Accounting and Financial Management 25

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Objective Questions and Answers of MBA: Accounting and Financial Management 25

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 25

Part 25: Objective questions and answers of Accounting and Financial Management

 

Q1. Stock split is a form of

a) Dividend payment

b) Bonus issue

c) Financial restructuring

d) Dividend in kind

 

Q2. Which of the following is not an element of credit policy?

a) Credit terms

b) Collection policy

c) Cash discount terms

d) Sales price

 

Q3. If the average balance of debtors has increased, which of the following might not show a change in general?

a) Total sales

b) Average payables

c) Current ratio

d) Bad debt loss

 

Q4. Cost of not carrying sufficient inventory is known as

a) Carrying cost

b) Holding cost

c) Total cost

d) Stock-out cost

 

Q5. In India, commercial papers are issued as per the guidelines issued by

a) Securities and exchange board of India

b) Reserve bank of India

c) Forward market commission

d) None of the above

 

Q6. Under the provisions of as-19 'leases', a leased asset is shown is the balance sheet of

a) Manufacturer

b) Lessor

c) Lessee

d) Financing bank

 

Q7. Financial decision involves;

a) Investment, financing and dividend decision

b) Investment, financing and sales decision

c) Financing, dividend and cash decision

d) None of these

 

Q8. Which of the following statements is correct?

a) A higher receivable turnover is not desirable

b) Interest coverage ratio depends upon tax rate

c) Increase in net profit ratio means increase in sales

d) Lower debt-equity ratio means lower financial risk

 

Q9. Capital budgeting decisions are based on:

a) Incremental profit

b) Incremental cash flows

c) Incremental assets

d) Incremental capital

 

Q10. Profitability index, when applied to divisible projects, impliedly assumes that:

a) Project cannot be taken in parts

b) Npv is linearly proportionate to part of the project taken up

c) Npv is additive in nature

d) Both (b) and (c)

 

Q11. Which of the following is not an objective of cash management?

a) Maximization of cash balance

b) Minimization of cash balance

c) Optimization of cash balance

d) Zero cash balance

 

Q12. Credit policy of a firm should involve a trade-off between increased

a) Sales and increased profit

b) Profit and increased costs of receivables

c) Sales and cost of goods sold

d) None of the above

 

Q13. Receivables management deals with

a) Receipts of raw materials

b) Debtors collection

c) Creditors management

d) Inventory management

 

Q14. Inventory holding cost may include

a) Material purchase cost

b) Penalty charge for default

c) Interest on loan

d) None of the above

 

Q15. A firm has inventory turnover of 6 and cost of goods sold is 7,50,000. With better inventory management, the inventory turnover is increased to 10. This would result in:

a) Increase in inventory by 50,000

b) Decrease in inventory by. 50,000

c) Decrease in cost of goods sold

d) Increase in cost of goods sold

 

Q16. The basic objective of tandon committee recommendations is that the dependence of industry on bank should gradually

a) Increase

b) Remain stable

c) Decrease

d) None of the above

 

Q17. For a lesser, a lease is a

a) Investment decision

b) Financing decision

c) Dividend decision

d) None of the above

 

Q18. Ratio of net income to number of equity shares known as:

a) Price earnings ratio

b) Net profit ratio

c) Earnings per share

d) Dividend per share

 

Q19. Capital budgeting deals with:

a) Long-term decisions

b) Short-term decisions

c) Both (a) and (b)

d) Neither (a) nor (b)

 

Q20. Evaluation of capital budgeting proposals is based on cash flows because:

a) Cash flows are easy to calculate

b) Cash flows are suggested by sebi

c) Cash is more important than profit

d) None of the above

 

Part 25: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer c

 

Q2. Answer d

 

Q3. Answer b

 

Q4. Answer d

 

Q5. Answer b

 

Q6. Answer c

 

Q7. Answer a

 

Q8. Answer d

 

Q9. Answer b

 

Q10. Answer d

 

Q11. Answer c

 

Q12. Answer b

 

Q13. Answer b

 

Q14. Answer d

 

Q15. Answer b

 

Q16. Answer c

 

Q17. Answer a

 

Q18. Answer c

 

Q19. Answer a

 

Q20. Answer c

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