FM assgn :28: Susan
Multiple Choice Single Answer
Question
The motive of the company to hold inventory to get the advantage in terms of quantity
discounts connected with bulk purchasing is known as
Correct Answer Speculative motive
Your Answer
Compensative motive
Match The Following
Question
Correct Answer
Your Answer
Interpretation
Explaining the meaning and
significance of the financial data
Ratios measuring the efficiency
with which the assets are
employed by a firm
Accounting ratio
It is the relationship expressed in Explaining the meaning and
mathematical terms between two significance of the financial data
accounting figures related with
each other
Composite ratios
Ratios based on figures of profit
and loss Account as well as the
balance sheet
It is the relationship expressed in
mathematical terms between two
accounting figures related with
each other
Financial ratios
Ratios disclosing the financial
position or solvency of the firm
Ratios disclosing the financial
position or solvency of the firm
Select The Blank
Question
________ of the company should authorise the company to buy back its own shares
Correct Answer Articles of Association
Your Answer
Memorandum of Association
Match The Following
Question
Correct Answer
Your Answer
Classification of ratios
Profitability ratio
Profitability ratio
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
Impact of the inflationary
conditions of changing price levels conditions of changing price levels
to be taken in account
to be taken in account
Multiple Choice Multiple Answer
Question
The cost of managing inventory includes
Correct Answer Ordering cost , Carrying cost
Your Answer
Maintenance cost , Ordering cost , Labour cost , Carrying cost
Multiple Choice Single Answer
Question
The effect of Cash collected from Debtors on the funds flow is that there will be
Correct Answer No effect on the funds flow
Your Answer
No effect on the funds flow
True/False
Question
Debt Service means payment of instalments and interest against an amount borrowed
as per terms of loan
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
In financial terms, Profit after tax can be referred as
Correct Answer Earning after tax
Your Answer
Earning after tax
Select The Blank
Question
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
Correct Answer Dividend
Your Answer
Dividend
Multiple Choice Multiple Answer
Question
The current ratio of a company is 2:1 ; Which of the following suggestions have no
effect on the ratio
Correct Answer Purchase stocks against cash , Cash collected from customers , Bills Receivable
dishonoured
Your Answer
Cash collected from customers , Bills Receivable dishonoured , Issue of new shares ,
Purchase stocks against cash
Select The Blank
Question
The current ratio of ________ is considered to be standard
Correct Answer 2 : 1
Your Answer
2:1
True/False
Question
Earnings per share does not indicate the amount of profits distributed among the
owners by way of dividend and also the amount of profits retained in the business
Correct Answer True
Your Answer
True
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 , Rent , Expenses related to Purchases , Stock Adjustments
Select The Blank
Question
Continuous verification of physical stock to ensure that the physical balance and the
book balance tallies is carried under ________.
Correct Answer Perpetual Inventory system
Your Answer
Perpetual Inventory system
True/False
Question
Turnover ratios indicate the efficiency of the organisation to use the various kinds of
assets by converting them in the form of Sales
Correct Answer True
Your Answer
True
True/False
Question
If the cash is held to take advantage of profit making opportunities arising out of
changes in the value of securities, the cash holding is called Precautionary motive
Correct Answer False
Your Answer
False
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
A close and strict control is facilitated on the most important items , 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 , It may serve as a base for the Production
department for placing the material requisition slips
Multiple Choice Multiple Answer
Question
The committees appointed by the Reserve Bank of India to control the working capital
financing
Correct Answer Tandon committee , Marathe committee , Nayak committee
Your Answer
Delfi committee , Tandon committee , Marathe committee , Nayak committee
Multiple Choice Single Answer
Question
Dividends are usually paid on
Correct Answer Paid up capital
Your Answer
Issued capital
Multiple Choice Single Answer
Question
A decrease in current liabilities
Correct Answer increases working capital
Your Answer
True/False
Question
increases working capital
Higher Earnings per share indicates higher amount of profits available to the investor
Correct Answer True
Your Answer
True
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
External sources of cash are as follows :
Correct Answer Issue of new shares , long term loans , short term borrowings
Your Answer
True/False
Question
Issue of new shares , long term loans , Depreciation , short term borrowings
All Intangible assets are fictitious assets
