Accounting and Financial Management 33

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Objective Questions and Answers of MBA: Accounting and Financial Management 33

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 33

Part 33: Objective questions and answers of Accounting and Financial Management


Q1. Financial management involves decisions about which of the following:

a) Which projects to fund

b) How to minimize taxation

c) What type of capital should be raised

d) All of these


Q2. If interest expenses for a firm rise, we know that the firm has taken on more ________

a) Financial leverage

b) Operating leverage

c) Fixed assets

d) None of the above


Q3. The investment in total current assets is known as

a) Gross working capital

b) Permanent working capital

c) Temporary working capital

d) Net working capital


Q4. Financial management is mainly concerned with ______________.

a) Arrangement of funds

b) All aspects of acquiring and utilizing financial resources for firm's activities

c) Efficient management of every business

d) Profit maximization


Q5. Which of the following is not a function performed by a financial system?

a) Savings function

b) Liquidity function

c) Risk function

d) Social function


Q6. Capital budgeting is related to

a) Long term assets

b) Short term assets

c) Long term and short term assets

d) Fixed assets


Q7. The order of presentation of activities on the statement of cash flows is

a) Operating, investing, and financing

b) Operating, financing, and investing

c) Financing, operating, and investing

d) Financing, investing, and operating


Q8. In the balance sheet of a firm, the debt equity ratio is 2:1. The amount of long term sources is rs.12 lac. What is the amount of tangible net worth of the firm?

a) Rs.12 lac

b) Rs.8 lac

c) Rs.4 lac

d) Rs.2 lac


Q9. Quick assets do not include

a) Govt. Bond

b) Book debts

c) Advance for supply of raw materials

d) Inventories


Q10. Accounting ratios are important tools used by

a) Managers

b) Researchers

c) Investors

d) All of the above


Q11. Debt to total assets of a firm is .2. The debt to equity ratio would be:

a) 0.80

b) 0.25

c) 1.00

d) 0.75


Q12. Current ratio of a concern is 1,its net working capital will be

a) Positive

b) Negative

c) Nil

d) None of the above


Q13. Which of the following is not a category of ratios?

a) Profitability

b) Management

c) Efficiency

d) Solvency


Q14. Which of the following is not identified as one of the four main financial objectives of a firm?

a) Profitability

b) Liquidity

c) Efficiency

d) Timeliness


Q15. ______________ depict relationships between items on a firm's financial statements.

a) Financial proportions

b) Fiscal relations

c) Financial ratios

d) Fiscal proportions


Q16. Who of the following make a broader use of accounting information?

a) Accountants

b) Financial analysts

c) Auditors

d) Marketers


Q17. Excess working capital results in

a) Block of cash

b) Loosing interests

c) Lack of production

d) Lack of smooth flow of production


Q18. The time period required to convert the credit sales into cash

a) Operating cycle period

b) Inventory conversion period

c) Receivable conversion period

d) None


Q19. Factoring is a form of financing ______________.

a) Payable

b) Receivables

c) Borrowings

d) Debts


Q20. Which one of the following is capital expenditure?

a) Capital invested by owner

b) Selling expense for machine

c) Machine purchased

d) Daily expense to operate business


Part 33: Objective questions and answers of Accounting and Financial Management


Q1. Answer d


Q2. Answer a


Q3. Answer a


Q4. Answer b


Q5. Answer d


Q6. Answer a


Q7. Answer a


Q8. Answer b


Q9. Answer d


Q10. Answer d


Q11. Answer b


Q12. Answer c


Q13. Answer b


Q14. Answer d


Q15. Answer c


Q16. Answer b


Q17. Answer a


Q18. Answer c


Q19. Answer c


Q20. Answer c

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