Accounting and Financial Management 38

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Objective Questions and Answers of MBA: Accounting and Financial Management 38

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 38

Part 38: Objective questions and answers of Accounting and Financial Management

 

Q1. The management of current assets is known as

a) Current asset management

b) Working capital management

c) Both a & b

d) None

 

Q2. Above permanent working capital which is required by the firm is knows as

a) Gross working capital

b) Permanent working capital

c) Temporary working capital

d) Net working capital

 

Q3. The rate of return on investment ______________ with the shortage of working capital

a) Falls

b) Going

c) Constant

d) Change

 

Q4. If capital expense is recorded as revenue expense then which calculation will be wrong ?

a) Bank balance

b) Debtors

c) Creditors

d) Net profit

 

Q5. If a company reports a net loss, it

a) May still have a net increase in cash

b) Will not be able to pay cash dividends

c) Will not be able to get a loan

d) Will not be able to make capital expenditures

 

Q6. In preparing a statement of cash flows, a conversion of bonds into common stock will be reported in

a) The financing section

b) The "extraordinary" section

c) A separate schedule or note to the financial statements

d) The stockholders' equity section

 

Q7. In last year the current ratio was 3:1 and quick ratio was 2:1. Presently current ratio is 3:1 but quick ratio is 1:1. This indicates comparably

a) High liquidity

b) Higher stock

c) Lower stock

d) Low liquidity

 

Q8. What does a decreasing inventory turnover ratio usually indicate about a rirm?

a) The firm is selling more inventories

b) The firm is managing its inventory we//

c) The firm is inefficient in the management of inventory

d) Both (a) and (b)

 

Q9. In ratio analysis, the term capital employed refers to:

a) Equity share capital

b) Net worth

c) Shareholders' funds

d) None of the above

 

Q10. Xyz ltd. Has earned 8% return on total assets of rs. 50,00,000 and has a net profit ratio of 5%. Find out the sales of the firm

a) Rs. 4,00,000

b) Rs. 2,50,000

c) Rs. 80,00,000

d) Rs. 83,33,333

 

Q11. 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

 

Q12. Financial decision involves;

a) Investment, financing and dividend decision

b) Investment, financing and sales decision

c) Financing, dividend and cash decision

d) None of these

 

Q13. Which of the followings is return paid to shareholders out of profit of a company?

a) Profit

b) Dividend

c) Bonus shares

d) Ex-gratia

 

Q14. Planning for future growth is called:

a) Capital budgeting

b) Working capital management

c) Financial forecasting

d) None of the above

 

Q15. An example of current asset

a) Cash

b) Debtors

c) Marketable securities

d) All

 

Q16. Which of the following would be added to net income using the indirect method?

a) An increase in accounts receivable

b) An increase in prepaid expenses

c) Depreciation expense

d) A decrease in accounts payable

 

Q17. Which of the following tools and techniques are the most useful to the financial statement analyst?

a) Public relations material and pro forma statements prepared by the firm

b) Common size financial statements and financial ratios

c) The letter to the shareholders and a map

d) None of the above

 

Q18. Which of the following statements is correct?

a) A higher receivable turnover is not desirable

b) Interest coverage ratio depends upon tax rate

c) Increase in net profit ratio means increase in sales

d) Lower debt-equity ratio means lower financial risk

 

Q19. The regular funds invested in the working capital known as

a) Net working capital

b) Fixed working capital

c) Temporary working capital

d) Gross working capital

 

Q20. In his traditional role the finance manager is responsible for ______________.

a) Arrange of utilization of funds

b) Arrangement of financial resources

c) Acquiring capital assets of the organization

d) Effective management of capital

 

Part 38: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer c

 

Q2. Answer c

 

Q3. Answer b

 

Q4. Answer d

 

Q5. Answer a

 

Q6. Answer c

 

Q7. Answer b

 

Q8. Answer c

 

Q9. Answer d

 

Q10. Answer c

 

Q11. Answer d

 

Q12. Answer a

 

Q13. Answer b

 

Q14. Answer c

 

Q15. Answer d

 

Q16. Answer c

 

Q17. Answer b

 

Q18. Answer d

 

Q19. Answer d

 

Q20. Answer d

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