FM assgn :37: Parmeet
Multiple Choice Multiple Answer
Question
The techniques of Analysis and Interpretation of financial statements are
Correct
Answer
Your Answer
Ratio Analysis , Cash flow Analysis
Ratio Analysis , Cash flow Analysis
Multiple Choice Single Answer
Question
The Dividend in the form of cash is payable out of the current year's profit after providing
for sufficient amount of
Correct
Depreciation
Answer
Your Answer
Tax
Select The Blank
Question
________ will be shown as source of funds net of proposed dividend
Correct
Answer
Your Answer
True/False
Question
Correct
Answer
Your Answer
Operating Profit
Operating Profit
Proprietary ratios is the relationship between owners funds and total assets
True
True
Multiple Choice Multiple Answer
Question
The advantages of continuous stock taking are
Correct
Answer
Your Answer
The figures of stock can be readily
Account , It enables to locate slow
The figures of stock can be readily
Account , It enables to locate slow
available for the purpose of periodic Profit and Loss
and non-moving items
available for the purpose of periodic Profit and Loss
and non-moving items
Multiple Choice Multiple Answer
Question
The effects of overcapitalisation are
Correct
Answer
Your Answer
Reduction in the market value of the shares , Credit standing of the company in the
market falls down and difficulty in raising futher capital
Increase in competition , Reduction in the market value of the shares , Credit standing of
the company in the market falls down and difficulty in raising futher capital
Multiple Choice Multiple Answer
Question
Debt Service coverage ratio may be considered to be one of the most important ratios
calculated by the
Correct
Bankers , Financial Institutions
Answer
Your Answer
Bankers , Financial Institutions
True/False
Question
Correct
Answer
Your Answer
Internal rate of return indicates that the discounting rate at which net present value is
zero
True
True
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
Cash collected from customers , Bills Receivable dishonoured , Purchase stocks against
Answer
cash
Your Answer
Cash collected from customers , Bills Receivable dishonoured , Purchase stocks against
cash
True/False
Question
Correct
Answer
Your Answer
In Regular Stock Dividend policy, the company may pay dividend in the form of bonus
shares instead of cash
True
True
Select The Blank
Question
Retained earnings is a source of ________ finance
Correct
Answer
Your Answer
Internal
Internal
Multiple Choice Multiple Answer
Question
Disadvantages of Internal rate of return is
Correct
Answer
Your Answer
It is difficult to use and understand , It presupposes that the cash inflows can be
reinvested immediately to yield the return equivalent to Internal rate of return which is
not very realistic
It is difficult to use and understand , It presupposes that the cash inflows can be
reinvested immediately to yield the return equivalent to Internal rate of return which is
not very realistic
Select The Blank
Question
In case of Mortgage, the party who transfers the interest is called ________
Correct
Answer
Your Answer
True/False
Question
Correct
Answer
Your Answer
Mortgager
Mortgager
In any organisation, low creditors turnover ratio is considered to be favourable
True
True
Multiple Choice Single Answer
Question
Correct
Answer
Your Answer
The ratios which help the present or future stockholder in assessing the value of his
investment is known as
Ownership ratios
Profitability ratios
Multiple Choice Multiple Answer
Question
Uses of financial leverage are
Correct
Answer
Your Answer
It acts as a guideline in setting maximum limit upto which the company should use the
debt capital , It gives an indication regarding the extent to which Earning per share may
be affected due to every change in Earning before Interest and tax
It acts as a guideline in setting maximum limit upto which the company should use the
debt capital , It gives an indication regarding the extent to which Earning per share may
be affected due to every change in Earning before Interest and tax
Multiple Choice Single Answer
Question
The lenders of the borrowed funds are
Correct
Answer
Your Answer
Debentures
Debentures
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 Current assets turnover ratio is
________ .
Correct
3.04
Answer
Your Answer
3.04
True/False
Question
Correct
Answer
Your Answer
The funds flow statements can be prepared on monthly basis, six monthly basis or annual
basis
True
True
Multiple Choice Multiple Answer
Question
International financial function of the organisation comprises of :
Correct
Answer
Your Answer
Study of flow of funds beyond national boundaries , Exchange of currencies
Study of flow of funds beyond national boundaries , Exchange of currencies
Multiple Choice Multiple Answer
Question
Internal sources of cash are
Correct
Answer
Depreciation , Amortization of intangible assets
Your Answer
Depreciation , Amortization of intangible assets
Select The Blank
Question
In ABC analysis A class consist of ________.
