Accounting and Financial Management 34

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Objective Questions and Answers of MBA: Accounting and Financial Management 34

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 34

Part 34: Objective questions and answers of Accounting and Financial Management


Q1. The money markets deal with ______________.

a) Securities with a life of more than one year

b) Short-term securities

c) Securities such as common stock

d) None of the above


Q2. Insufficient working capital results in

a) Block of cash

b) Loosing interests

c) Lack of production

d) Lack of smooth flow of production


Q3. The time period required for the conversion of raw materials into finished goods

a) Operating cycle period

b) Inventory conversion period

c) Receivable conversion period

d) None


Q4. The gross working capital is a ______________ concern concept.

a) Going

b) Money measurement

c) Revenue concept

d) Cost concept


Q5. The policy concerning quarters of profit to be distributed as dividend is termed as ____________.

a) Profit policy

b) Dividend policy

c) Credit policy

d) Reserving policy


Q6. Which one of the following items is not generally used in preparing a statement of cash flows?

a) Adjusted trial balance

b) Comparative balance sheets

c) Current income statement

d) Additional information


Q7. Significant noncash transactions would not include

a) Conversion of bonds into common stock

b) Asset acquisition through bond issuance

c) Treasury stock acquisition

d) Exchange of plant assets


Q8. Authorized capital of a company is rs.5 lac, 40% of it is paid up. Loss incurred during the year is rs.50,000. Accumulated loss carried from last year is rs.2 lac. The company has a tangible net worth of

a) Nil

b) Rs.2.50 lac

c) (-) rs.50,000

d) Rs.1 lac


Q9. Which of the following ratios would be useful in assessing short-term liquidity?

a) Current ratio, inventory turnover, fixed asset turnover

b) Average collection period, debt ratio, return on assets

c) Current ratio, quick ratio, cash-flow liquidity ratio

d) Quick ratio, accounts receivable turnover, returns on assets


Q10. 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


Q11. An asset is a

a) Source of fund

b) Use of fund

c) Inflow of funds

d) None of the above


Q12. A very high current ratio indicates

a) High efficiency

b) Flabby inventory

c) Position of more long term funds

d) B or c


Q13. Which of the following are microeconomic variables that help define and explain the discipline of finance?

a) Risk and return

b) Capital structure

c) Inflation

d) All of the above


Q14. A company's ______________ is money owned to it by its customers.

a) Liquidity

b) Accounts receivable

c) Accounts payable

d) Inventory

e) Owners' equity


Q15. "share holder wealth" in a firm is represented by:

a) The number of people employed in the firm

b) The book value of the firm's assets less the book value of its liabilities

c) The amount of salary paid to its employees

d) The market price per share of the firm's common stock


Q16. Working capital management involves the financing and management of the assets of the firm.

a) Fixed

b) Total

c) Current

d) None of the above


Q17. The excess of current assets over current liabilities is known as

a) Gross working capital

b) Permanent working capital

c) Temporary working capital

d) Net working capital


Q18. Working capital is also known as ______________ capital.

a) Circulating

b) Fluctuating

c) Fixed

d) Going


Q19. Ordering cost is the cost of ______________ materials.

a) Selling

b) Purchasing

c) Stocking

d) Financing



Q20. The statement of cash flows

a) Must be prepared on a daily basis

b) Summarizes the operating, financing, and investing activities of an entity

c) Is another name for the income statement

d) Is a special section of the income statement


Part 34: Objective questions and answers of Accounting and Financial Management


Q1. Answer b


Q2. Answer d


Q3. Answer b


Q4. Answer b


Q5. Answer b


Q6. Answer a


Q7. Answer c


Q8. Answer c


Q9. Answer c


Q10. Answer c


Q11. Answer b


Q12. Answer d


Q13. Answer d


Q14. Answer b


Q15. Answer d


Q16. Answer c


Q17. Answer d


Q18. Answer b


Q19. Answer b


Q20. Answer b

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