LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question When a company issues bonus shares ________ of the company get reduced
Correct Answer Reserves
Your Answer Reserves
Match The Following
Question Correct Answer Your Answer
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
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
Select The Blank
Question The fixed assets are expressed at ________
Correct Answer Cost - Depreciation
Your Answer Cost - Depreciation
Select The Blank
Question Financial Statement is useful to ________ in order to enable to decide whether to retain the investment in the company
Correct Answer Shareholders
Your Answer Shareholders
Multiple Choice Single Answer
Question Earnings per share is calculated as
Correct Answer ( Profit after tax - Preference Dividend ) / No. of equity shares
Your Answer ( Profit after tax - Preference Dividend ) / No. of equity shares
Multiple Choice Single Answer
Question The main function of finance under the traditional approach comprises of
Correct Answer Procurement of funds
Your Answer Procurement of funds
Select The Blank
Question In case of Mortgage, the party in whose favour the interest is so transferred is called ________
Correct Answer Mortgagee
Your Answer Mortgagee
Multiple Choice Multiple Answer
Question The following techniques can be used to delay cash payments
Correct 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
Your 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
True/False
Question If Average credit period works out to be more than the Normal credit period, it indicates efficiency on the part of collection department of the company in collecting the dues from the customers
Correct Answer False
Your Answer False
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
Your Answer Company Law board
Multiple Choice Single Answer
Question How many days in a year are to be considered for the calculation of daily sales
Correct Answer 360
Your Answer 360
True/False
Question Wealth maximization goal is only an extension of Profit maximization goal of the organisation
Correct Answer True
Your Answer True
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 Internal rate of return considers time value of money
Correct Answer True
Your Answer True
True/False
Question Reorder level is calculated as Maximum Lead Time * Minimum Usage
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question Floor rate is
Correct Answer the minimum rate of interest payable by the company on the bonds even is the base rate falls below a certain limit
Your Answer the minimum rate of interest payable by the company on the bonds even is the base rate falls below a certain limit
Multiple Choice Single Answer
Question The symptom of large inventory accumulation in anticipation of price rise in future will be indicated by
Correct Answer Inventory turnover ratio
Your Answer Inventory turnover ratio
True/False
Question Current ratio and Acid test ratio are categorised under liquidity group
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The Purpose of cash budget is
Correct Answer to co-ordinate the timings of cash needs , It pinpoints the period when there is likely to be excess cash , it helps to arrange needed funds on the most favourable terms and prevents the accumulation of excess funds
Your Answer to co-ordinate the timings of cash needs , It pinpoints the period when there is likely to be excess cash , it helps to arrange needed funds on the most favourable terms and prevents the accumulation of excess funds
Multiple Choice Single Answer
Question Current assets are also referred to as
Correct Answer Working Capital
Your Answer Working Capital
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
Your Answer Existing as well as potential competitors in the industry , Market position of the company
Multiple Choice Multiple Answer
Question Assuming the current ratio is 2, in which cases would the current ratio decline
Correct Answer Purchase of fixed Assets , Borrow Money on an Interest bearing promissory note
Your Answer Purchase of fixed Assets , Borrow Money on an Interest bearing promissory note
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
Your Answer Composite cost
Multiple Choice Single Answer
Question The mix of sources from which the long term funds required by a business are raised is termed as
Correct Answer Capital Structure
Your Answer Capital Structure
Multiple Choice Single Answer
Question Revenue reserves represents
Correct Answer Accumulated retained earnings from the profits of normal business operations
Your Answer Accumulated retained earnings from the profits of normal business operations
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
Your Answer Non-consideration of sales invoices , Under-valuation of closing stock , Improper utilisation of infrastructural facilities
Multiple Choice Multiple Answer
Question The cost of managing inventory includes
Correct Answer Ordering cost , Carrying cost
Your Answer Ordering cost , Carrying cost
True/False
Question Projects for venture capital financing are more risky in nature and involve larger gestation period
Correct Answer True
Your Answer True
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
Your Answer Increase tax liability of the company , Demand of the employees to increase wages
Multiple Choice Multiple Answer
Question Utility of cash flow analysis
Correct Answer Helps in efficient cash management , helps in internal financial management , Discloses the movements of cash
Your Answer Helps in efficient cash management , helps in internal financial management , Discloses the movements of cash
Multiple Choice Single Answer
Question The traditional approach to financial management refers only to the procurement of funds by
Correct Answer Corporate entity
Your Answer Corporate entity
Select The Blank
Question ________ is calculated on the basis of current profits and not on the basis of retained profits
Correct Answer Earnings per share
Your Answer Earnings per share
Multiple Choice Single Answer
Question The effect of Purchase of machinery by issue of debentures on the funds flow is that there will be
Correct Answer No effect on the funds flow
Your Answer No effect on the funds flow
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
Your Answer the importer can bargain for better trading terms , he is assured to get proper supply of the goods
Multiple Choice Multiple Answer
Question The Economic Order Quantity model is based on the assumption of
Correct Answer Placing 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 year
Your Answer Placing 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 year
Multiple Choice Single Answer
Question An organized collection of data according to logical and consistent accounting procedure is known as
Correct Answer Financial Statement
Your Answer Financial Statement
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
Your Answer Life of the project cannot be estimated accurately , Cash inflows cannot be eatimated accurately , Difficulties in deciding the cost of capital
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
Your 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
Select The Blank
Question Operating Lease is also referred to as ________ lease
Correct Answer Service
Your Answer Service
Multiple Choice Single Answer
Question The lending Bank does not commit any physical outflow of funds in a
Correct Answer Non-Fund based lending
Your Answer Non-Fund based lending
True/False
Question The assumptions of capital structure theories is that Operating earnings are not expected to grow
Correct Answer True
Your Answer True
Select The Blank
Question According to the provisions of the companies Act 1956, ________ can declare the interim dividend
Correct Answer Board of Directors
Your Answer Board of Directors
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
Your Answer Bonneville and Dewey
True/False
Question Accounts Receivable is an example of current assets
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The amount of cheques deposited by a Bank awaiting clearance is called
Correct Answer Collection float
Your Answer Collection float
Select The Blank
Question In financial terms, the operating profit earned by the company is also referred to as ________
Correct Answer Profit before Interest and Taxes
Your Answer Profit before Interest and Taxes
Select The Blank
Question Depreciation is sometimes treated as ________ funds
Correct Answer source
Your Answer source
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