This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 10 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT and objective of financial management? A) Growth. B) Expenses. C) Liquidity. D) Solvency. Show Answer Correct Answer: B) Expenses. 2. Which of the following statements about financial market efficiency is/are true?1. If share prices reflect all information currently available, share prices cannot be predicted and gains through insider dealing are not possible2. Rules against insider dealing are less important in a strong-form efficient market A) 1 only. B) 2 only. C) Neither 1 nor 2. D) Both 1 and 2. Show Answer Correct Answer: C) Neither 1 nor 2. 3. Firms having longer processing cycle require A) More fixed capital. B) Less working capital. C) No fixed capital. D) More working capital. Show Answer Correct Answer: D) More working capital. 4. Finance function comprises A) Expenditure of funds only. B) Procurement of finance only. C) Procurement & effective use of funds. D) Safe custody of funds only. Show Answer Correct Answer: C) Procurement & effective use of funds. 5. Which of the following would be consistent with a more aggressive approach to financing working capital? A) Financing some long-term needs with short-term funds. B) Financing permanent inventory buildup with long-term debt. C) Financing seasonal needs with short-term funds. D) Financing short-term needs with short-term funds. Show Answer Correct Answer: A) Financing some long-term needs with short-term funds. 6. Which of the following is not an advantage of separation of ownership and management of corporations? A) Transfer of ownership can be facilitated without affecting the operations of the firm. B) Professional managers can be hired. C) Agency costs are incurred. D) Corporations can exist forever. Show Answer Correct Answer: C) Agency costs are incurred. 7. Decisions affecting financial risk and profitability of a business A) Capital. B) Investing Decision. C) All the above. D) None of the above. Show Answer Correct Answer: A) Capital. 8. Increase the amount of short-term borrowing would increase risk. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 9. Increase in accounts payable A) Operating Activities. B) Investing Activities. C) Financing Activities. D) None of the above. Show Answer Correct Answer: A) Operating Activities. 10. In the wider sense Capital structure mens- A) Owned Capital + Long-term loan. B) Owned Capital. C) Owned Capital + Loan. D) Owned Capital + Short-term Loan. Show Answer Correct Answer: C) Owned Capital + Loan. 11. How do you calculate the current ratio? A) Current Ratio = Current Assets + Current Liabilities. B) Current Ratio = Current Assets / Current Liabilities. C) Current Ratio = Total Assets / Total Liabilities. D) Current Ratio = Current Liabilities / Current Assets. Show Answer Correct Answer: B) Current Ratio = Current Assets / Current Liabilities. 12. What is the main goal of working capital management? A) Optimize cash flow. B) Maximize expenses. C) Increase liabilities. D) Reduce assets. Show Answer Correct Answer: A) Optimize cash flow. 13. Present Value also called A) Compound Value. B) Future Value. C) Discount Value. D) Both a & b. Show Answer Correct Answer: C) Discount Value. 14. What should goals be based off of? A) Wants. B) Needs. C) Values. D) Objectives. Show Answer Correct Answer: C) Values. 15. Project is accepted when: A) Net present value is greater than zero. B) Internal Rate of Return will be greater than cost of capital. C) Profitability index will be greater than unity. D) Any of the above. Show Answer Correct Answer: D) Any of the above. 16. Which of the following is a key financial concept for IS professionals? A) Budgeting. B) Return on Investment (ROI). C) Cost-Benefit Analysis. D) All of the above. Show Answer Correct Answer: D) All of the above. 17. Below are the duties of the financial manager, EXCEPT ..... A) Managing the flow of funds. B) Planning to obtain funds and use of funds. C) Responsible for obtaining funds. D) Giving funds to the company. Show Answer Correct Answer: D) Giving funds to the company. 18. What is factoring? A) Production Plan. B) New Financial Service. C) Cost of Sales. D) All of the above. Show Answer Correct Answer: B) New Financial Service. 