Accounting and Financial Management 29

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Objective Questions and Answers of MBA: Accounting and Financial Management 29

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 29

Part 29: Objective questions and answers of Accounting and Financial Management

 

Q1. The term capital structure denotes:

a) Total of liability side of balance sheet

b) Equity funds, preference capital and long term debt

c) Total shareholder equity

d) Types of capital issued by a company

 

Q2. Which combination is generally good for firms?

a) High ol, high fl

b) Low ol, low fl

c) High ol, low fl

d) None of these

 

Q3. Trading on equity is

a) Always beneficial

b) May be beneficial

c) Never beneficial

d) None of the above

 

Q4. Which of the following is true of net income approach?

a) Vf = ve+vd

b) Ve = vf+vd

c) Vd = vf+ve

d) Vf = ve-ve

 

Q5. In mm model with taxes, where 'r' is the interest rate, ‘d’ is the total debt and 't' is tax rate, then present valued shields would be:

a) R×d×t

b) R×d

c) D×t

d) (d× r)/(l-t)

 

Q6. Mm model argues that dividend is irrelevant as

a) The value of the firm depends upon earning power

b) The investors buy shares for capital gain

c) Dividend is payable after deciding the retained earnings

d) Dividend is a small amount

 

Q7. Dividend payout ratio is

a) Pat÷ capital

b) Dps ÷ eps

c) Pref. Dividend ÷ pat

d) Pref. Dividend ÷ equity dividend

 

Q8. Cash budget does not include

a) Dividend payable

b) Postal expenditure

c) Issue of capital

d) Total sales figure

 

Q9. Marketable securities are primarily

a) Equity shares,'

b) Preference shares

c) Fixed deposits with companies

d) Short-term debt investments

 

Q10. Payment to creditors is a manifestation of cash held for:

a) Transactionery motive

b) Precautionary motive

c) Speculative motive

d) All of the above

 

Q11. Eoq is the quantity that minimizes

a) Total ordering cost

b) Total inventory cost

c) Total interest cost

d) Safety stock level

 

Q12. Which of the following is not a standard method of inventory valuation?

a) First in first out

b) Standard cost

c) Average pricing

d) Realizable value

 

Q13. In lease system, interest is calculated on

a) Cash down payment

b) Cash price outstanding

c) Hire purchase price

d) None of the above

 

Q14. In risk-adjusted discount rate method, the normal rate of discount is:

a) Increased

b) Decreased

c) Unchanged

d) None of the above

 

Q15. Suppliers and creditors of a firm are interested in

a) Profitability position

b) Liquidity position

c) Market share position

d) Debt position

 

Q16. Financial break-even level of ebit is one at which:

a) Eps is one

b) Eps is zero

c) Eps is infinite

d) Eps is negative

 

Q17. The aftertax cost of debt is expressed:

a) Kd = y/k(1-t)

b) Kd = y(1-t)

c) K = (1-t)/y

d) K = y

 

Q18. ______________ is concerned with the acquisition, financing and management of assets with some overall goal in mind.

a) Financial management

b) Profit maximisation

c) Agency theory

d) Social responsibility

 

Q19. Financial management deals with two things:

a) Operations management and procurement

b) Warehousing and managing a company's finances

c) Raising money and managing a company's finances

d) Marketing and production management

 

Q20. A company's ______________ is its merchandise, raw materials, and products waiting to be sold.

a) Inventory

b) Liquidity

c) Accounts receivable

d) Accounts payable

e) Owners' equity

 

Part 29: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer b

 

Q2. Answer c

 

Q3. Answer b

 

Q4. Answer a

 

Q5. Answer c

 

Q6. Answer a

 

Q7. Answer b

 

Q8. Answer d

 

Q9. Answer d

 

Q10. Answer a

 

Q11. Answer a

 

Q12. Answer c

 

Q13. Answer b

 

Q14. Answer a

 

Q15. Answer b

 

Q16. Answer b

 

Q17. Answer b

 

Q18. Answer a

 

Q19. Answer c

 

Q20. Answer a

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