Chapter: Financial Management
1.

The objective of financial management is –

A. To ensure optimum utilization of funds
B. To ensure human capital development
C. To ensure safety on investment
D. All the above
Answer» D. All the above
2.

Which of the following is not a source of income of educational institutions?

A. Land grants and endowments
B. Government grants
C. Loan from banks
D. Student fees
Answer» C. Loan from banks
3.

Financial management is concernrd with –

A. profit and loss
B. procurement and utilization of funds
C. loan from banks
D. sound investment
Answer» B. procurement and utilization of funds
4.

Educational finance aims at seeing that the money for education is spent most -

A. judiciously & productively
B. appropriately & adequately
C. effectively & efficiently
D. none of the above
Answer» A. judiciously & productively
5.

The main source of income of educational institutions is –

A. Student fees
B. Gifts & donations
C. Government funds
D. All the above
Answer» C. Government funds
6.

Public funds include money recieved from –

A. central government
B. state government
C. local government
D. All the above
Answer» D. All the above
7.

In ancient and medieval India, education was mainly financed by –

A. Endowments
B. Land grants
C. Donations
D. Gifts & Bequests
Answer» A. Endowments
8.

Educational cess levied by local bodies may be in the form of a –

A. land revenue tax
B. tax on houses/building tax
C. both of the above
D. none of the above
Answer» C. both of the above
9.

The biggest problem in educational finance is –

A. Maintenance of normal services
B. constitutional provisions
C. political factors
D. system of administration
Answer» A. Maintenance of normal services
10.

Which is not a major factor affecting financial allocations?

A. Economic development
B. Socio-cultural environment
C. Expansion of educational facilities
D. Developmental Policies
Answer» C. Expansion of educational facilities
11.

“Financial Management is an area of financial decision-making, harmonising individual motives and enterprise goals”. Who said this?

A. Weston Brigham
B. Howard & Upton
C. Solomon
D. Taylor
Answer» A. Weston Brigham
12.

“Financial Management is the application of general managerial principles to the area of financial decision-making”. Who said this?

A. Weston Brigham
B. Howard & Upton
C. Solomon
D. Taylor
Answer» B. Howard & Upton
13.

“Financial Management is concerned with the efficient use of an important economic resource, namely, capital funds”. Who said this?

A. Weston Brigham
B. Howard & Upton
C. Solomon
D. Taylor
Answer» C. Solomon
14.

“Financial Management is concerned with the procurement of funds and their effective utilization in business”. Who said this?

A. SC Kuchhal
B. S.N Maheshwari
C. S.K Mangal
D. Choudhury
Answer» A. SC Kuchhal
15.

“Financial Management is concerned with raising finances and their effective utilization towards achieving organisational goals”. Who said this?

A. SC Kuchhal
B. S.N Maheshwari
C. S.K Mangal
D. Choudhury
Answer» B. S.N Maheshwari
16.

Educational needs are related to the -

A. size of the population
B. social change
C. economic and political development
D. all the above
Answer» D. all the above
17.

Sound financial planning includes –

A. decisions about revenue, cost and economy
B. budget administration
C. financial relationships among various agencies
D. all the above
Answer» D. all the above
18.

The roots of educational finance are found in basic disciplines like -

A. statistics
B. economics and political science
C. law and taxation
D. all the above
Answer» D. all the above
19.

The sources of income for education may be broadly classified into -

A. Public and Private funds
B. Government and Non – government funds
C. Both of the above
D. None of the above
Answer» A. Public and Private funds
20.

Public funds may be in the form of -

A. grants
B. subsidies
C. subventions
D. all the above
Answer» D. all the above
21.

The various kinds of fees charged to students include -

A. tuition fee
B. library and laboratory fee
C. magazine and games fee
D. all the above
Answer» D. all the above
22.

Sums of money where the principles are maintained intact and only the income from the interest on the principal are consumed is called -

A. Land grants
B. Bequests
C. Endowments
D. Philantropic trust
Answer» C. Endowments
23.

The essential aspects of educational finance include changes in -

A. targets and policies
B. procedures
C. administration
D. all the above
Answer» D. all the above
24.

Some of the main problems faced in financing education are –

A. expanding educational facilities
B. expanding educational services
C. lack of priorities
D. all the above
Answer» D. all the above
25.

Which is a major factor affecting financial allocations?

A. Unequal distribution of wealth
B. Population mobility
C. Constitutional Provisions
D. Low level of national income
Answer» C. Constitutional Provisions
26.

The main elements of traditional approach to financial management are -

A. Institutional sources of finance
B. Issue of financial devices to collect refunds from capital market
C. Accounting and legal relationship between source of finance and business
D. all the above
Answer» D. all the above
27.

The main elements of modern approach to financial management are -

A. evaluation of alternative fund utilization
B. capital budgeting
C. financial planning
D. all the above
Answer» D. all the above
28.

The critical decisions to be taken under modern approach to financial management are -

A. investment decision
B. financing decision
C. dividend decision
D. all the above
Answer» D. all the above
29.

Which is a function of financial management?

A. tax planning
B. management of provident funds
C. securities and social insurance funds
D. all the above
Answer» D. all the above
30.

