Financial Management

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question The fixed assets are expressed at ________
Correct Answer Cost - Depreciation
Your Answer Cost - Depreciation
Multiple Choice Single Answer
Question The objective of Working Capital management is to ensure
Correct Answer Optimum investment in current assets
Your Answer Optimum investment in current assets
True/False
Question With limited funds, the company must obtain the optimum
combination of acceptable investment proposals
Correct Answer True
Your Answer True
True/False
Question It is only after crossing the break even point that the profit
generating capacity of the company starts
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Receivable management is also called as
Correct Answer Trade Credit management
Your Answer Trade Credit management
Select The Blank
Question In case of Mortgage, the party in whose favour the interest is so
transferred is called ________
Correct Answer Mortgagee
Your Answer Mortgagee
Select The Blank
Question Proprietory ratio indicates the relationship between the owner's
fund and ________
Correct Answer Total assets
Your Answer Total assets
Multiple Choice Single Answer
Question Revenue from sale of products ordinarily is reported as part of
the earning in the period
Correct Answer the sale is made
Your Answer the sale is made
Multiple Choice Single Answer
Question Stock in the beginning results in
Correct Answer Application of funds
Your Answer Application of funds
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True/False
Question Introduction of a heavy amount of debt capital in the capital
structure will not only reduce the valuation of the firm but will also increase
the cost of capital
Correct Answer True
Your Answer True
Select The Blank
Question Factor can purchase the debts of the client making the immediate
payment of the same, this reduces the strain on the ________ requirements
of the client
Correct Answer Working Capital
Your Answer Working Capital
Multiple Choice Multiple Answer
Question The Proprietary concern is better than the Partnership concern
on the following points
Correct Answer Minimum Government regulations , Where the business is
small
Your Answer Minimum Government regulations , Where the business is
small
Select The Blank
Question As per the Tandon committee, variations between the projected
figures and actuals may be permitted to the extent of ________
Correct Answer 0.1
Your Answer 0.1
Select The Blank
Question The following data are extracted from the published accounts of a
company : Sales Rs. 38,00,000/-, Net Profit after tax Rs. 2,50,000/-, Equity
capital Rs. 10,00,000/-,General Reserve Rs. 6,50,000/-, Rs. Long term debt Rs.
7,00,000/-, Creditors Rs. 6,90,000/-, Bank credit/short term loan Rs.
2,30,000/-, Fixed Assets Rs. 17,50,000/-, Inventories Rs. 7,25,000/-, Other
Current assets Rs. 5,25,000/-. The Current assets turnover ratio is ________ .
Correct Answer 3.04
Your Answer 3.04
True/False
Question A high inventory turnover ratio indicates a high holding period of
the inventory
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question The relationship between the earnings belonging to the equity
shareholders and the amount finally paid to them by way of dividend is termed
as
Correct Answer Dividend payment ratio
Your Answer Dividend payment ratio
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Multiple Choice Single Answer
Question Equity Warrants are
Correct Answer where the holders are entitled to purchase the equity
shares at a specific price during the specified period
Your Answer where the holders are entitled to purchase the equity shares
at a specific price during the specified period
Multiple Choice Multiple Answer
Question The effects of overcapitalisation are
Correct Answer Reduction in the market value of the shares , Credit
standing of the company in the market falls down and difficulty in raising
futher capital
Your Answer Reduction in the market value of the shares , Credit standing
of the company in the market falls down and difficulty in raising futher capital
True/False
Question If Average credit period works out to be more than the Normal
credit period, it indicates efficiency on the part of collection department of the
company in collecting the dues from the customers
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Advantages of Internal rate of return is