Strategic Finance - 10

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Value based approach of HRA tracking can be divided into 2
categories - Non - monetary & monetary.
Correct Answer True
Your Answer False
True/False
Question The activity model is normally created by an activity Accountant.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Organisations have various records and reports from past
actions such as :-
Correct Answer Logs to record workflow , Specific costs , External and internal
audit reports
Your Answer Logs to record workflow , Specific costs , General studies and
processes
Select The Blank
Question In today's fast moving world, the quickest way to get information
on a firm is through ________.
Correct Answer Internet
Your Answer Internet
Select The Blank
Question The cost of facilities is usually included & distributed as
________.
Correct Answer Depreciation
Your Answer Fringe benefits
Multiple Choice Multiple Answer
Question The existence of significant influence by an investor is usually
evidenced in the following ways :-
Correct Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Your Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Multiple Choice Multiple Answer
Question The direct costs tier normally only includes the following :-
Correct Answer The personnel payroll , Supplies , Individual rental equipment
Your Answer The personnel payroll , Support costs , Supplies
Multiple Choice Multiple Answer
Question While accounting for human assets, the following data is to be
considered :-
Correct Answer Full time equivalent staff , Revenues , Expenses
Your Answer Full time equivalent staff , Expenses , Good will
Multiple Choice Multiple Answer
Question Accrued expenses represent :-
Correct Answer Costless financing , An interest free source of financing
Your Answer Costless financing , An interest free source of financing , Truly
discretionary financing
True/False
Question The accounting records serve as the major source of cost data.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Conservative policy for determining the requirements of current
assets is also known as :-
Correct Answer Flexible policy
Your Answer Aggressive policy
Multiple Choice Single Answer
Question When the working capital is less than its peak level :-
Correct Answer The surplus is invested in liquid assets
Your Answer The surplus is invested in liquid assets
True/False
Question optimum cash balance under certainty i.e. Baumul`s model
allows the cash flow to fluctuate.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question open account credit appears on the buyer's balance sheet as :-
Correct Answer Accounts payable
Your Answer Accounts receivables
Select The Blank
Question According to Altman (1984) total costs in percentage of the
market value of a firm range between ________
Correct Answer 12.1 % & 16.7 %
Your Answer less than 10 %
Multiple Choice Single Answer
Question According to a survey for reasons for share purchase, what is
the percentage of cash distribution to cash holders ?
Correct Answer 0.28
Your Answer 0.28
Select The Blank
Question ________ is not a characteristic of financial conglomerates.
Correct Answer Provide ineffective competitive process
Your Answer Provide ineffective competitive process
Multiple Choice Multiple Answer
Question The important steps involved in the analysis of mergers &
acquisitions are:-
Correct Answer Planning , Searching & screening , Financial evaluation
Your Answer Consultation with shareholders , Planning , Searching &
screening
Multiple Choice Multiple Answer
Question Trade credits are of the following types:-
Correct Answer Notes payable , Trade acceptances , Open accounts
Your Answer Notes payable , Trade acceptances , Commercial paper
True/False
Question The statute governing an enterprise may provide the basis for
computation of the depreciation.
Correct Answer True
Your Answer True
Select The Blank
Question The clean up period is usually ________ months.