Which is not a scope of financial management?

A. financial investment
B. financial control
C. financial supervision
D. financial planning
Answer» A. financial investment
31.

The nature of financial management is concerned with -

A. functions and goals of the institution
B. procedural aspects
C. relation with other subsystems
D. all the above
Answer» D. all the above
32.

Financial management essentially involves -

A. risk-return trade off
B. types of assets
C. investment decisions
D. all the above
Answer» D. all the above
33.

Financial management affects the -

A. survival of the firm
B. growth of the firm
C. vitality of the firm
D. survival, growth and vitality of the firm
Answer» D. survival, growth and vitality of the firm
34.

Financial management is needed due to –

A. acquisition and proper use of funds
B. improve profitability
C. increase value of the firm/institution
D. all the above
Answer» D. all the above
35.

Proper allocation and utilization of funds leads to -

A. improvement of operational efficiency
B. improvement of profitability
C. increase value of the firm/institution
D. all the above
Answer» D. all the above
36.

Improving profitability depends on -

A. promoting savings
B. proper and effective use of funds
C. increasing value of the firm
D. acquisition of funds
Answer» B. proper and effective use of funds
37.

The ultimate aim of any business concern is -

A. increase the wealth of the investors
B. maximize the wealth of the firm
C. increase the value of the firm
D. optimize the profit of the firm
Answer» C. increase the value of the firm
38.

Acquisition of funds is determined by certain features such as -

A. philosophy of the institute
B. vision and goals of the institute
C. competitive environment
D. all the above
Answer» D. all the above
39.

Factors affecting allotment of funds include -

A. availability of funds
B. needs of various departments or services
C. nature of activity undertaken
D. all the above
Answer» D. all the above
40.

Other sources of getting money to finance education include -

A. donations, bequests and gifts
B. interests on bank balances and securities
C. rent from buildings
D. all the above
Answer» D. all the above
41.

Which one of the following is the main source of income for educational organisation?

A. Fees from the students
B. Endowments and land grants
C. Donations
D. All of the above
Answer» D. All of the above
42.

Major factors that influences educational finance is

A. Removal of disparities in educational opportunities
B. Maintenance of normal service
C. Demand for education
D. Unemployment of youth
Answer» A. Removal of disparities in educational opportunities
43.

“Finance is the art and science of managing money”.Who says this?

A. Lawrence J. Gitman
B. Taylor
C. Hawthorne
D. Elton
Answer» A. Lawrence J. Gitman
44.

Which one of the following is not the objective of financial management?

A. To ensure human capital development
B. To ensure adequate returns to the shareholders
C. To ensure optimum fund utilisation
D. To ensure safety on investment
Answer» A. To ensure human capital development
45.

Financial management is concerned with

A. Profit and loss of the organisation
B. Procurement and utilisation of funds
C. Loan from banks
D. Exchange of money with other countries
Answer» B. Procurement and utilisation of funds
46.

Which one of the following is not a source of income for educational organisation?

A. Land grants and endowments
B. Government funds
C. Loan from State Bank of India
D. Fees from the students
Answer» C. Loan from State Bank of India
47.

The success of any business organisation depends on the

A. Knowledge of the workers
B. Provision of sufficient money
C. Geographical area
D. Road contributions
Answer» A. Knowledge of the workers
48.

The main source of income of the educational institution is received from

A. The Village Community
B. The United Nation
C. The State Government
D. The fee of students
Answer» D. The fee of students
49.

Under centralised management, authority and powers rest in a/an

A. Local body
B. Autonomous body
C. Central body
D. None of the above
Answer» C. Central body
50.

“Shareholder 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
Answer» D. The market price per share of the firm’s common stock
51.

The objective of financial management is to:

A. Maximize earnings per share
B. Maximize the value of the firm’s common stock
C. Maximize return on investment
D. Maximize market share
Answer» C. Maximize return on investment
52.

“Financial management is that activity of management which is concerned with the planning, procuring and controlling of the firm’s financial resources”. Who says this?

A. Weston and Brigham
B. J.F. Bradlery
C. Deepika& Maya Rani
D. Ezra Solomon
Answer» C. Deepika& Maya Rani
53.

“Financial management is an area of financial decision making, harmonizing individual motives and enterprise goals”. Who define this?

A. J.F. Bradlery
B. Ezra Solomon
C. Deepika& Maya Rani
D. Weston and Brigham
Answer» D. Weston and Brigham
54.

“Financial management is the area of business management devoted to a judicious use of capital and a careful selection of sources of capital in order to enable a business firm to move in the direction of reaching its goals” Who says this?

A. Guthman and Dougal
B. Weston and Brigham
C. J.F. Bradlery
D. Deepika& Maya Rai
Answer» C. J.F. Bradlery
55.

“Financial management is properly viewed as an integral part of overall management rather than as a staff specially concerned with funds raising operations”.

A. Deepika& Maya Rai
B. J.F. Bradlery
C. Guthman and Dougal
D. Ezra Solomon
Answer» C. Guthman and Dougal
56.

“The activity concerned with the planning, raising, controlling and administering of funds used in the business”. Who defines this?

