McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Bachelor of Banking and Insurance (BBI) , Bachelor of Commerce (B Com) .
Chapters
| 1. |
The financial decision making that relates to current assets or short term asset is known as __________________. |
| A. | working capital |
| B. | non-working capital |
| C. | venture capital |
| D. | all of the above |
| Answer» A. working capital | |
| 2. |
In what order should current assets be present on a statement of financial position? |
| A. | cash, bank, trade receivables, inventories |
| B. | trade receivables, bank, cash, inventories |
| C. | inventories, cash, bank, trade receivables |
| D. | inventories, trade receivables, bank, cash |
| Answer» D. inventories, trade receivables, bank, cash | |
| 3. |
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 | |
| 4. |
What does the statement of comprehensive income show? |
| A. | the liquidity position of a business at a point in time |
| B. | the value of assets bought by a business over a period point in time |
| C. | the profit or loss made by a business over a period of time |
| D. | the value of a business at a point in time |
| Answer» C. the profit or loss made by a business over a period of time | |
| 5. |
Depreciation is applied to non-current assets in the statement of financial position in order to |
| A. | show a profitability valuation of the non-current assets |
| B. | show a true and fair value of the non-current assets |
| C. | show how the non-current assets are affected by inflation |
| D. | show what the non-current assets could make if leased out |
| Answer» B. show a true and fair value of the non-current assets | |
| 6. |
What would be the most likely impact on trade receivables days if invoice discounting was offered to and accepted by a large customer of a business? |
| A. | trade receivables days would no longer exist |
| B. | trade receivables days would reduce |
| C. | trade receivables days would increase |
| D. | trade receivable days would not be affected |
| Answer» B. trade receivables days would reduce | |
| 7. |
___________in accounting, is when the costs to acquire an asset are expensed over the life of that asset rather than in the period it was incurred? |
| A. | purchasing. |
| B. | capitalization. |
| C. | selling. |
| D. | financing |
| Answer» B. capitalization. | |
| 8. |
Capitalization is the sum of a corporation’s stock, long term debts &________? |
| A. | liquid liability |
| B. | retained earnings |
| C. | fixed asset. |
| D. | short term debts. |
| Answer» B. retained earnings | |
| 9. |
__________ is a situation in which actual profits of a company are not sufficient enough to pay interest on debentures, on loans and pay dividends on shares over a period of time? |
| A. | under capitalization |
| B. | over capitalization |
| C. | market capitalization |
| D. | none of the above |
| Answer» B. over capitalization | |
| 10. |
Asset structure = _________+__________. |
| A. | current asset+fixed asset |
| B. | tangible asset+fixed asset |
| C. | fixed asset+current asset |
| D. | intangible asset+current asset |
| Answer» C. fixed asset+current asset | |
| 11. |
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. | |
| 12. |
In deciding the appropriate level of current assets for the firm, management is confronted
|
| A. | a trade-off between profitability and risk. |
| B. | a trade-off between liquidity and marketability. |
| C. | a trade-off between equity and debt. |
| D. | a trade-off between current assets and profitability. |
| Answer» A. a trade-off between profitability and risk. | |
| 13. |
Permanent working capital ___________. |
| A. | varies with seasonal needs. |
| B. | includes fixed assets. |
| C. | is the amount of current assets required to meet a firm\s long-term minimum needs. |
| D. | includes accounts payable. |
| Answer» C. is the amount of current assets required to meet a firm\s long-term minimum needs. | |
| 14. |
Net working capital refers to ___________. |
| A. | total assets minus fixed assets. |
| B. | current assets minus current liabilities. |
| C. | current assets minus inventories. |
| D. | current assets. |
| Answer» B. current assets minus current liabilities. | |
| 15. |
To financial analysts, "gross working capital" means the same thing as ________. |
| A. | fixed assets. |
| B. | current assets. |
| C. | working capital. |
| D. | cost of capital. |
| Answer» B. current assets. | |
| 16. |
An example of fixed asset is________. |
| A. | live stock. |
| B. | value stock. |
| C. | income stock. |
| D. | all of the above. |
| Answer» A. live stock. | |
| 17. |
Which one of the following is not the determinant of the working capital? |
| A. | size of the firm |
| B. | operating cycle |
| C. | terms of credit |
| D. | competitors |
| Answer» D. competitors | |
| 18. |
Permanent working capital ___ |
| A. | will vary at all times |
| B. | will vary with volumes |
| C. | fixed at all times |
| D. | fluctuates according to the season |
| Answer» C. fixed at all times | |
| 19. |
Which one of the following is not a method to find working capital requirement? |
| A. | percent of sales method |
| B. | working capital components method |
| C. | operating cycle method |
| D. | physical method |
| Answer» D. physical method | |
| 20. |
The Capital used for meeting routine and repetitive expenses of day to day business operations is called____. |
| A. | reserve capital |
| B. | working capital |
| C. | fixed capital |
| D. | regular capital |
| Answer» B. working capital | |
| 21. |
Gross working capital represents __________. |
| A. | total current liabilities |
| B. | the excess of current assets over current liabilities |
| C. | total current assets |
| D. | total liquid assets |
| Answer» C. total current assets | |
| 22. |
Net working capital is the excess of current assets over ________. |
| A. | current liabilities |
| B. | long term liabilities |
| C. | contingent liabilities |
| D. | fixed liabilities |
| Answer» A. current liabilities | |
| 23. |
A positive (net) working capital will arise when current assets exceed _________. |
| A. | fixed liabilities |
| B. | contingent liabilities |
| C. | long term liabilities |
| D. | current liabilities |
| Answer» D. current liabilities | |
| 24. |
