Accounting and Financial Management 37

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Objective Questions and Answers of MBA: Accounting and Financial Management 37

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 37

Part 37: Objective questions and answers of Accounting and Financial Management

 

Q1. Finance is vital for which of the following business activity (activities) ?

a) Marketing research

b) Product pricing

c) Design of marketing and distribution channels

d) All of the given options

 

Q2. Long-term financing plans with low liquidity have:

a) High return and high risk

b) Moderate return and moderate risk

c) Low return and low risk

d) None of the above

 

Q3. The liability which should be paid within a period of one year is known as

a) Current asset

b) Current liability

c) Fixed asset

d) Variable asset

 

Q4. Short term sources are

a) Bank credit

b) Public deposit

c) Commercial papers

d) All of the above

 

Q5. The fixed proportion of working capital should be generally financed from the

______________ Capital sources.

a) Fixed

b) Variable

c) Semi-variable

d) Borrowed

 

Q6. The dividend-pay out ration is equal to

a) The dividend yield plus the capital gains yield

b) Dividends per share divided by earnings per share

c) Dividends per share divided by par value per share

d) Dividends per share divided by current price per share

 

Q7. Working capital management is managing

a) Long term assets

b) Short term assets and liabilities

c) Long term liabilities

d) Only short term assets

 

Q8. If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

a) Two cash effects can be netted and presented as one item in the investing activities section

b) Cash inflow and cash outflow should be reported separately in the investing activities section

c) Two cash effects can be netted and presented as one item in the financing activities section

d) Cash inflow and cash outflow should be reported separately in the financing activities section

 

Q9. Debt equity ratio is 3:1, the amount of total assets rs.20 lac, current ratio is 1.5:1 and owned funds rs.3 lac. What is the amount of current asset?

a) Rs.5 lac

b) Rs.3 lac

c) Rs.12 lac

d) None of the above

 

Q10. In the balance sheet amount of total assets is rs.10 lac, current liabilities rs.5 lac & capital & reserves are rs.2 lac .what is the debt equity ratio?

a) 1;1

b) 1.5:1

c) 2:1

d) None of the above

 

Q11. Which of the following statements is false?

a) No rules of thumb apply to the interpretation of financial ratios

b) Financial ratios can indicate areas of potential strength and weakness

c) Financial ratios are predictive

d) Financial ratios can serve as screening devices

 

Q12. In net profit ratio, the denominator is:

a) Net purchases

b) Net sales

c) Credit sales

d) Cost of goods sold

 

Q13. Which of the following is a measure of debt service capacity of a firm?

a) Current ratio

b) Acid test ratio

c) Interest coverage ratio

d) Debtors turnover

 

Q14. If a company issues bonus shares the debt equity ratio will

a) Remain unaffected

b) Will be affected

c) Will improve

d) None of the above

 

Q15. Quick assets do not include

a) Govt bond

b) Book debts

c) Advance for supply of raw materials

d) Inventories

 

Q16. Creditors would not be interested in which group of ratios ?

a) Solvency

b) Shareholder

c) Profitability

d) Capital structure

 

Q17. ______________ of a firm refers to the composition of its long -term funds and its capital structure:

a) Capitalization

b) Over capitalization

c) Under capitalization

d) Market capitalization

 

Q18. ______________ is how productively a firm utilizes its assets relative to its revenue and its profits.

a) Efficiency

b) Effectiveness

c) Stability

d) Liquidity

e) Profitability

 

Q19. Ratio analysis allows a firm to compare its performance to:

a) Other firms in the industry

b) Other time periods within the firm

c) Other industries

d) None of the above

 

Q20. The ability of a firm to convert an asset to cash is called ______________.

a) Liquidity

b) Solvency

c) Return

d) Marketability

 

Part 37: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer d

 

Q2. Answer b

 

Q3. Answer b

 

Q4. Answer d

 

Q5. Answer b

 

Q6. Answer b

 

Q7. Answer b

 

Q8. Answer b

 

Q9. Answer c

 

Q10. Answer d

 

Q11. Answer c

 

Q12. Answer b

 

Q13. Answer c

 

Q14. Answer c

 

Q15. Answer d

 

Q16. Answer b

 

Q17. Answer a

 

Q18. Answer a

 

Q19. Answer a

 

Q20. Answer a

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