19. Which of the following is the correct example of asset and liability?Yang manakah merupakan contoh aset dan liabiliti yang betul? A) Asset:Unit Trust / Amanah SahamLiability:Instalment balance / Baki ansuran. B) Asset:Saving / SimpananLiability:Property / harta. C) Asset:Loan / pinjamanLiability:Credit card debts / hutang kad kredit. D) Asset:Tax / cukai Liability:Real estate / hartanah. Show Answer Correct Answer: A) Asset:Unit Trust / Amanah SahamLiability:Instalment balance / Baki ansuran. 20. For which of the following reason(s) profit maximization concept is criticized-1. It is vague conceptually.2. It ignores the timing of returns.3. It ignores the risk factor4. Its emphasis is generally on short-run projects. Select the correct answer from the options given below. A) 1 & 2. B) 1, 2, 3 &4. C) 1, 2 & 3. D) 1. Show Answer Correct Answer: B) 1, 2, 3 &4. 21. The shareholder's equity of a corporation has three basic components. Which does not belong to the group? A) Accounts Payable. B) Reserves. C) Retained Earnings. D) Share Capital. Show Answer Correct Answer: A) Accounts Payable. 22. ..... are documents that summarize the changes resulting from business transactions that occur during an accounting period. A) Accounts payables. B) Financial statements. C) Income statements. D) Current assets. Show Answer Correct Answer: B) Financial statements. 23. The greater net cash flows, the faster the payback period A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 24. Which of the following is considered as cash inflow from the point of view of Lessee? A) Tax Savings on Annual maintanance cost. B) Lease management fees. C) Annual lease rentals. D) Cost of Asset. Show Answer Correct Answer: A) Tax Savings on Annual maintanance cost. 25. Which capital budgeting technique is generally preferred because it considers the time value of money and results in a value representing the expected change in wealth? A) Payback Period. B) Average Rate of Return (ARR). C) Internal Rate of Return (IRR). D) Net Present Value (NPV). Show Answer Correct Answer: D) Net Present Value (NPV). 26. The main variables of the TVM equation are A) Present value, future value, time, interest rate, and payment. B) Present value, future value, perpetuity, interest rate, and payment. C) Present value, future value, time, annuity, and interest rate. D) Present value, future value, perpetuity, interest rate, and principal. Show Answer Correct Answer: A) Present value, future value, time, interest rate, and payment. 27. The scope of financial management mainly covers: A) Marketing and promotion. B) Investment, financing, and dividend decisions. C) Recruitment and training. D) Office administration. Show Answer Correct Answer: B) Investment, financing, and dividend decisions. 28. Pertains to Current Assets and Liabilities A) Investing Activities. B) Operating Activities. C) Financing Activities. D) None of the above. Show Answer Correct Answer: B) Operating Activities. 29. EBIT is usually the same thing as A) Operating profit. B) Earnings before taxes. C) Funds provided by operations. D) Net income. Show Answer Correct Answer: A) Operating profit. 30. In 2014, 45% of Division I football programs lost money. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 31. Financial Planning helps in ..... A) Managing Business. B) Managing Human Resources. C) Forecasting Business Situations. D) All of the above. Show Answer Correct Answer: C) Forecasting Business Situations. 32. This ratio shows how well a company can convert its investment in assets into profits. A) Asset Turn-over Ratio. B) Liquidity Ratio. C) Profitability Ratio. D) Return on Asset. Show Answer Correct Answer: D) Return on Asset. 33. A company considering a capital investment of Rs 60, 00, 000. The investment estimates cashflow to the company Rs 10, 00, 000, 15, 00, 000, 20, 00, 000, 25, 00, 000 and 30, 00, 000 for 1-5 years respectively. Assuming 10% as cost of capital calculate the NPV of the project. A) Rs 1 crore. B) Rs 72, 20, 500. C) Rs 12, 20, 500. D) Rs 40, 00, 000. Show Answer Correct Answer: C) Rs 12, 20, 500. 34. Cash at bank is an example of A) More of current asset less of current liability. B) Less of current asset more of current liability. C) Current asset. D) Current liability. Show Answer Correct Answer: C) Current asset. 35. Which of the following best describes Murabaha as a source of finance within the Islamic banking model? A) A form of trade credit or loan. B) The equivalent of lease finance. C) A special kind of partnership where one partner gives money to another for investing it in a commercial enterprise. D) A relationship between two or more parties, who contribute capital to a business, and divide the net profit and loss pro-rata. Show Answer Correct Answer: A) A form of trade credit or loan. 36. Which of the following is an investment opportunity mentioned? A) Investing in savings accounts. B) Investing in stocks. C) Investing in bonds. D) Investing in collectibles. Show Answer Correct Answer: B) Investing in stocks. 