This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 1 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The profits or income of an entity or organisation can be used: A) To distribute it as dividend to the shareholders. B) To retain it in business in the form of accumulated profits. C) Either a or b. D) None of these. Show Answer Correct Answer: C) Either a or b. 2. Financil management process deals with A) Investments. B) Financig decisions. C) Both A & B. D) None of the above. Show Answer Correct Answer: B) Financig decisions. 3. Which is NOT a source of internal funds for SMEs? A) Profits retained in the business. B) Sales of fixed assets. C) Banking. D) Personal savings of the entrepreneur. Show Answer Correct Answer: C) Banking. 4. Long term financial plan usually exceed A) 20 years. B) 5 years. C) 10 years. D) 15 years. Show Answer Correct Answer: B) 5 years. 5. Amalgamation is governed by ..... A) AS 3. B) AS 14. C) AS 32. D) AS 21. Show Answer Correct Answer: B) AS 14. 6. Brandy Sdn Bhd purchased new fixed assets worth RM10, 000. This statement shows that Brandy Sdn Bhd utilizes A) Sources of fund. B) Uses of fund. C) All the above. D) None of the above. Show Answer Correct Answer: B) Uses of fund. 7. Evaluating your budget helps your to adjust both your budget and spending habits to reach your goals. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 8. To buy securities, i.e., share or debentures, it is compulsory to open A) D) Recurring Account. B) (b) Demat Account. C) (a) Current Account. D) C) Fixed Deposit Account. Show Answer Correct Answer: B) (b) Demat Account. 9. Which of the following is a function of the finance manager A) Mobilizing funds. B) Risk return trade off. C) Deployment of funds. D) All of the above. Show Answer Correct Answer: D) All of the above. 10. As legal tender, money is acceptable in payment of debts/liabilities A) Medium of Exchange. B) Store of Value. C) Means of Deferred Payment. D) Conveyance. Show Answer Correct Answer: C) Means of Deferred Payment. 11. Kepanjangan dari WTP dalam dunia Laporan Keuangan adalah A) Wajar Tapi Pas-pasan. B) Wajar Tanpa Pemaksaan. C) Wajar Tanpa Pengecualian. D) Wajar Tanpa Pemeriksaan. Show Answer Correct Answer: C) Wajar Tanpa Pengecualian. 12. An Information System uses technology to: A) Collect information. B) Store information. C) Process information. D) All of the above. Show Answer Correct Answer: D) All of the above. 13. A business will sometimes factor its receivable assets to meet its present and immediate cash needs. What does factoring mean? A) It's when a business sells its accounts receivable (i.e., invoices) to a third party at a discount. B) It's a debt document bond with a promise to pay back the amount borrowed, with interest, on a certain date. C) All the above. D) None of the above. Show Answer Correct Answer: A) It's when a business sells its accounts receivable (i.e., invoices) to a third party at a discount. 14. The financial strategy that involves the airline offering common shares to the public to raise funds is an example of: A) Asset-Backed Securities. B) Equity Financing. C) Debt Financing. D) Mezzanine Financing. Show Answer Correct Answer: B) Equity Financing. 15. Aktivitas Bisnis akan menghasilkan Laporan Laba/Rugi. Untuk menjalankan bisnis dibutuhkan Asset. Dan untuk memperoleh Asset diperlukan Sumber Dana. Berikut ini merupakan sumber dana, KECUALI: A) Utang pinjaman pihak ke-3 (ex. Bank, MTN, Obligasi, dll). B) Jawaban a dan b adalah benar keduanya. C) Modal (Dana Pemegang Saham). D) Piutang Pelanggan. Show Answer Correct Answer: D) Piutang Pelanggan. 16. Accounts Receivable A) Debit. B) Credit. C) All the above. D) None of the above. Show Answer Correct Answer: A) Debit. 17. Positive leverage effect brings A) (a) Gain for equity shareholders. B) (b) Loss for equity shareholders. C) C) Both (a) and (b). D) (d) None of the above. Show Answer Correct Answer: A) (a) Gain for equity shareholders. 18. Free cash flow is the ..... A) Cash flow from assets. B) Remaining cash free to distribute to creditors and owners of the firm. C) Cash that a company generates to operate the company. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. What does a high current ratio signify? A) It indicates a high level of debt. B) It reflects a decrease in asset value. C) It shows poor cash flow management. D) It signifies strong liquidity and financial health. Show Answer Correct Answer: D) It signifies strong liquidity and financial health. 20. The job of a financial manager is confined to A) Raising of funds. B) Management of funds. C) Raising of funds and their effective utilization. D) Effective utilization. Show Answer Correct Answer: C) Raising of funds and their effective utilization. 