Correct
Answer
Your Answer
only a small percentage of total number of items handled but are most important in
nature
only a small percentage of total number of items handled but are most important in
nature
Multiple Choice Multiple Answer
Question
The recommendations of the Dahejia committee included
Correct
Answer
Your Answer
the banks should not only be security oriented but
total financial position of the client , all cash credit
bifurcated in two categories
the banks should not only be security oriented but
total financial position of the client , all cash credit
bifurcated in two categories
they should take into consideration
accounts with banks should be
they should take into consideration
accounts with banks should be
Select The Blank
Question
Debt Equity ratio is alternatively called ________ ratios
Correct
Answer
Your Answer
Leverage
Leverage
Multiple Choice Multiple Answer
Question
Types of capital budgeting decisions
Correct
Answer
Your Answer
Replacements , Expansion , Diversification
Replacements , Expansion , Diversification
Match The Following
Question
Correct Answer
Your Answer
Normal Usage * Lead time for
emergency purchases
Danger level
Danger level
Maximum lead time * Maximum
usage
Re-order level
Re-order level
Reorder level + Re-order quantity Maximum level
- ( Minimum usage * Minimum
lead time )
Maximum level
Re-order level - ( Normal usage * Minimum level
Normal lead time )
Minimum level
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 Fixed assets turnover ratio is
________ .
Correct
Answer
Your Answer
True/False
Question
Correct
Answer
Your Answer
2.17
2.17
If the customer fails to pay the amount due from him the legal action should be initiated
against the customer after the limitation period is over
False
False
Select The Blank
Question
If a deposit is repaid after 6 months from the date of deposit but before its expiry, the
rate of interest on such deposit shall be reduced by ________ from the rate which the
company would have paid had the deposit been accepted for the period for which such
deposit had run
Correct
0.01
Answer
Your Answer
0.01
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
Earning per share
Answer
Your Answer
Earning per share
True/False
Question
Correct
Answer
Your Answer
Undercapitalisation indicates sound financial position and efficient management of the
company
True
True
Select The Blank
Question
As per the Tandon committee, variations between the projected figures and actuals may
be permitted to the extent of ________
Correct
0.1
Answer
Your Answer
0.1
Multiple Choice Single Answer
Question
The ratios giving the relationship between the financial charges of a firm and its ability to
service them is known as
Correct
Coverage ratios
Answer
Your Answer
Coverage ratios
Select The Blank
Question
Correct
Answer
Your Answer
Liquidity ratios indicate the ________ position of the organisation
Short term
Short term
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
Transaction motive
Answer
Your Answer
Transaction motive
Match The Following
Question
Correct Answer
Your Answer
Financial leverage
Earning before interest and tax / ( Earning before interest and tax / (
Earning before interest and tax - Earning before interest and tax Interest )
Interest )
Earnings per share
(Profit after tax - Preference
dividend) / Number of Equity
shares
Price earning ratio
Market Price per share / Earnings Market Price per share / Earnings
per share
per share
Operating leverage
Contribution / Earnings before
interest and tax
(Profit after tax - Preference
dividend) / Number of Equity
shares
Contribution / Earnings before
interest and tax
Multiple Choice Multiple Answer
Question
Advantages of ABC Analysis are
Correct
Answer
Your Answer
True/False
Question
Correct
Answer
Your Answer
True/False
Question
Correct
Answer
Your Answer
True/False
A close and strict control is facilitated on the most important items , Helps in maintaining
a high inventory turnover ratio , Optimum utilisation of the available funds can be
assured
A close and strict control is facilitated on the most important items , Helps in maintaining
a high inventory turnover ratio , Optimum utilisation of the available funds can be
assured
Usually, the implementation of capital expenditure proposals are spread over more than
one year
True
True
Turnover ratios indicate the efficiency of the organisation to use the various kinds of
assets by converting them in the form of Sales
True
True
Question
Correct
Answer
Your Answer
As per the SEBI guidelines revaluation reserve can be used for issue of bonus share
False
False
Multiple Choice Single Answer
Question
The dividends which accumulate even if profits are not made or dividends are not
declared and once the company earns profits the arrears of preference shares are
required to be paid first, then only the dividend can be paid on equity shares. This is
termed under
Correct
Cumulative preference shares
Answer
Your Answer
Cumulative preference shares
Multiple Choice Single Answer
Question
In the Working Capital Cycle, the cash available to the organization is converted back in
the form of
Correct
Cash
Answer
Your Answer
Cash
Multiple Choice Single Answer
Question
Interest and Dividend are categorised under
Correct
Answer
Your Answer
Non-operating expenses
Non-operating expenses
Multiple Choice Single Answer
Question
Own capital of the company includes
Correct
Answer
Your Answer
Shares
Shares
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
two
Answer
Your Answer
two
Multiple Choice Single Answer
Question
The weighted average cost of capital is referred to as
Correct
Answer
Your Answer
Average cost
Average cost
Multiple Choice Single Answer
Question
Correct
Answer
Your Answer
Internal rate of return may be called as
breakeven rate of the borrowing for the company
breakeven rate of the borrowing for the company