FM assgn :13:
Select The Blank
Question
Interest on overdraft is payable on the actual amount drawn and is calculated on
________ product basis
Correct Answer daily
Your Answer
True/False
Question
daily
Cash flow statement is important financial tool for the management
Correct Answer True
Your Answer
True
Multiple Choice Multiple Answer
Question
Advantages of Debentures from Investor's point of view
Correct Answer They earn a stable rate of return
the debenture Trust Deed , They
Your Answer
They earn a stable rate of return
the debenture Trust Deed , They
, They are protected by the various provisions of
generally have a fixed maturity period
, They are protected by the various provisions of
generally have a fixed maturity period
Multiple Choice Multiple Answer
Question
Fund based lending of banks include
Correct Answer Overdraft , Bills Purchased
Your Answer
Overdraft , Bills Purchased
Select The Blank
Question
In ABC analysis C class consist of ________.
Correct Answer a very large number of items which are less important
Your Answer
a very large number of items which are less important
Select The Blank
Question
If the size of the issue is more than Rs. 100 crores, the issue is required to be rated
by at least ________ credit rating agencies
Correct Answer two
Your Answer
two
Multiple Choice Single Answer
Question
The effect of Bonus paid in the form of fully paid shares on funds ( cash concept ) is
Correct Answer No change in cash
Your Answer
True/False
Question
No change in cash
Mortgage mode of security pertains to immovable properties like land and buildings
Correct Answer True
Your Answer
True
True/False
Question
Ratio should be computed on the basis of inter-related figures which have a cause
and effect relationship
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
Net cash inflow is arrived at
Correct Answer Revenue after tax add depreciation
Your Answer
Revenue after tax add depreciation
Multiple Choice Single Answer
Question
The motive of the company to hold the inventories in order to facilitate the smooth
and uninterrupted production and sales operations is known as
Correct Answer Transaction motive
Your Answer
Precautionary motive
Select The Blank
Question
In financial terms, the operating profit earned by the company is also referred to as
________
Correct Answer Profit before Interest and Taxes
Your Answer
Profit before Interest and Taxes
Match The Following
Question
Correct Answer
Your Answer
Role of Client
Sends the invoice copy
Places the order
Without Recourses factoring
risk of non-payment assumed by Follows up
factor
With Recourses factoring
risk of non-payment assumed by Sends the invoice copy
selling company
Role of factor
Follows up
Bills Discounting
Select The Blank
Question
Depreciation is sometimes treated as ________ funds
Correct Answer source
Your Answer
source
Multiple Choice Multiple Answer
Question
Advantages of Debentures from company's point of view are
Correct Answer The specific cost of debt capital represented by debentures is lower than the cost of
preference or equity capital , Debenture financing does not result in dilution of
control
Your Answer
The specific cost of debt capital represented by debentures is lower than the cost of
preference or equity capital , Debenture financing does not result in dilution of
control
True/False
Question
Fixed Assets turnover ratio is the relationship between fixed assets and owner's
funds
Correct Answer False
Your Answer
True
Multiple Choice Single Answer
Question
Economic Order quantity indicates that
Correct Answer Quantity which is fixed in such a way that the total variable cost of managing the
inventory can be minimised
Your Answer
Quantity which is fixed in such a way that the total variable cost of managing the
inventory can be minimised
Select The Blank
Question
The current ratio of ________ is considered to be standard
Correct Answer 2 : 1
Your Answer
1:1
Multiple Choice Multiple Answer
Question
Limitations of cash flow analysis are
Correct Answer It cannot be equated with the income statement , Cannot replace the fund flow
statement , Dose not represent real liquid position
Your Answer
It cannot be equated with the income statement , Cannot replace the fund flow
statement , Discloses the success or failure of cash planning
Match The Following
Question
Correct Answer
Your Answer
Term loan
represents a source of debt
instruments to raise long term
finance which is generally
debt capital
repayable in more than one year
but less than ten years
Lessee
Not able to claim depreciation on Claims the depreciation on the
asset
asset
Hirer
Claims the depreciation on the
asset
Not able to claim depreciation on
asset
Retained earnings
Residue left behind from
earnings available to equity
shareholders after the payment
of annual dividend
represents a source of debt
finance which is generally
repayable in more than one year
but less than ten years
Multiple Choice Multiple Answer
Question
Limitations of capital budgeting is
Correct Answer Life of the project cannot be estimated accurately , Cash inflows cannot be eatimated
accurately , Difficulties in deciding the cost of capital
Your Answer
Cash inflows cannot be eatimated accurately , Inaccurate estimation of the fixed
assets , Difficulties in deciding the cost of capital
Multiple Choice Single Answer
Question
The traditional approach to financial management refers only to the procurement of
funds by
Correct Answer Corporate entity
Your Answer
Corporate entity
Multiple Choice Multiple Answer
Question
The assumptions made while preparing the funds flow statement are
Correct Answer The bank credit has been taken as short term advance from the bank , In the
absence of information about the actual amount of dividend and tax paid, it has been
presumed that the proposed dividend and tax provision for the current year were
paid in the next year
Your Answer
In the absence of information about the actual amount of dividend and tax paid, it
