LIST OF ATTEMPTED QUESTIONS AND ANSWERS Question

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False

Question

Correct Answer

Your Answer

Interest in provision for doubtful debts should be added back in order to find out cash from operations

True

True

Multiple Choice Multiple Answer

Question

Correct Answer

Advantages of factoring

Factoring is the way in which the company can finance its requirement of

Your Answer

Working capital in respect of receivables , The company can take advantage of the expertise of the factor in various fields , With the help of factoring the company can be relieved of administrative responsibilities

The company can take advantage of the expertise of the factor in various fields ,

With the help of factoring the company can be relieved of administrative responsibilities , Factoring is the way in which the company can finance its requirement of Working capital in respect of receivables

Multiple Choice Single Answer

Question

Correct Answer

The products which are ready for sale in the market are termed as

Finished goods

Your Answer Finished goods


Question If the company buys the raw material from the suppliers on credit basis, it is

Correct Answer termed as

Trade Credit

Your Answer Trade Credit


Question Discounted Payback period is an improvement over the pay back period method

Correct Answer

Your Answer as it considers time value of money time value of money

True/False

Question

Correct Answer

Your Answer

Select The Blank

Question

Correct Answer

Your Answer

Funds flow statements and cash flow statement are one and the same

False

True

From the following data, the Earning per share is ________ : Net Profit before tax Rs. 2,00,000/-, Taxation at 50% of Net Profit, 10% Preference Share Capital

(Rs. 10 each) Rs. 1,00,000/-, Equity Share Capital (Rs. 10 each) Rs. 1,00,000/-

9

10


Question

Correct Answer

The main function of finance under the traditional approach comprises of

Procurement of funds

Your Answer Procurement of funds


Question Fund based lending of banks include

Correct Answer

Your Answer

Overdraft , Bills Purchased

Bank Guarantee , Overdraft , Letter of credit

True/False

Question

Correct Answer

Your Answer

A good Budget manual promotes standardization and simplification of budgetary procedures

True

True


Question

Correct Answer

Your Answer

Investment of the venture capitalist does not exceed ________ so that the effective control of the project remains with the entrepreneur

0.49

0.49

True/False

Question

Correct Answer

Your Answer

Cross-sectional Analysis is the comparison of financial data of same time period of different organisations engaged in similar business

True

True


Question Expected future earnings of ABC Ltd. are Rs. 2,00,000. Find out the amount of

Correct Answer

Your Answer capitalisation if the rate of return earned by similar types of companies is 10%.

Rs. 20,00,000

Rs. 20,000

Match The Following

Question

Financial leverage

Earnings per share

Price earning ratio

Operating leverage

Correct Answer Your Answer

Earning before interest and tax / ( Earning before interest and tax / (

Earning before interest and tax -

Interest )

Earning before interest and tax -

Interest )

(Profit after tax - Preference dividend) / Number of Equity

(Profit after tax - Preference dividend) / Number of Equity shares shares

Market Price per share / Earnings Market Price per share / Earnings per share per share

Contribution / Earnings before interest and tax

( Sales - Variable cost ) / ( Earning before interest and tax - Interest )


Question A secured instrument usually secured by a charge on the immovable properties

Correct Answer of the company where there is a promise to pay interest and repay principal at a stipulated period of time is known as

Debentures

Your Answer Debentures

True/False

Question

Correct Answer

Your Answer

The Stock Dividends are more expensive to administer as compared to cash dividends

True

True

True/False

Question

Correct Answer

Your Answer

The operating profit is computed as Sales Revenue Less Variable Operating

Cost Less Fixed Operating cost

True

True


Question

Correct Answer

Advantage of term loan from the company's point of view is

In post tax terms, the cost of term loans is lower than the cost of equity capital

Your Answer or preference capital

In post tax terms, the cost of term loans is lower than the cost of equity capital or preference capital


Question

Correct Answer

Your Answer

Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose

Dividend

Dividend


Question Rights issue is

Correct Answer

Your Answer

Selling the securities in the primary market to the existing shareholders

Bonus Issue


Question The period that indicates the period within which the discounted cash inflows

Correct Answer equal to the discounted cash outflows involved in the project is termed as

Discounted Pay back period

Your Answer Discounted Pay back period


Question

Correct Answer

Your Answer

The current ratio of ________ is considered to be standard

2 : 1

2 : 1


Question The traditional approach to financial management refers only to the procurement of funds by

Correct Answer

Your Answer

Corporate entity

Individuals


Question Operating cost incurred by the company can be classified into

Correct Answer

Your Answer

Variable cost , Fixed cost , Semi-variable cost

Variable cost , Fixed cost , Semi-variable cost

True/False

Question

Correct Answer

Your Answer


Question

Correct Answer

Your Answer

Inventory is the intermediate stage between purchase of raw materials and consumption of raw materials

True

True

Interest on overdraft is payable on the actual amount drawn and is calculated on

________ product basis daily daily

Match The Following

Question

Financial ratios

Profitability ratio

Turnover ratios

Overall profitability ratio

Correct Answer

Ratios disclosing the financial position or solvency of the firm

Ratios which reflect the final results of business operations

Ratios measuring the efficiency with which the assets are employed by a firm

Ratios which indicates the percentage of return on the total capital employed in the business

Your Answer

The ratios indicate the long term financial prospects of the company

Ratios measuring the efficiency with which the assets are employed by a firm

Ratios disclosing the financial position or solvency of the firm

Ratios which reflect the final results of business operations


Question The real value of the assets is less than the book value of the assets due to

Correct Answer purchase of the assets during inflationary situations results into

Overcapitalisation

Your Answer Overcapitalisation


Question

Correct Answer

Your Answer

Without Recourses factoring is also referred to as ________

Full factoring

Zero factoring


Question

Correct Answer

Indicate which of these are Profitability ratios

Operating ratio , Gross Profit ratio

Your Answer Operating ratio , Gross Profit ratio


Question The book-keeping and accounting activities in relation to the receivables

Correct Answer management undertaken by the factor includes

Maintenance of debtors ledger , Various periodical reports about outstanding from the customers , Age-wise analysis of the outstanding

Your Answer Maintenance of debtors ledger , Various periodical reports about outstanding from the customers , Preparing financial statements


Question

Correct Answer

Your Answer

________ is more useful to the management as a tool of financial analysis in short periods

Cash flow analysis

Ratio analysis


Question Accounting rate of return is calculated as

Correct Answer

Your Answer

[Total Profits / (Net Investment * No. of years of Profits)] * 100

[Total Profits / (Net Investment * No. of years of Profits)] * 100

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Question

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS Question

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