Correct Answer False
Your Answer
False
Multiple Choice Single Answer
Question
The symptom of low capacity utilisation will be shown by
Correct Answer Fixed Assets Turnover ratio
Your Answer
Fixed Assets Turnover ratio
Multiple Choice Multiple Answer
Question
The Purpose of cash budget is
Correct Answer to co-ordinate the timings of cash needs , It pinpoints the period when there is likely to
be excess cash , it helps to arrange needed funds on the most favourable terms and
prevents the accumulation of excess funds
Your Answer
to co-ordinate the timings of cash needs , It pinpoints the period when there is likely to
be excess cash , it helps to arrange needed funds on the most favourable terms and
prevents the accumulation of excess funds , to make financial statements
Multiple Choice Single Answer
Question
The ratio which indicate the long term financial prospects of the company are
Correct Answer Solvency ratios
Your Answer
Solvency ratios
Multiple Choice Multiple Answer
Question
The assumptions for the theories of capital structure are
Correct Answer Firm use only long term debt capital or equity share capital to raise funds , Firm follow
policy of paying 100% of its earnings by way of dividend , Operating earnings are not
expected to grow
Your Answer
Firm use only long term debt capital or equity share capital to raise funds , Corporate
Income Tax does exists , Firm follow policy of paying 100% of its earnings by way of
dividend , Operating earnings are not expected to grow
Select The Blank
Question
Depreciation is sometimes treated as ________ funds
Correct Answer source
Your Answer
True/False
Question
source
The term Accrued Income and Outstanding Income have synonymous meaning
Correct Answer False
Your Answer
False
Multiple Choice Multiple Answer
Question
International financial function of the organisation comprises of :
Correct Answer Study of flow of funds beyond national boundaries , Exchange of currencies
Your Answer
Study of flow of funds beyond national boundaries , Exchange of currencies , Financial
matters of Government , Accomplishing social objectives
Select The Blank
Question
When a company issues bonus shares ________ of the company get reduced
Correct Answer Reserves
Your Answer
Reserves
True/False
Question
According to Net Income Approach, the valuation of the firm and its cost of capital is
independent of its capital structure
Correct Answer False
Your Answer
True
Multiple Choice Multiple Answer
Question
Undue increase in Gross Profit ratio may indicate
Correct Answer Over-valuation of closing stock , Consideration of non-sales transactions as sales
transaction
Your Answer
Over-valuation of closing stock , Under-valuation of closing stock , Consideration of
non-sales transactions as sales transaction , Improper utilisation of infrastructural
facilities
Multiple Choice Single Answer
Question
Receipt of loans/borrowings appear in the cash budget under the head
Correct Answer Non-operating cash inflow
Your Answer
Non-operating cash inflow
Select The Blank
Question
Operating Lease is also referred to as ________ lease
Correct Answer Service
Your Answer
Service
Multiple Choice Multiple Answer
Question
The classification of ratios under miscellaneous group includes
Correct Answer Earnings per share , Dividend Payment ratio
Your Answer
Return on Capital Employed , Earnings per share , Dividend Payment ratio , Return on
Asset
Select The Blank
Question
________ in liabilities involves outflow of funds
Correct Answer Decrease
Your Answer
Decrease
Multiple Choice Multiple Answer
Question
Measurement of cost of capital can be done through
Correct Answer Cost of Debt , Cost of Preference shares , Cost of Equity shares
Your Answer
Cost of Debt , Cost of Preference shares , Cost of Equity shares , Cost of other liabilities
Multiple Choice Single Answer
Question
Accounting rate of return is calculated as
Correct Answer [Total Profits / (Net Investment * No. of years of Profits)] * 100
Your Answer
[Total Profits / (Net Investment * No. of years of Profits)] * 100
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 return paid on own capital is
Correct Answer Dividend
Your Answer
Dividend
Multiple Choice Single Answer
Question
Default cost is
Correct Answer the cost which cannot be recovered from the customer due to their inability to pay
Your Answer
the cost which cannot be recovered from the customer due to their inability to pay
True/False
Question
The objective of funds flow statement may be to find out uses of loans raised by the
business
Correct Answer True
Your Answer
False
Select The Blank
Question
________ indicates the symptom of liquidity crisis
Correct Answer Current ratio
Your Answer
Current ratio
Multiple Choice Single Answer
Question
The function of the Bankers to the issue is to
Correct Answer collect the application money on behalf of the company
Your Answer
collect the application money on behalf of the company
Select The Blank
Question
Where share capital is not represented by the assets of equal value, the situation may
mean introduction of ________
Correct Answer Watered capital
Your Answer
Overcapitalisation