has been presumed that the proposed dividend and tax provision for the current year
were paid in the next year , It represents real liquid position , It can be equated with
the income statement
True/False
Question
A high debt equity ratio may indicate that the financial stake of the creditors is more
than that of the owners
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
Mr. A invested Rs. 10,000 in fixed deposit carrying interest @10% p.a. compounded
annually. Calculate the value of investment after two years
Correct Answer Rs. 12,100
Your Answer
Rs. 12,100
Multiple Choice Multiple Answer
Question
Objective of perpetual inventory system are
Correct Answer Maintenance of Bin Cards and Stores ledger in order to know about the stock in
quantity and value at any given point of time , Continuous verification of physical
stock to ensure that the physical balance and the book balance tallies
Your Answer
Maintenance of Bin Cards and Stores ledger in order to know about the stock in
quantity and value at any given point of time , Continuous verification of physical
stock to ensure that the physical balance and the book balance tallies
Multiple Choice Single Answer
Question
Overcapitalisation is
Correct Answer Existence of excess capital as compared to the level of activity and requirements
Your Answer
Existence of excess capital as compared to the level of activity and requirements
Select The Blank
Question
________ in assets involves inflow of funds
Correct Answer Decrease
Your Answer
True/False
Increase
Question
The combination of irrevocable and confirmed letter of credit can be considered to be
a guaranteed payment on the part of the exporter
Correct Answer True
Your Answer
True
Select The Blank
Question
Financial Institution plays the role of ________ in factoring service offered
Correct Answer Factor
Your Answer
lender
Multiple Choice Multiple Answer
Question
The functions of a Finance Controller are :
Correct Answer Budgeting , Record Keeping , Annual Reporting
Your Answer
True/False
Question
Banking Relations , Budgeting , Annual Reporting
In case of cash credit, the company need not have a formal current account
Correct Answer True
Your Answer
False
Multiple Choice Multiple Answer
Question
Packing credit facility can take the following form
Correct Answer Pre-shipment Packing credit , Post-shipment Packing credit
Your Answer
Pre-shipment Packing credit , Post-shipment Packing credit , Confirmed Packing
credit
Multiple Choice Single Answer
Question
Interest and Dividend are categorised under
Correct Answer Non-operating expenses
Your Answer
True/False
Question
Non-operating expenses
Turnover ratios measure efficiency of a business in using its resources
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
Among all the intermediaries in Capital market, probably the most important and
significant intermediary is the
Correct Answer Merchant Banker
Your Answer
Select The Blank
Merchant Banker
Question
The most accepted interpretation of the term 'funds' is in the form of ________
Correct Answer Working capital
Your Answer
Working capital
True/False
Question
Under hypothecation mode of security neither the property not the possession of the
goods hypothecated is transferred to the Bank
Correct Answer True
Your Answer
True
Multiple Choice Multiple Answer
Question
If Profit maximization is accepted as the only goal of finance function, it is criticised
on the following grounds
Correct Answer Ignores risk factor , Does not consider social obligation , Ignores quality aspect of
benefits associated with a financial course of action
Your Answer
Ignores risk factor , Does not consider social obligation , Ignores quality aspect of
benefits associated with a financial course of action
Multiple Choice Single Answer
Question
The technique where the interest is compounded and becomes a part of initial
principal at the end of compounding period is termed as
Correct Answer Compounding
Your Answer
Compounding
Select The Blank
Question
The basic objective of ________ management is to reduce the operating cash
requirement to the minimum possible extent without affecting the routine
transactions.
Correct Answer Cash
Your Answer
Cash
True/False
Question
Earnings per share is calculated as ( Profit after tax - Preference Dividend ) / Number
of Equity shares
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
The "Pre-emptive right" of the equity shareholder is
Correct Answer the right to purchase new shares in the same proportion as their current ownership
Your Answer
the right to purchase new shares in the same proportion as their current ownership
Multiple Choice Multiple Answer
Question
The following techniques can be used to delay cash payments
Correct Answer Payments can be made from a bank which is distant from the bank of the company
to which payment is to be made , Attempts should be made by the company to get
the maximum credit for the goods or service supplied , Avoid early payments
Your Answer
Attempts should be made by the company to get the maximum credit for the goods
or service supplied , Avoid early payments
Multiple Choice Single Answer
Question
The cost of equity shares may be decided on the basis of yields actually realised over
the period of past few years which may be expected to be continued in future also as
per the
Correct Answer Realised Yield Approach
Your Answer
Realised Yield Approach
Multiple Choice Single Answer
Question
Irregular Dividend Policy refers to
Correct Answer Dividend per share varying according to the level of earnings
Your Answer
The company does not pay any dividend despite the huge earnings
Multiple Choice Multiple Answer
Question
Shortcomings of Debentures from Investor's point of view
Correct Answer The interest on debentures is fully taxable , They do not carry the right to vote ,
Debenture prices are vulnerable to increase in interest rates
Your Answer
They do not carry the right to vote , Debenture prices are vulnerable to increase in
interest rates