FM assgn :35: Raj
Multiple Choice Multiple Answer
Question
The classification of ratios under miscellaneous group includes
Correct Answer Dividend Payment ratio , Earnings per share
Your Answer
Return on Capital Employed
Select The Blank
Question
________ implies arithmetical relationship between two related figures
Correct Answer Ratio
Your Answer
Cash flow statement
Multiple Choice Single Answer
Question
Credit period is
Correct Answer the time allowed by the company to the customers to pay their dues
Your Answer
time taken for the delivery of the goods
True/False
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
False
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
True/False
Question
the cash is collected
Issue of Bonus shares is the remedy used in the situation of overcapitalisation
Correct Answer False
Your Answer
False
Multiple Choice Single Answer
Question
The formula for Current ratio is
Correct Answer Current assets / Current liabilities
Your Answer
Current assets / Current liabilities
Select The Blank
Question
The ________ has been empowered to order the company that fails to repay any
deposit to make the repayment of such deposits
Correct Answer Company Law board
Your Answer
Trustees
Select The Blank
Question
A list of all the material required for a job, process or production order is termed as
________.
Correct Answer Bill of materials
Your Answer
Bill of materials
Select The Blank
Question
Under ________, it is not only necessary to decide profitable investments but also
necessary to rank the acceptable proposals according to their relative profitabilities
Correct Answer Capital rationing
Your Answer
Capital rationing
Multiple Choice Multiple Answer
Question
The techniques of Analysis and Interpretation of financial statements are
Correct Answer Ratio Analysis , Cash flow Analysis
Your Answer
Ratio Analysis
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 quality aspect of benefits associated with a financial course of action
Match The Following
Question
Correct Answer
Your Answer
Risk adjusting discounting rate
method of capital budgeting
decision
discounting rate is increased in
situation where the company has
case of projects involving greater more acceptable proposals
risk
requiring a greater amount of
funds
Capital rationing
situation where the company has
more acceptable proposals
requiring a greater amount of
funds
discounting rate is increased in
case of projects involving greater
risk
Problems relating to situation of
capital rationing
Project Indivisibility
ratio between total discounted cash
inflows and total discounted cash
outflows
Informal method of capital
budgeting decision
subjective method
Project Indivisibility
Select The Blank
Question
For the selection of the period for which capital expenditure budget should be prepared ,
________ a period may not be useful
Correct Answer Too long
Your Answer
very small
Select The Blank
Question
Liquidity ratios indicate the ________ position of the organisation
Correct Answer Short term
Your Answer
Solvency
True/False
Question
A systematic maintenance of perpetual inventory system enables to locate slow and
non-moving items and to take remedial action for the same
Correct Answer True
Your Answer
False
Multiple Choice Multiple Answer
Question
Overall profitability ratio includes
Correct Answer Return on Asset , Return on Shareholders Funds
Your Answer
Gross Profit ratio
True/False
Question
According to Net Operating Income Approach there exists a direct relationship between
the capital structure and valuation of the firm and the cost of capital
Correct Answer False
Your Answer
False
Multiple Choice Single Answer
Question
For the calculation of Operating Profit / Loss , Depreciation on fixed assets should be
Correct Answer added to the Net Profit as per Profit and loss account
Your Answer
Deducted from the Net Profit as per Profit and loss account
Match The Following
Question
Correct Answer
Your Answer
Ratio which measures the
profitability of the investments in
a firm
Return on Asset
Debtors turnover ratio
The relation of Net Sales and
Working Capital
Working Capital turnover ratio
Capital turnover ratio
The ratio which indicates the
Debtors turnover ratio
speed at which the Sundry
debtors are converted in the form
of cash
Return on Asset
The ratio which indicates the
Current Assets turnover ratio
Capital turnover ratio
efficiency of the organisation with
which the capital employed is
being utilised
Multiple Choice Single Answer
Question
Which of the following current asset is the least liquid asset
Correct Answer Inventories
Your Answer
Marketable securities
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 Inventory Turnover ratio is
________
Correct Answer 5.24
Your Answer
6.25
Multiple Choice Multiple Answer
