal float as well as bank float
Correct Answer Decentralised
Multiple Choice Single Answer
Question Gross Profit ratio is
calculated as
Correct Answer [(Gross Profit /
Net Sales)] * 100
Match The Following
Question Correct
Answer Your Answer
Capital rationing situation where the company has more acceptable proposals
requiring a greater amount of funds situation
where the company has more acceptable proposals requiring a greater amount of
funds
Problems relating to situation of capital
rationing Project Indivisibility subjective method
Informal method of capital budgeting
decision subjective method Project Indivisibility
Risk adjusting discounting rate method of
capital budgeting decision discounting
rate is increased in case of projects involving greater risk discounting rate is increased in case of
projects involving greater risk
Multiple Choice Single Answer
Question The value created by
the use of resources is more than the total of the input resources is referred
to as
Correct Answer Profit
True/False
Question The term Current Assets
and Liquid assets have synonymous meanings
Correct Answer FALSE
Multiple Choice Multiple Answer
Question Packing credit facility
can take the following form
Correct Answer Pre-shipment
Packing credit , Post-shipment Packing credit
True/False
Question Public deposits are
unsecured borrowings for the company
Correct Answer TRUE
True/False
Question There are essentially
two parties in case of a letter of credit
Correct Answer FALSE
Match The Following
Question Correct
Answer Your Answer
Hypothecation Neither the property not the possession of the goods is transferred
to the bank Neither the property
not the possession of the goods is transferred to the bank
Pledge Possession
of the goods is with the bank Possession
of the goods is with the bank
Lien Bank
has a right to retain the goods belonging to the company until the debt due to
the bank is paid Bank has a right
to retain the goods belonging to the company until the debt due to the bank is
paid
Mortgage Mode
of security pertains to immovable properties like land and building Mode of security pertains to immovable
properties like land and building
Multiple Choice Single Answer
Question Term loan is
Correct Answer liabilities
accepted by the company which are for the purpose of purchasing the fixed
assets
Multiple Choice Multiple Answer
Question Uses of financial
leverage are
Correct 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
Multiple Choice Single Answer
Question The ratio which
indicates the protection available to the lenders of long term capital in the
form of funds available to pay the interest charges is
Correct Answer Interest coverage
ratio
Select The Blank
Question Retained earnings is a
source of ________ finance
Correct Answer Internal
Multiple Choice Multiple Answer
Question Limitation of Economic
Order Quantity assumptions
Correct Answer Demand throughout
the year may not be constant, may fluctuate according to fluctuations in
production , Prices of the materials may not remain same throughout the year ,
Materials may not be available at the same price, discounts allowed by the
suppliers should also be considered
Multiple Choice Single Answer
Question The cost which remains
constant irrespective of changes in the sales revenue is termed as
Correct Answer Fixed cost
Multiple Choice Multiple Answer
Question The advantages of
continuous stock taking are
Correct Answer The figures of
stock can be readily available for the purpose of periodic Profit and Loss
Account , It enables to locate slow and non-moving items
Multiple Choice Multiple Answer
Question The sources of cash are
Correct Answer Cash from
operations , sale of machinery , Issue of new shares
Multiple Choice Multiple Answer
Question External sources of
cash are as follows :
Correct Answer short term
borrowings , Issue of new shares , long term loans
True/False
Question Ordering cost of inventory
includes cost incurred for insurance
Correct Answer FALSE
Multiple Choice Single Answer
Question The period that
indicates the period within which the discounted cash inflows equal to the
discounted cash outflows involved in the project is termed as
Correct Answer Discounted Pay
back period
Multiple Choice Multiple Answer
Question International financial
function of the organisation comprises of :
Correct Answer Study of flow of
funds beyond national boundaries , Exchange of currencies
Multiple Choice Multiple Answer
Question Advantages of the issue
of Bonus shares in the form of Dividend to the company are