The net working capital, being the difference between current assets and current liabilities is a _______. |
| A. | misleading concept |
| B. | quantitative concept |
| C. | qualitative concept |
| D. | none of the above |
| Answer» C. qualitative concept | |
| 25. |
The Funds required by way of permanent working capital should be provided by __________. |
| A. | indigenous banks |
| B. | commercial banks |
| C. | rbi |
| D. | proprietors |
| Answer» D. proprietors | |
| 26. |
Service and Financial concerns may have _____. |
| A. | longest operating cycle |
| B. | shortest operating cycle |
| C. | manufacturing phase |
| D. | none of these |
| Answer» B. shortest operating cycle | |
| 27. |
_____ is that minimum amount which should always be present in the business to carry out the activities without a break. |
| A. | net working capital |
| B. | gross working capital |
| C. | permanent working capital |
| D. | temporary working capital |
| Answer» C. permanent working capital | |
| 28. |
Working capital over and above the fixed working capital would be termed as _______. |
| A. | temporary working capital |
| B. | permanent working capital |
| C. | net working capital |
| D. | gross working capital |
| Answer» A. temporary working capital | |
| 29. |
__________ denotes a situation of too much or excessive working capital. |
| A. | gross working capital |
| B. | redundant working capital |
| C. | permanent working capital |
| D. | temporary working capital |
| Answer» B. redundant working capital | |
| 30. |
_________ being the life blood of a business requires to be maintained in reasonably adequate quantity to run business successfully. |
| A. | working capital |
| B. | proper documents |
| C. | assets |
| D. | petty cash |
| Answer» A. working capital | |
| 31. |
According to ________ working capital refers to the company’s total investment in current assets. |
| A. | net concept |
| B. | gross concept |
| C. | equal concept |
| D. | accounting concept |
| Answer» B. gross concept | |
| 32. |
According to ________ working capital refers to the difference between current assets and current liabilities. |
| A. | equal concept |
| B. | accounting concept |
| C. | net concept |
| D. | gross concept |
| Answer» C. net concept | |
| 33. |
The funds required for running an organisation are generally called as ____________. |
| A. | overdraft |
| B. | cash credit |
| C. | working capital |
| D. | operating profit |
| Answer» C. working capital | |
| 34. |
The __________ is required to ensure circulation of operating cycle. |
| A. | regular working capital |
| B. | fixed working capital |
| C. | reserve working capital |
| D. | variable working capital |
| Answer» A. regular working capital | |
| 35. |
________ is the excess amount over the requirement for regular working capital. |
| A. | variable working capital |
| B. | fixed working capital |
| C. | reserve working capital |
| D. | regular working capital |
| Answer» C. reserve working capital | |
| 36. |
The working capital required to meet the seasonal need of the business is called _______. |
| A. | fixed working capital |
| B. | variable working capital |
| C. | special working capital |
| D. | seasonal working capital |
| Answer» D. seasonal working capital | |
| 37. |
___________ is required to meet special exigencies such as launching of extensive marketing campaigns for conducting research. |
| A. | seasonal working capital |
| B. | special working capital |
| C. | reserve working capital |
| D. | regular working capital |
| Answer» B. special working capital | |
| 38. |
The statement of changes in financial position prepared to determine only the sources and uses of working capital between two dates of balance sheet is known as __________. |
| A. | cash flow statement |
| B. | memorandum balance sheet |
| C. | fund flow statement |
| D. | profit and loss account |
| Answer» C. fund flow statement | |
| 39. |
What are the aspects of working capital management? |
| A. | inventory management |
| B. | receivable management |
| C. | cash management |
| D. | all of the above |
| Answer» D. all of the above | |
| 40. |
_________ function includes a firm’s attempts to balance cash inflows and outflows. |
| A. | finance |
| B. | liquidity |
| C. | investment |
| D. | dividend |
| Answer» B. liquidity | |
| 41. |
Firms which are capital intensive rely on _________. |
| A. | equity |
| B. | short term debt |
| C. | debt |
| D. | retained earnings |
| Answer» C. debt | |
| 42. |
Hirer is entitled to claim ___________. |
| A. | depreciation |
| B. | salvage value |
| C. | hp payments |
| D. | none of above |
| Answer» A. depreciation | |
| 43. |
Which of the following is not an advantages of trade credit? |
| A. | easy availability |
| B. | flexibility |
| C. | informality |
| D. | buyout financing |
| Answer» D. buyout financing | |
| 44. |
Which of the following are theories for dividend relevance? |
| A. | walter’s model |
| B. | mm approach |
| C. | game theory |
| D. | market value theory |
| Answer» A. walter’s model | |
| 45. |
What is not a form of dividend? |
| A. | cash dividends |
| B. | bonus shares(stock dividend) |
| C. | share split |
| D. | split reverse |
| Answer» D. split reverse | |
| 46. |
The percentage of earnings paid as dividends is called __________. |
| A. | dividend policy |
| B. | payout ration |
| C. | cash dividends |
| D. | reverse split |
| Answer» B. payout ration | |
| 47. |
What are the various methods of estimating cash? |
| A. | receipts and payment method |
| B. | adjusted profit & loss method |
| C. | balance sheet method |
| D. | all of the above |
| Answer» D. all of the above | |
| 48. |
The art of managing, within the acceptable level of risk, the consolidated funds optimally and profitably is called _________. |
| A. | integrated treasury |
| B. | treasury management |
| C. | merchant banking |
| D. | none of the above |
| Answer» B. treasury management | |
| 49. |
What are the different types of underlying assets? |
| A. | stocks |
| B. | bonds |
| C. | currency |
| D. | stock indices |
| Answer» D. stock indices | |
| 50. |
What are people who buy or sell in the market to make profits called? |
| A. | hedgers |
| B. | speculators |
| C. | arbitrageurs |
| D. | none of the above |
| Answer» B. speculators | |
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