Question
Importance of capital budgeting decisions
Correct Answer They represent the true earning assets of the firm , they are irreversible , they require
assessment of future events which are uncertain
Your Answer
they require assessment of future events which are uncertain
Multiple Choice Multiple Answer
Question
Dividend / Price Approach to compute cost of equity shares is objected on the following
grounds
Correct Answer This presupposes that an investor looks forward only to receive dividend on equity
shares which may not be correct , It assumes that the company will not earn on its
retained earnings which is a wrong assumption
Your Answer
This presupposes that an investor looks forward only to receive dividend on equity
shares which may not be correct
Multiple Choice Single Answer
Question
The comparison of ratios of the same organisation for different years is termed as
Correct Answer Intra-firm comparison
Your Answer
Intra-firm comparison
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
0.15
Select The Blank
Question
The ________ is used as the capitalisation rate to decide the amount of capitalisation in
case of a new concern
Correct Answer cost of capital
Your Answer
cost of bad debts
Multiple Choice Multiple Answer
Question
The importance of various items of inventory may be decided on the following factors
Correct Answer Amount of investment in inventory , Value of material consumption , Critical nature of
inventory items
Your Answer
Value of material consumption
Multiple Choice Multiple Answer
Question
Advantages of cash flow statement are
Correct Answer Helps in efficient cash management , Discloses the movements of cash , Discloses the
success or failure of cash planning
Your Answer
Discloses the success or failure of cash planning
Multiple Choice Single Answer
Question
Internal rate of return may be called as
Correct Answer breakeven rate of the borrowing for the company
Your Answer
maximum growth rate of the company
Multiple Choice Single Answer
Question
A decrease in current assets
Correct Answer decreases working capital
Your Answer
have implied effect on working capital
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
Tax policy
True/False
Question
Capital budgeting process involves the estimation of various future aspects regarding
future cash inflows, life of the project etc.
Correct Answer True
Your Answer
False
Multiple Choice Multiple Answer
Question
The letter of credit may be
Correct Answer Revocable letter of credit , Confirmed letter of credit
Your Answer
Temporary letter of credit
Multiple Choice Single Answer
Question
Net revenue is arrived at
Correct Answer Sales revenue less cost
Your Answer
Revenue after tax add depreciation
Multiple Choice Single Answer
Question
Net Profit earned plus non-working capital expenses is equal to
Correct Answer Fund provided by operations
Your Answer
Sinking fund
True/False
Question
The basic limitation of the capital budgeting process lies in this fact that it involves
various estimations
Correct Answer True
Your Answer
False
Select The Blank
Question
The ________ collections may be useful for reducing the postal float as well as bank
float
Correct Answer Decentralised
Your Answer
Debtors
Multiple Choice Single Answer
Question
The ratio which measures the profits available to the equity shareholders on a per share
basis is termed as
Correct Answer Earning per share
Your Answer
Price Earnings ratio
Select The Blank
Question
If the company pays the dividend out of retained profits, then the amount to be drawn
from the reserve shall not exceed an amount equal to ________ of its paid up capital
and free reserves
Correct Answer 0.1
Your Answer
0.15
True/False
Question
During the phase of boom and prosperity the company will like to retain more profits
which can be used during the depression which is likely to follow
Correct Answer True
Your Answer
False
Multiple Choice Multiple Answer
Question
The depreciation is being charged for the following assets
Correct Answer Plant and Machinery , Building
Your Answer
True/False
Question
Land
Debt equity ratio is alternately called Leverage ratio
Correct Answer True
Your Answer
False
Multiple Choice Single Answer
Question
A systematic record of the events of the business leading to a presentation of a
complete financial picture is known as
Correct Answer Accounting
Your Answer
True/False
Question
Costing
Turnover ratios measure efficiency of a business in using its resources
Correct Answer True
Your Answer
True/False
Question
False
Wages/salaries is considered under Operating cashinflow
Correct Answer False
Your Answer
False
Multiple Choice Multiple Answer
Question
External sources of funds are
Correct Answer Funds from long term loans , Sale of fixed assets
Your Answer
Funds from long term loans