21. In February 2020, Mr Daniel received a total income of RM4 500. His monthly fixed expenses and variable expenses are RM2 880 and RMx respectively. There is a negative cash flow of RM620. Calculate the value of x?Pada bulan Februari 2020, gaji Daniel ialah RM 4 500. Belanja tetap dan belanja beruabahnya ialah RM 2 880 dan RM X. Terdapat aliran tunai yang negatif sebanyak RM620. Sila cari nilai bagi RM X. A) 3 880. B) 1 000. C) 2 240. D) 3 500. Show Answer Correct Answer: C) 2 240. 22. In February 2020, Mr Patrick received a total income of RM4500. His monthly fixed expenses and variable expenses are RM2880 and RMx respectively. There is a negative cash flow of RM620. Calculate the value of x A) 1000. B) 3500. C) 3880. D) 2240. Show Answer Correct Answer: D) 2240. 23. The company's cost of capital is called ..... A) Hurdle rate. B) Risk rate. C) Leverage rate. D) Return rate. Show Answer Correct Answer: C) Leverage rate. 24. Financial management in simple terms means A) Bookkeeping of accounts. B) Planning, organizing, and controlling money. C) Auditing financial records. D) Managing human resources. Show Answer Correct Answer: B) Planning, organizing, and controlling money. 25. Yang termasuk elemen neraca adalah A) Semua jawaban di atas tidak tepat. B) Pendapatan diterima dimuka. C) Biaya dibayar dimuka. D) Beban Bunga. Show Answer Correct Answer: C) Biaya dibayar dimuka. 26. If the "original price" a item is $ 18.00 and has a 15% discount, what is the new discounted sale price: A) $ 18.50. B) $ 15.00. C) $ 2.70. D) $ 15.30. Show Answer Correct Answer: D) $ 15.30. 27. What does the time value of money concept imply? A) Money loses value over time regardless of its earning potential. B) The time value of money concept only applies to investments in stocks. C) A sum of money today is worth more than the same sum in the future due to its potential earning capacity. D) A sum of money in the future is worth more than the same sum today due to inflation. Show Answer Correct Answer: C) A sum of money today is worth more than the same sum in the future due to its potential earning capacity. 28. A contract between the issuer and the lended specifying the terms of repayments and interest to be charged. A) Mortgage. B) Revenues. C) Payables. D) Bond. Show Answer Correct Answer: D) Bond. 29. A wealthy woman just died and left her pet cats the following estate:$ 50, 000 per year for the next 15 years with the first cash flow today. At a discount rate of 3.2%, what is the feline estate worth in today's dollars? A) $ 607, 180.14. B) $ 601, 180.14. C) $ 774, 000.00. D) $ 608, 180.14. Show Answer Correct Answer: A) $ 607, 180.14. 30. Financial markets can be classified by which of the following? A) Type of asset traded. B) Maturity of the financial asset. C) Owner of the financial asset. D) All of the above can be classifications of financial markets. Show Answer Correct Answer: D) All of the above can be classifications of financial markets. 31. Managers' Decisions are essential factors. A) Risk Return Trade Off. B) Cash Flows Are Source Of Values. C) Market Prices Reflect Information. D) Money Has Time Value. Show Answer Correct Answer: C) Market Prices Reflect Information. 32. Risk exists whenever actual outcomes can differ from expected outcomes. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 33. A firm's to satisfy its short-term obligations as they come due A) Profitability Ratios. B) Debt Ratios. C) Liquidity Ratios. D) Activity Ratios. Show Answer Correct Answer: C) Liquidity Ratios. 34. A sum of money in the hand has ..... value than the same sum to be paid in the future. A) Equal. B) No. C) Greater. D) Lesser. Show Answer Correct Answer: C) Greater. 35. NPV and IRR conflicts due to A) Different re-investment rate assumptions. B) Cost of capital. C) Cash flow patterns. D) Scale of investments. Show Answer Correct Answer: A) Different re-investment rate assumptions. 36. Protection of shareholders' interest is a feature of A) Financial accounting. B) Wealth maximization. C) Profit maximization. D) Budgetary control. Show Answer Correct Answer: B) Wealth maximization. 37. Which of the following are the basic needs that should be considered in financial planning?I. FoodII. ShelterIII. ClothesIV. Smart phones A) I, II and IV. B) II, III and IV. C) I, III and IV. D) I, II and III. Show Answer Correct Answer: D) I, II and III. 38. Which of the following is the formula of Free Cash Flow? A) [EBIT (1-T) + DA]-[CAPEX + $\Delta$NOWC]. B) [EBIT (1-T) + CAPEX]-[DA + $\Delta$NOWC]. C) Outstanding Shares x (Market Value of the stock + Book Value of the Stock). D) EBIT (1-T)-(Total Invested Capital x WACC). Show Answer Correct Answer: A) [EBIT (1-T) + DA]-[CAPEX + $\Delta$NOWC]. 39. Which one is not the four factors influencing capital structure decisions? A) Financial flexibility. B) The firm's tax position. C) Business risk. D) Government policies. Show Answer Correct Answer: D) Government policies. 