FM assgn :24: Satyajit
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 The indication given by Internal rate of return is that it is the ________ rate at which the
company will be able to pay towards the interest on amounts borrowed for investing in the projects
Correct Answer maximum
Your Answer maximum
Select The Blank
Question The payment of Dividend in the form of Bonus shares involves ________
Correct Answer only transfer of retained earnings to share capital
Your Answer outflow of cash
Multiple Choice Single Answer
Question The most easiest form of organisation to form and operate is
Correct Answer Proprietary concern
Your Answer Proprietary concern
Multiple Choice Single Answer
Question From the following data, work out the Economic order quantity : Annual Demand : 5000 units,
Ordering cost Rs. 60 per order, Price per unit Rs. 100, Inventory carrying cost is 15% on average
inventory
Correct Answer 200 units
Your Answer 200 units
Multiple Choice Single Answer
Question Delinquency cost in connection with accounts receivables involves
Correct Answer blocking up of funds for an extended period
Your Answer blocking up of funds for an extended period
Multiple Choice Multiple Answer
Question Advantages of Centralised disbursements
Correct Answer It increases the transit time , Minimum cash balance can be maintained only in case of
central bank account instead of four different branches , To maintain the bank accounts at different
branches may prove to be administratively difficult
Your Answer It increases the transit time , Minimum cash balance can be maintained only in case of
central bank account instead of four different branches , To maintain the bank accounts at different
branches may prove to be administratively difficult
Select The Blank
Question ________ leverage also acts as a guideline in setting maximum limit upto which the company
should use the debt capital
Correct Answer Financial
Your Answer Operating
True/False
Question Under Hire Purchase agreement, depreciation is considered by the hirer as an expenditure,
debited the same to Profit and Loss account and hence becomes the tax deductible expenditure
Correct Answer True
Your Answer True
Select The Blank
Question ________ can be issued for the maturity period of 15 days to one year
Correct Answer Commercial Paper
Your Answer Intercorporate deposits
Select The Blank
Question The ________ collections may be useful for reducing the postal float as well as bank float
Correct Answer Decentralised
Your Answer Decentralised
Select The Blank
Question One of the tools available to the company to ensure the maintenance of ________ cash balance
is to prepare cash budget
Correct Answer Optimum
Your Answer Optimum
True/False
Question Secured Premium notes did not carry any interest during the first three years
Correct Answer True
Your Answer True
True/False
Question Private limited company can commence business immediately on incorporation
Correct Answer True
Your Answer True
True/False
Question Proprietary ratios is the relationship between owners funds and total assets
Correct Answer True
Your Answer True
Select The Blank
Question Cost management is the function of a ________.
Correct Answer Treasurer
Your Answer Treasurer
Multiple Choice Multiple Answer
Question The internal factors affecting the dividend policy are
Correct Answer Growth rate of the company , Composition of the shareholding
Your Answer Growth rate of the company , Composition of the shareholding
Multiple Choice Single Answer
Question Requirement of working capital is low is case of
Correct Answer Infrastructure oriented projects
Your Answer Trading organisation
Multiple Choice Single Answer
Question Cash from operation is equal to
Correct Answer Net Profit plus increase in outstanding expenses
Your Answer Net Profit plus increase in marketable securities
True/False
Question When a company issues bonus shares, reserves of the company get reduced and share capital of
the company increases
Correct Answer True
Your Answer True
True/False
Question Retained earnings involves cost in terms of dividend foregone by or withheld from the equity
shareholders
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The characteristics of Debentures are
Correct Answer Funds raised by the company by way of debentures are required to be repaid during the
lifetime of the company at the time stipulated by the company , The interest on debentures is payable
even if the company does not earn the profits , In financial terms, debentures prove to be a cheap source
of funds from the company's point of view
Your Answer The interest on debentures is payable even if the company does not earn the profits , In
financial terms, debentures prove to be a cheap source of funds from the company's point of view , Funds
raised by the company by way of debentures are required to be repaid during the lifetime of the company
at the time stipulated by the company
Multiple Choice Single Answer
Question The amount of funds borrowed by one company from another company, then it is termed as
Correct Answer Intercorporate deposit
Your Answer Intercorporate deposit
True/False
Question Re-order level is the highest level of inventory to be maintained above which the inventory
should not rise
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question Gross Profit ratio is calculated as
Correct Answer [(Gross Profit / Net Sales)] * 100
Your Answer [(Gross Profit / Net Sales)] * 100
Multiple Choice Single Answer
Question Collection cost in connection with accounts receivables involves
Correct Answer Administrative cost
Your Answer Administrative cost
Multiple Choice Single Answer
Question The ratios which help the present or future stockholder in assessing the value of his investment
is known as
Correct Answer Ownership ratios
Your Answer Leverage ratios
Match The Following
Question Correct Answer Your Answer
Classification of ratios Profitability ratio Inter firm comparison Advantages of Ratio Analysis It helps in
planning and forecasting It helps in planning and forecasting
Limitation of Ratio Analysis Facts only those which can be expressed in financial terms are considered
Facts only those which can be expressed in financial terms are considered
Precautions before using ratio analysis technique Impact of the inflationary conditions of changing price
levels to be taken in account Impact of the inflationary conditions of changing price levels to be taken in
account
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
Multiple Choice Multiple Answer
Question Overall profitability ratio includes
Correct Answer Return on Asset , Return on Shareholders Funds
Your Answer Return on Asset , Return on Shareholders Funds
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 Multiple Answer
Question Gross Profit is ascertained by the difference between sales and normally the following expenses
Correct Answer Cost of Purchases , Expenses related to Purchases , Stock Adjustments
Your Answer Cost of Purchases , Expenses related to Purchases , Stock Adjustments
Select The Blank
Question ________ of the company should authorise the company to buy back its own shares
Correct Answer Articles of Association
Your Answer Articles of Association
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 The interest on debentures is fully taxable , They do not carry the right to vote , Debenture
prices are vulnerable to increase in interest rates
True/False
Question For the computation of Gross Profit ratio, manufacturing cost is to be considered in case of
manufacturing companies
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Legal charges Miscellaneous expenditure Preference Capital
Unclaimed dividend Current liabilities Current liabilities
Risk Capital Equity Capital Equity Capital
Loose tools Current assets Current assets
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 0.2
True/False
Question In calculating funds from operations non-business expenses like dividends paid etc. as well as
non cash expenses like depreciation etc. are added back in the net profits shown by the Profit & Loss
Account
Correct Answer True
Your Answer True
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
Multiple Choice Single Answer
Question Return of Shareholders funds being much higher than the overall return on investment can be
judged by
Correct Answer Debt Equity ratio
Your Answer Debt Equity ratio
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 The ratios computed that indicate the efficiency of the organisation to use the various kinds of
assets by converting them in the form of Sales is categorised under
Correct Answer Turnover group
Your Answer Turnover group
True/False
Question Return on Assets is a ratio of relationship between Assets and Sales
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question The cost of managing inventory includes
Correct Answer Ordering cost , Carrying cost
Your Answer Ordering cost , Carrying cost
Select The Blank
Question ________ committee has extended the recommendations of Nayak committee to all the business
organisations
Correct Answer Vaz
Your Answer Vaz
Multiple Choice Single Answer
Question The hidden cost of capital which is not incurred directly is referred to as
Correct Answer Implicit cost
Your Answer Implicit cost
Multiple Choice Multiple Answer
Question The characteristics of assets are
Correct Answer They are acquired for use for long periods , They are ordinarily not meant for resale
Your Answer They are acquired for use for long periods , They are ordinarily not meant for resale