Accounting and Financial Management 30

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Objective Questions and Answers of MBA: Accounting and Financial Management 30

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 30

Part 30: Objective questions and answers of Accounting and Financial Management

 

Q1. A firm's working capital consists of investment in

a) Current assets

b) Current liabilities

c) Short term assets

d) Both (a) and (c)

 

Q2. The most important item that can be extracted from financial statements is the actual

______________ of the firm.

a) Net working capital

b) Cash flow

c) Net present value

d) None of the given options

 

Q3. Short – term interest rates, in a normal economy, are generally ______________ than long – term rates.

a) Higher

b) The same

c) Lower

d) None of the above

 

Q4. An example of current liability

a) Creditors

b) Outstanding expenses

c) Provisions for depreciation

d) All

 

Q5. Long term sources are

a) Retained earnings

b) Debentures

c) Share capital

d) All of the above

 

Q6. The volume of sales is influenced by ______________ of a firm.

a) Finance policy

b) Credit policy

c) Profit policy

d) Fund policy

 

Q7. The difference between selling price and present book value of machinery is called

a) Capital income

b) Revenue income

c) Revenue receipt

d) Capital receipt

 

Q8. The category that is generally considered to be the best measure of a company's ability to continue as a going concern is

a) Cash flows from operating activities

b) Cash flows from investing activities

c) Cash flows from financing activities

d) Usually different from year to year

 

Q9. An asset is a

a) Source of fund

b) Use of fund

c) Inflow of funds

d) None of the above

 

Q10. What relationship exists between the average collection period and accounts receivable turnover?

a) Both ratios are expressed in number of days

b) Both ratios are expressed in number of times receivables are collected per year

c) As average collection period increases (decreases) the accounts receivable turnover decreases (increases)

d) There is a direct and proportional relationship

 

Q11. Financial management deals with two things — raising money and:

a) Operations management

b) Production management

c) Warehousing

d) Managing a company's finances

 

Q12. One of the limitations of the ______________ is that it is based on historical costs.

a) Income statement

b) Statement of cash flows

c) Balance sheet

d) None of the above

 

Q13. A firm's working capital consists of investment in

a) Current assets

b) Current liabilities

c) Short term assets

d) Both a & c

 

Q14. A series of activities in an organization related to production is known as

a) Operating cycle

b) Working cycle

c) Current cycle

d) Fixed cycle

 

Q15. Finance function is one of the most important functions of ______________ management.

a) Business

b) Marketing

c) Financial

d) Debt

 

Q16. Inventory management is essential because investments in stock are ______________.

a) High

b) Low

c) Medium

d) Fixed

 

Q17. The primary purpose of the statement of cash flows is to

a) Provide information about the investing and financing activities during a period

b) Prove that revenues exceed expenses if there is a net income

c) Provide information about the cash receipts and cash payments during a period

d) Facilitate banking relationships

 

Q18. Which of the following would be subtracted from net income using the indirect method?

a) Depreciation expense

b) An increase in accounts receivable

c) An increase in accounts payable

d) A decrease in prepaid expenses

 

Q19. Proprietary ratio is calculated by

a) Total assets/total outside liability

b) Total outside liability/total tangible assets

c) Fixed assets/long term source of fund

d) Proprietor funds/total tangible assets

 

Q20. Financial leverage means

a) Use of more debt capital to increase profit

b) High degree of solvency

c) Low bank finance

d) None of the above

 

Part 30: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer d

 

Q2. Answer b

 

Q3. Answer c

 

Q4. Answer d

 

Q5. Answer d

 

Q6. Answer d

 

Q7. Answer a

 

Q8. Answer a

 

Q9. Answer b

 

Q10. Answer c

 

Q11. Answer d

 

Q12. Answer c

 

Q13. Answer d

 

Q14. Answer a

 

Q15. Answer c

 

Q16. Answer a

 

Q17. Answer c

 

Q18. Answer b

 

Q19. Answer d

 

Q20. Answer a

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