McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
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 | |
| 26. |
Which from the following is NOT an example of intangible assets? |
| A. | trademarks |
| B. | patents |
| C. | buildings |
| D. | technical expertise |
| Answer» C. buildings | |
| 27. |
The following are the examples of financial assets except? |
| A. | stocks |
| B. | bank loan |
| C. | bond |
| D. | raw material |
| Answer» D. raw material | |
| 28. |
Business finance refers to ...... and ........ employed in a business. |
| A. | money |
| B. | credit |
| C. | both a & b |
| D. | none of the above |
| Answer» C. both a & b | |
| 29. |
Business finances is concerned with _________ funds and _______ funds from different sources. |
| A. | estimation of funds |
| B. | raising of funds |
| C. | short term finance |
| D. | both a & b |
| Answer» D. both a & b | |
| 30. |
Which of the following is not a function of finance manager? |
| A. | mobilization of funds |
| B. | deployment of funds |
| C. | control over use of funds |
| D. | manipulate share price of the company |
| Answer» D. manipulate share price of the company | |
| 31. |
Which is the following main decision taken by the financial manager in a company? |
| A. | income decision |
| B. | financing decision |
| C. | appraisal decision |
| D. | budget decision |
| Answer» B. financing decision | |
| 32. |
Finance Function comprises |
| A. | safe custody of funds only |
| B. | expenditure of funds only |
| C. | procurement of finance only |
| D. | procurement & effective use of funds |
| Answer» D. procurement & effective use of funds | |
| 33. |
The finance manager is accountable for. |
| A. | earning capital assets of the company |
| B. | effective management of a fund |
| C. | arrangement of financial resources |
| D. | proper utilization of funds |
| Answer» C. arrangement of financial resources | |
| 34. |
The focal point of financial management in a firm is: |
| A. | the number and types of products or services provided by the firm. |
| B. | the minimization of the amount of taxes paid by the firm. |
| C. | the creation of value for shareholders. |
| D. | the dollars profits earned by the firm. |
| Answer» C. the creation of value for shareholders. | |
| 35. |
The term financial statement refers to… |
| A. | income statement |
| B. | cash flow and fund flow |
| C. | balance sheet |
| D. | all |
| Answer» D. all | |
| 36. |
Which of the following is the main objective of a financial statement? |
| A. | to know the solvency |
| B. | to know the debt capacity |
| C. | to know the earning capacity |
| D. | all |
| Answer» D. all | |
| 37. |
In financial statements, the fixed assets are shown at … |
| A. | market price |
| B. | cost price |
| C. | replacement price |
| D. | none |
| Answer» A. market price | |
| 38. |
What is followed while preparing the financial statements? |
| A. | accounting conventions |
| B. | accounting principles |
| C. | accounting concepts |
| D. | all |
| Answer» D. all | |
| 39. |
In financial statement the stock is valued at cost or market price whichever is less on the basis of… |
| A. | accounting concepts |
| B. | accounting conventions |
| C. | accounting principles |
| D. | none |
| Answer» B. accounting conventions | |
| 40. |
The balance sheet shows … |
| A. | the source of working capital |
| B. | the change in working capital |
| C. | both |
| D. | none |
| Answer» D. none | |
| 41. |
The analysis and interpretations of the financial statement will reveal … |
| A. | the financial position |
| B. | the profitability |
| C. | none |
| D. | both |
| Answer» D. both | |
| 42. |
The process of explaining the meaning, significance and relationship between two financial factors is called … |
| A. | summarization |
| B. | analysis |
| C. | interpretation |
| D. | none |
| Answer» C. interpretation | |
| 43. |
The process of comparing various financial factors of a company over a period of time is known as … |
| A. | inter‐firm comparison |
| B. | ratio analysis |
| C. | intra‐firm comparison |
| D. | inter‐industry comparison |
| Answer» C. intra‐firm comparison | |
| 44. |
Which of the following is technique of financial statement analysis? |
| A. | common‐size statement |
| B. | comparative statement |
| C. | trend analysis |
| D. | all |
| Answer» D. all | |
| 45. |
________is a simply the amount of cash coming in to a business. |
| A. | cash flow |
| B. | inflow |
| C. | both a and b |
| D. | none of the above. |
| Answer» A. cash flow | |
| 46. |
If value of opening inventories increases, what happens to the value of gross profit? |
| A. | decreases |
| B. | increases |
| C. | stays the same |
| D. | gets closer to net profit |
| Answer» A. decreases | |
| 47. |
Incorrect cash flow planning can lead to ________ |
| A. | solvency |
| B. | insolvency |
| C. | bankruptcy |
| D. | failure |
| Answer» C. bankruptcy | |
| 48. |
Analysis of any financial Statement comprises |
| A. | balance sheet |
| B. | p&l account |
| C. | trading account |
| D. | all of the above |
| Answer» D. all of the above | |
| 49. |
Which of the following are techniques, tools or methods of analysis and interpretation of financial statements? |
| A. | ratio analysis |
| B. | average analysis |
| C. | trend analysis |
| D. | all of the above |
| Answer» D. all of the above | |
| 50. |
Interpretation of accounts is the |
| A. | art and science of translating the figures |
| B. | to know financial strengths and weaknesses of a business |
| C. | to know the causes for the prevailing performance of business |
| D. | all of the above |
| Answer» D. all of the above | |
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