Correct Answer 1 to 2 months
Your Answer 3 months
Multiple Choice Single Answer
Question Any addition or extension to an existing asset which retains a
separate identify & is capable of being used after the existing
asset is disposed of :-
Correct Answer Is depreciated independently
Your Answer Is depreciated along with the existing asset
Match The Following
Question Correct Answer Your Answer
Amount involved in buy
back
Not to exceed 25 % of the
total paid up capital
Authorize buy back of
securities
Articles of Association Authorize buy back of
securities
Not to exceed 25 % of the
total paid up capital
Board of Directors Resolution permitting the
buy back of shares
The ratio of debt to total
capital & free reserves
should be 1 : 1
Shares to be bought back Fully paid up Resolution permitting the
buy back of shares
Multiple Choice Single Answer
Question Acceptable audit requirements cannot be overlooked even under
the pressure of :-
Correct Answer Timeliness & turnaround
Your Answer Timeliness & turnaround
True/False
Question A long term investment is an investment other than a current
investment.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Book value of the assets is directly dependent on the accounting
policies followed by the company which is used in the following
areas :-
Correct Answer Booking depreciation , Methods of provisions , Inventory
valuation
Your Answer Booking depreciation , Methods of provisions , Inventory
valuation
Select The Blank
Question Identify disclosure on human resources as a societal concern &
prepare international regulations comes under ________
Correct Answer The compulsory method
Your Answer The voluntary market based method
Multiple Choice Multiple Answer
Question Walter's model on dividend relevance is based on the following
assumptions :-
Correct Answer Internal financing , Constant return and cost of capital , 100 Per
cent payout or retention
Your Answer Internal financing , Constant return and cost of capital , Perfect
markets
Multiple Choice Single Answer
Question When competition is high in the market, it is :-
Correct Answer Essential to maintain a larger inventory of finished goods
Your Answer Necessary that firms should have less working capital
requirement
Multiple Choice Single Answer
Question A manufacturing concern like a machine tool has :-
Correct Answer A long operating cycle
Your Answer Sells largely on cash basis
True/False
Question Decisions related to working capital are repetitive & frequent.
Correct Answer True
Your Answer True
Select The Blank
Question In many companies, there is no formal record of________.
Correct Answer Investment in employees
Your Answer Investment in employees
Select The Blank
Question Depreciation is ________ of an asset.
Correct Answer Loss of value
Your Answer Loss of value
Match The Following
Question Correct Answer Your Answer
Mortgage Pertains to immovable
properties
Duty of the bank to take
care of movable goods
Lien The bank has a right to
retain the goods belonging
to the company until the
debts due to the bank are
paid
The bank has a right to
retain the goods belonging
to the company until the
debts due to the bank are
paid
Hypothecation A charge against property
for an amount of debt
A lender does not keep
track of individual accounts
Pledge Duty of the bank to take
care of movable goods
Have high costs of
processing the collateral &
risk of fraud
Multiple Choice Multiple Answer
Question Significant influence is the power to :-
Correct Answer Participate in the financial decisions , Participate in the operating
policy decisions
Your Answer Participate in the financial decisions , Participate in the operating
policy decisions , Growth & diversify
Select The Blank
Question Stock repurchases ________ the debt / equity ratio.
Correct Answer Increases
Your Answer Increases
True/False
Question Organisational changes are similar to mission changes.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Where the management's estimate of the useful life of an asset
of the enterprise is shorter than that envisaged under the
provisions of the relevant statute, the depreciation provision is
approximately computed :-
Correct Answer By applying a higher rate
Your Answer By applying a lower rate
Select The Blank
Question An asset is included in segment assets, if and only if the related
depreciation or amortisation is included in ________.
Correct Answer Segment expense
Your Answer Segment revenue
Multiple Choice Multiple Answer
Question The support elements consists of important functions such as :-
Correct Answer Payroll , Accounting , Automatic data processing
Your Answer Payroll , Co-ordination , Accounting
Multiple Choice Single Answer
Question Cost benefit analysis is the simplest form of comparison between
:-
Correct Answer Ideas to determine which is faster, better or cheaper
Your Answer Value added & non value added activities
Multiple Choice Multiple Answer
Question Valuation methods are highly specific to the following for doing
the valuation :-
Correct Answer To the person , To the firm , To the Consultant
Your Answer To the person , To the firm , To the Consultant
Multiple Choice Single Answer
Question Arbitrage means :-
Correct Answer Securities cannot sell at different prices
Your Answer Selling a security
Select The Blank
Question Credit standards should be relaxed upon the point where
incremental returns ________ incremental costs.
Correct Answer Equals
Your Answer Have no correlation with
Multiple Choice Single Answer
Question Modigliani - Miller Theoram is based on :-
Correct Answer Perfect Capital Markets
Your Answer Perfect Capital Markets
True/False
Question Dividends increase the current returns for shareholders.
Correct Answer True
Your Answer False
True/False
Question When a company is able to assess an individual's worth, it helps
in increasing its own worth.
Correct Answer True
Your Answer True