A. Ezra Solomon
B. J.F. Bradlery
C. Guthman and Dougal
D. Weston Brigham
Answer» D. Weston Brigham
57.

The most common cause of financial problems are:

A. Undercapitalization
B. Inadequate expense control
C. Credit terms
D. All of the above
Answer» D. All of the above
58.

A statement that projects management’s expectations for revenues and, based on those financial expectations, allocates the use of specific resources throughout the firm is called:

A. Capital budget
B. Operating budget
C. Cash budget
D. Resource budget
Answer» D. Resource budget
59.

An example of fixed asset is

A. Live stock
B. Value stock
C. Income stock
D. All of the above
Answer» A. Live stock
60.

The total cost that arises when the quantity produced is increased by one unit is called

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
Answer» B. The book value of the firm’s assets less the book value of its liabilities
61.

______ varies inversely with profitability.

A. Liquidity
B. Risk
C. Financing
D. Liabilities
Answer» A. Liquidity
62.

_________ of a firm refers to the composition of its long term funds and its capital structure.

A. Capitalisation
B. Over-capitalistion
C. Under-capitalisation
D. Market capitalisation
Answer» A. Capitalisation
63.

In finance, “working capital” means the same thing as

A. Total assets
B. Fixed assets
C. Current assets
D. Current assets minus current liabilities
Answer» C. Current assets
64.

Which of the following would be consistent with a more aggressive approach to financing working capital

A. Financing short term needs with short term funds
B. Financing permanent inventory build up with long term debt
C. Financing seasonal needs with short term funds
D. Financing some long term needs with short term funds
Answer» D. Financing some long term needs with short term funds
65.

Which of the following is not the responsibility of financial management?

A. Allocation of funds to current and capital assets
B. Obtaining the best mix of financing alternatives
C. Preparation of the firm’s accounting statements
D. Development of an appropriate dividend policy
Answer» C. Preparation of the firm’s accounting statements
66.

Uses of funds include a(an):

A. Decrease in cash
B. Increase in any liability
C. Tax refund
D. Increased in fixed assets
Answer» C. Tax refund
67.

A capital investment is one that

A. Has the prospect of long term benefits
B. Has the prospect of short term benefits
C. Is only undertaken by large corporations
D. Applies only to investment in fixed assets
Answer» A. Has the prospect of long term benefits
68.

Which one of the following factors that influence educational finance?

A. Demand for education
B. Financial control
C. Concentration of wealth
D. Level of national income
Answer» A. Demand for education
69.

The main problem of financing a scheme of post-secondary education that faced with serious difficulties

A. expansion of educational services
B. Removal of disparities in educational opportunities
C. Inadequacy of funds
D. None of the above
Answer» C. Inadequacy of funds
70.

Modern industrial development has caused________

A. Private enterprise
B. Economic imbalances
C. Social change
D. Economic contribution
Answer» B. Economic imbalances
71.

The control of________ is a very important problem because ‘power follows the purse’ and this power may be easily misused

A. Economy
B. Population
C. Government
D. Finance
Answer» D. Finance
72.

Economists believe in the law of diminishing marginal utility’. This ‘utility’ means

A. Ability
B. Efficiency
C. Satisfaction
D. Reduction
Answer» C. Satisfaction
73.

Efficiency can be much improved if there is only a________ planning.

A. Short term and long term
B. Short term
C. Long term
D. None of the above
Answer» C. Long term
74.

It has been decided that______ of schooling will be made available to majority of our youth

A. 12 years
B. 10 years
C. 5 years
D. None of the above
Answer» A. 12 years
75.

To solve the problem of mobility of population and overcrowding in the cities the government has to adopt

A. Appropriate measures both at the economic and educational levels
B. Evolving a new finance structure in which the Central government will have to play significant role
C. Maintenance of a high level of national income
D. Financing of education
Answer» A. Appropriate measures both at the economic and educational levels
76.

Which one is not educational finances needed for purposes in education?

A. Maintenance of normal educational services
B. Expansion of educational services
C. Expansion of disparities in educational opportunities
D. Planning, organising, directing and controlling the financial activities
Answer» D. Planning, organising, directing and controlling the financial activities
77.

The most important method used in Ancient and medieval times in financing education is

A. Land grants and income yielding endowmwnts
B. Learning while earning
C. Donation from the public
D. Government funds
Answer» A. Land grants and income yielding endowmwnts
78.

One of the following is not include in the important activities in the field of education undertaken by UNESCO

A. Centre for Educational Technology
B. Secondary School Teaching License Project
C. Organisation of meetings, seminars, workshops etc
D. Expansion of educational services
Answer» D. Expansion of educational services
79.

An important problem of social change, which cannot be solved by half-harted measures is

A. Unemployment of youth
B. Population mobility
C. Age distribution of population
D. Extension of educational opportunities
Answer» C. Age distribution of population
80.

Besides the provision for special education, ___________ will require additional adjustments in the policies of educational financing

A. Vocational education, professional training course etc
B. Financial resource
C. Distribution of funds
D. School fees
Answer» A. Vocational education, professional training course etc
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