Chapters
| 1. |
Business finance includes........ |
| A. | procurement of funds and utilization of funds |
| B. | management of funds |
| C. | allocation |
| D. | insurance |
| Answer» A. procurement of funds and utilization of funds | |
| 2. |
Funds are required for the.......... |
| A. | purchase of land & building |
| B. | purchase of machinery |
| C. | purchase of another fixed asset |
| D. | all of the above |
| Answer» D. all of the above | |
| 3. |
Which report gives a review on the profitability of a business? |
| A. | statement of changes in equity |
| B. | cash flow statement |
| C. | balance sheet |
| D. | income statement |
| Answer» D. income statement | |
| 4. |
The term ‘Financial Statement’ covers |
| A. | profit & loss statement |
| B. | balance sheet and profit & loss statement appropriation account |
| C. | profit & loss statement and balance sheet |
| D. | all of above are false |
| Answer» C. profit & loss statement and balance sheet | |
| 5. |
Which of the following is true about financial statements?
|
| A. | only a |
| B. | only b |
| C. | both a and b |
| D. | none of the above |
| Answer» C. both a and b | |
| 6. |
P&L statement is also known as |
| A. | statement of operations |
| B. | statement of income |
| C. | statement of earnings |
| D. | all of the above |
| Answer» B. statement of income | |
| 7. |
Which statement shows the flow of cash and cash equivalents during the financial period? |
| A. | statement of changes in equity |
| B. | cash flow statement |
| C. | balance sheet |
| D. | income statement |
| Answer» B. cash flow statement | |
| 8. |
Subtracting all expenses from revenues yields? |
| A. | net profit / net loss |
| B. | carrying value |
| C. | long term assets |
| D. | net liabilities |
| Answer» A. net profit / net loss | |
| 9. |
Balance sheet of a company is required to be prepared in the format given in ……………………… |
| A. | schedule iii part ii |
| B. | schedule iii part i |
| C. | schedule iii part iii |
| D. | table a |
| Answer» B. schedule iii part i | |
| 10. |
As per Companies Act, the Balance Sheet of a company is required to be presented in ……………………… |
| A. | horizontal form |
| B. | vertical form |
| C. | either horizontal or vertical form |
| D. | neither of the above |
| Answer» B. vertical form | |
| 11. |
Which of the following is not required to be prepared under the Companies Act? |
| A. | statement of profit and loss |
| B. | balance sheet |
| C. | report of director’s and auditor’s |
| D. | funds flow statement |
| Answer» D. funds flow statement | |
| 12. |
According to prescribed order of assets in a Company’s Balance Sheet ……………………… assets should be shown first of all. |
| A. | non-current assets |
| B. | current assets |
| C. | current investments |
| D. | loans and advances |
| Answer» A. non-current assets | |
| 13. |
Calls in Arrears appear in a Company’s Balance Sheet under ……………….. |
| A. | reserve & surplus |
| B. | shareholder’s funds |
| C. | contingent liabilities |
| D. | short-term borrowings |
| Answer» B. shareholder’s funds | |
| 14. |
Calls in advance appear in a Company’s Balance Sheet under ……………….. |
| A. | share capital |
| B. | current liability |
| C. | long-term borrowings |
| D. | reserve & surplus |
| Answer» B. current liability | |
| 15. |
Bills Receivables appear in a Company’s Balance Sheet under the Sub-head …………………….. |
| A. | current investments |
| B. | cash equivalents |
| C. | trade receivables |
| D. | short term loans and advances |
| Answer» C. trade receivables | |
| 16. |
Which of the following options is not recorded in the Balance sheet? |
| A. | cash |
| B. | rent expenses |
| C. | building |
| D. | goodwill |
| Answer» B. rent expenses | |
| 17. |
Which of the given area is NOT addressed by Business Finance? |
| A. | financing |
| B. | investing |
| C. | managing day today expenses |
| D. | none of the given options |
| Answer» D. none of the given options | |
| 18. |
Which of the following is measured by profit margin? |
| A. | operating efficiency |
| B. | asset use efficiency |
| C. | financial policy |
| D. | dividend policy |
| Answer» A. operating efficiency | |
| 19. |
Business Finance addresses which of the following? |
| A. | capital budgeting |
| B. | capital structure |
| C. | working capital management |
| D. | all of the given options |
| Answer» D. all of the given options | |
| 20. |
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 |
| Answer» D. all of the given options | |
| 21. |
Which of the following refers to the difference between the sale price and cost of inventory? |
| A. | net loss |
| B. | net worth |
| C. | markup |
| D. | markdown |
| Answer» C. markup | |
| 22. |
Who of the following make a broader use of accounting information? |
| A. | accountants |
| B. | financial analysts |
| C. | auditors |
| D. | marketers |
| Answer» B. financial analysts | |
| 23. |
Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date? |
| A. | income statement |
| B. | balance sheet |
| C. | cash flow statement |
| D. | retained earning statement |
| Answer» B. balance sheet | |
| 24. |
Balance Sheet is based upon which of the following formula? |
| A. | assets = liabilities – stockholder’s equity |
| B. | assets + liabilities = stockholder’s equity |
| C. | assets + stockholder’s equity = liabilities |
| D. | assets = liabilities + stockholder’s equity |
| Answer» D. assets = liabilities + stockholder’s equity | |
| 25. |
The conflict of interest between stockholders and management is known as: |
| A. | agency problem |
| B. | interest conflict |
| C. | management conflict |
| D. | agency cost |
| Answer» A. agency problem | |
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