MCQ on Advance Financial Management 1

COEP
Lets Crack Online Exam

Objective Questions and Answers of MBA: MCQ on Advance Financial Management 1

Subject: Objective Questions and Answers of MBA: MCQ on Advance Financial Management 1

Part 1: List for questions and answers of Advanced Financial Management

 

Q1. The definition ‘Management Accounting is the presentation of accounting information in such a way as to assist management in the creation of policy and the day-to-day operation of an undertaking

a) Ango-American Council on Productivity

b) AICPA

c) Robert N. Anthony

d) All of the above

 

Q2. Agency cost consists of

a) Binding

b) Monitoring

c) Opportunity and structure cost

d) All of the above

 

Q3. Finance Function comprises

a) Safe custody of funds only

b) Expenditure of funds only

c) Procurement of finance only

d) Procurement and effective use of funds

 

Q4. The objective of wealth maximization takes into account

a) Amount of returns expected

b) Timing of anticipated returns

c) Risk associated with uncertainty of returns

d) All of the above

 

Q5. Financial management mainly focuses on

a) Efficient management of every business

b) Brand dimension

c) Arrangement of funds

d) All elements of acquiring and using means of financial resources for financial activities

 

Q6. Liquid assets is determined by

a) Current assets – stock – Prepaid expenses

b) Current assets + stock + prepaid expenses

c) Current assets + Prepaid expenses

d) None of the above 

 

Q7. Which of the following is not included in current assets?

a) Debtors

b) Stock

c) Cash at bank

d) Cash in hand

 

Q8. Higher the ratio, the more favorable it is, doesn’t stand true for

a) Operating ratio

b) Liquidity ratio

c) Net profit ratio

d) Stock turnover ratio

 

Q9. The most precise test of liquidity is

a) Quick ratio

b) Current ratio

c) Absolute Liquid ratio

d) None of the above

 

Q10. Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs 60,000. Determine value of stock

a) Rs 54,000

b) Rs 60,000

c) Rs 1,62,000

d) None of the above

 

Q11. Collection of debtors

a) Decreases current ratio

b) Increases current ratio

c) Has no effect on current ratio

d) None of the above

 

Q12. Provision of taxation is treated as

a) As a current liability

b) As an appropriation of profits

c) Either a or b

d) None of the above 

 

Q13. As per accounting standard AS3, provision for taxation should be treated as

a) As a current liability

b) As an appropriation of profits

c) Either a or b

d) None of the above

 

Q14. The opening and closing balance of general reserves are Rs 10,000 and Rs 9,000, respectively. It is stated in addition information that a loss of Rs 1000 has been written off in general reserves. In such a case, decline in reserve and loss on investment will be adjusted in P and L account

a) True

b) False

 

Q15. Which of the following is not a cash inflow?

a) Decrease in debtors

b) Issue of shares

c) Decrease in creditors

d) Sale of fixed assets

 

Q16. Which of the following is not a cash outflow?

a) Increase in Prepaid expenses

b) Increase in debtors

c) Increase in stock

d) Increase in creditors

 

Q17. While preparing Marginal cost and Contribution Statement, if any factor of production is key factor then ________ should be expressed in terms of per unit of Key factor

a) Profit

b) Sales

c) Contribution

d) None of the above

 

Q18. Expression “supply and demand” was initially used by

a) Adam Smith

b) David Ricardo

c) John Locke’s

d) James Denham-Stuart 

 

Q19. Under supposition of ideal competition, supply is determined through

a) marginal cost

b) marginal revenue

c) marginal curve

d) supply curve

 

Q20. Which of the following principles should be followed while making a decision to drop a product/line?

a) Product yielding lowest contribution should be given top priority in production programme

b) A product line should be dropped, if it yields positive contribution

c) If any factor is key factor, the product/line should be dropped, which gives maximum contribution per unit of key factor

d) None of the above

 

Part 1: List for questions and answers of Advanced Financial Management

 

Q1. Answer: a

Q2. Answer: d

Q3. Answer: d

Q4. Answer: d

Q5. Answer: d

Q6. Answer: a

Q7. Answer: b

Q8. Answer: a

Q9. Answer: c

Q10. Answer: a

Q11. Answer: a

Q12. Answer: c

Q13. Answer: b

Q14. Answer: b

Q15. Answer: c

Q16. Answer: d

Q17. Answer: c

Q18. Answer: d

Q19. Answer: a

Q20. Answer: a