40. How is the Debt-to-Income Ratio useful? A) It assesses the total income. B) It measures an individual's monthly debt payments in relation to their monthly income. C) It determines the interest rate. D) It calculates the total debt. Show Answer Correct Answer: B) It measures an individual's monthly debt payments in relation to their monthly income. 41. Akun-akun berikut ini termasuk bagian dari Laporan Neraca (Balance Sheet), kecuali: A) Account Receivable. B) Inventories. C) Depreciation and Amortisation. D) Patent & Godwill. Show Answer Correct Answer: C) Depreciation and Amortisation. 42. Advertising campaign is an example of A) Short term investment decision. B) Dividend decision. C) Financial decision. D) Long term investment decision. Show Answer Correct Answer: D) Long term investment decision. 43. The goal of financial management is to: A) Minimize risk for investors. B) Increase liquidity ratios. C) Maximize value for shareholders. D) Reduce debt to zero. Show Answer Correct Answer: C) Maximize value for shareholders. 44. Chinese invented pringting and the use of paper money during the Tang Dynasty A) 17th Century. B) 618-906 AD. C) 12th Century. D) 11th Century. Show Answer Correct Answer: B) 618-906 AD. 45. Which item is not funded by your tax dollars? A) Public Library. B) Local Fire Department. C) Department of Transportation (road crew). D) Fast Food Restaurant. Show Answer Correct Answer: D) Fast Food Restaurant. 46. Degree of operating leverage is calculated with the help of: A) Percentage change in EBT and percentage change in EBIT. B) Percentage change in EBIT and percentage change in sales. C) Percentage change in EBT and percentage change in sales. D) None of these. Show Answer Correct Answer: B) Percentage change in EBIT and percentage change in sales. 47. Internal Rate of Return (IRR) is equal to: A) The hurdle rate of return. B) The actual return of the investment. C) The cost of debt. D) The cost of equity. Show Answer Correct Answer: B) The actual return of the investment. 48. What percentage of your income is it generally recommended to save? A) 10%. B) 5%. C) 30%. D) 20%. Show Answer Correct Answer: D) 20%. 49. Treasurer should report to A) C chief executive officer. B) A. Chief financial officer. C) B. Vice president of operations. D) D. Board of directors. Show Answer Correct Answer: B) A. Chief financial officer. 50. That part of management which is connected with the financial activities iscalled ..... management. A) Personnel. B) Financial. C) Production. D) All the above. Show Answer Correct Answer: B) Financial. 51. What percentage of your income is recommended to be allocated for savings to achieve financial stability? A) 30%. B) 50%. C) 10%. D) 20%. Show Answer Correct Answer: C) 10%. 52. This statement presents the result of the firm's operation or performance for a given time A) Statement of Comprehensive Income. B) Statement of Changes in Equity. C) Income Statement. D) Statement of Financial Position. Show Answer Correct Answer: C) Income Statement. 53. Commercial paper is the instrument of ..... A) Primary market. B) Capital market. C) Secondary market. D) Money market. Show Answer Correct Answer: D) Money market. 54. How do you know when abusive lending is taking place? A) When the lender is pressuring you to take a loan. B) When you have done your "due diligence" and the loan office does not badger you to sign for the loan. C) All the above. D) None of the above. Show Answer Correct Answer: A) When the lender is pressuring you to take a loan. 55. The granting of a loan and the creation of debt; any form of deferred payment. A) Economy. B) Credit. C) Loan. D) Debt. Show Answer Correct Answer: B) Credit. 56. Computing the future value of an amount of money for any specified time period requires knowledge of the amount of principal and the interest rate A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 57. Cost of retained earnings is A) Historical cost. B) Marginal cost. C) Opportunity cost of capital. D) Explicit cost. Show Answer Correct Answer: C) Opportunity cost of capital. 58. In debenture, interest payable is A) Transferred to general reserve. B) Transferred to falling fund investment account. C) Charged against the firms profit. D) Appropriation of the company's profit. Show Answer Correct Answer: C) Charged against the firms profit. 59. ..... is at the heart of corporate finance, because it is concerned with making the best choices about project selection. A) Capital budgeting. B) Capital structure budgeting. C) Short-term budgeting. D) Capital structure. Show Answer Correct Answer: A) Capital budgeting. 60. Capital budgeting technique is a fundamental requirement of ..... ? A) Cost of debt. B) Cost of capital. C) Capital structure. D) All the above. Show Answer Correct Answer: B) Cost of capital. 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