Correct Answer Remedy for
undercapitalisation , Increase marketability of shares , Increase credit
standing of the company in the eyes of the lending financial institutions
Multiple Choice Single Answer
Question The formula for Fixed
assets turnover ratio is
Correct Answer Net Sales / Fixed
Assets
True/False
Question Earnings per share is
calculated as ( Profit after tax - Preference Dividend ) / Number of Equity
shares
Correct Answer TRUE
Select The Blank
Question In case of Mortgage,
the party who transfers the interest is called ________
Correct Answer Mortgager
Select The Blank
Question According to the provisions
of the companies Act 1956, ________ can declare the interim dividend
Correct Answer Board of
Directors
Multiple Choice Multiple Answer
Question Advantages of
Preference shares from shareholders point of view
Correct Answer For a corporate
investor, preference dividend income , It earns a stable dividend rate
Multiple Choice Multiple Answer
Question The shares of the
company can be bought back out of the following amounts
Correct Answer Free Reserves of
the company , Share Premium Account of the company , Proceeds of issue of any
shares or other specified securities
Multiple Choice Single Answer
Question The effect of Cash
collected from Debtors on the funds flow is that there will be
Correct Answer No effect on the
funds flow
Multiple Choice Single Answer
Question Receivable management
is also called as
Correct Answer Trade Credit
management
Select The Blank
Question The objective of the
management in the investment decisions is in the form of ________
Correct Answer maximisation of
the wealth of the shareholders
Select The Blank
Question The basic objective of
________ management is to reduce the operating cash requirement to the minimum
possible extent without affecting the routine transactions.
Correct Answer Cash
True/False
Question In Regular Stock
Dividend policy, the company may pay dividend in the form of bonus shares
instead of cash
Correct Answer TRUE
True/False
Question Return on Assets is a
ratio of relationship between Assets and Sales
Correct Answer FALSE
Multiple Choice Multiple Answer
Question Advantages of
Centralised disbursements
Correct Answer It increases the
transit time , Minimum cash balance can be maintained only in case of central
bank account instead of four different branches , To maintain the bank accounts
at different branches may prove to be administratively difficult
True/False
Question Interest in provision
for doubtful debts should be added back in order to find out cash from
operations
Correct Answer TRUE
Multiple Choice Single Answer
Question Which of the following
assets get generated during course of operations or get utilized within one
year
Correct Answer Current assets
Select The Blank
Question Sometimes the term
________ is interpreted as cash equivalent i.e. cash and marketable securities
Correct Answer Fund
True/False
Question In certain cases, the
capital expenditure may not involve any specific inflow of funds, but only
outflow of funds
Correct Answer TRUE
Multiple Choice Single Answer
Question The Capital Structure
decision mainly refers to the decision of
Correct Answer Financing
|
1. Capital
rationing
|
|
1. situation
where the company has more acceptable proposals requiring a greater amount of
funds
|
|
|
|
|
|
2. Problems relating to
situation of capital rationing
|
|
2. subjective
method
|
|
|
|
|
|
3. Informal method of
capital budgeting decision
|
|
3. Project
Indivisibility
|
|
|
|
|
|
4. Risk adjusting
discounting rate method of capital budgeting decision
|
|
4. discounting
rate is increased in case of projects involving greater risk
|
|
|
|
|
|
|
|
5. ratio between
total discounted cash inflows and total discounted cash outflows
|
|
|
|
|
|
|
|
6. indicates that
period within which the discounted cash inflows equal to the discounted cash
outflows
|
|
|
|
|
|
|
|
|
|
38 The 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 Capital
employed Turnover ratio is
|
|
|
|
|
|
1.61
|
|
|
|
2.25
|
|
|
|
1.02
|
|
|
|
0.96
|
|
|
|
|
|
|
Proprietory
|
|
|
|
Leverage
|
|
|
|
Criterion
|
|
|
|
Float
|
|
|
1. Increase
in liabilities
|
|
1. stability
of funds
|
|
|
|
|
|
2. Decrease
in liabilities
|
|
2. increases
working capital
|
|
|
|
|
|
3. Increase
in current assets
|
|
3. inflow
of funds
|
|
|
|
|
|
4. Increase
in current liabilities
|
|
4. decreases
working capital
|
|
|
|
|
|
|
|
5. cash
flow analysis
|
|
|
|
|
|
|
|
6. outflow
of funds
|
|
|
|
|
No comments:
Post a Comment