37. Cannot be controlled and that must be paid to operate a business. They include depreciation on buildings and equipment and salaries paid to managers A) COMMITTED. B) DISCRETIONARY. C) Controllable. D) None of the above. Show Answer Correct Answer: A) COMMITTED. 38. An example of direct real income is: A) Fringe benefits. B) Barter system. C) Skill of family member. D) Buying a houseRead. Show Answer Correct Answer: C) Skill of family member. 39. The real rate is 2.50% and inflation is 3.25%. What is the approximate nominal rate? A) 5.75%. B) 5.25%. C) 5.65%. D) 3.25%. Show Answer Correct Answer: A) 5.75%. 40. Through them we can extract an analysis and in line with others, analyze the economic evolution. A) Profit maximization. B) Economic indicators. C) Monetary Politics. D) Financial Planning. Show Answer Correct Answer: B) Economic indicators. 41. If you take out a loan from a bank, you will be charged ..... A) For principal but not interest. B) For interest but not principal. C) For both principal and interest. D) For interest only. Show Answer Correct Answer: C) For both principal and interest. 42. The basic objective of finance manager is A) Maximising business's profit. B) Maximising size of organization. C) Maximising wealth of organization. D) All of the above. Show Answer Correct Answer: C) Maximising wealth of organization. 43. Issued by companies (businesses) drawn on their current/checking account with a bank A) Business Check. B) Traveler's Check. C) Certified Check. D) Personal Check. Show Answer Correct Answer: A) Business Check. 44. Money that is subtracted from one's bank account during a purchase is considered A) Income. B) Debit. C) Loan. D) Taxes. Show Answer Correct Answer: B) Debit. 45. Berapakah idealnya batas maksimal cicilan utang per bulan kita dibandingkan dengan pendapatan? A) 20%. B) 30%. C) 40%. D) None of the above. Show Answer Correct Answer: B) 30%. 46. Which of the following is a key component of financial management? A) Human resource training. B) Managing customer relationships. C) Budgeting and cash flow management. D) Product development. Show Answer Correct Answer: C) Budgeting and cash flow management. 47. The primary goal of financial manager is A) To maximise return. B) To maximize the stakeholder's wealth. C) To minimize risk. D) To maximize the shareholder's wealth. Show Answer Correct Answer: D) To maximize the shareholder's wealth. 48. It also refers to the firm's speed or pace in turning over accounts receivable, inventory and long-term assets. A) ASSET UTILIZATION OR ACTIVITY. B) DEBT-UTILIZATION OR LEVERAGE. C) All the above. D) None of the above. Show Answer Correct Answer: A) ASSET UTILIZATION OR ACTIVITY. 49. Apakah contoh matlamat kewangan jangka panjang? A) Membeli komputer riba baharu. B) Menyimpan untuk persaraan. C) Membeli telefon pintar baharu. D) Menyimpan untuk bercuti. Show Answer Correct Answer: B) Menyimpan untuk persaraan. 50. What does the owner of a miniature golf business provide her customers with?a) b) c) A) A promotion. B) An exchange. C) A service. D) A good. Show Answer Correct Answer: C) A service. 51. Paulo plans to buy a holiday villa in five years' time for cash. He estimates the cost will be $ 1.5m. He plans to set aside the same amount of funds each year for five years, starting immediately and earning a rate of 10% interest per annum compound.To the nearest $ 100, how much does he need to set aside each year? A) $ 223, 100. B) $ 223, 300. C) $ 223, 200. D) $ 223, 400. Show Answer Correct Answer: D) $ 223, 400. 52. Who is the financial manager of VNM Joint Stock Company? A) Mr. Vinh Tran. B) Ms. Mai Kieu Lien. C) Mr. Le Thanh Liem. D) Ms. Nguyen Thi Phuong. Show Answer Correct Answer: C) Mr. Le Thanh Liem. 53. Which TWO of the following are examples of internal stakeholders in a firm? A. Company directors B. Customers C. Suppliers D. Employees E. Finance providers A) B & D. B) B & C. C) A & D. D) A & E. Show Answer Correct Answer: C) A & D. 54. Functions of managerial finance are A) Planning for investments. B) Raising of funds. C) Working capital decisions. D) All the above. Show Answer Correct Answer: D) All the above. 55. Leasing of machinery can be categorized as A) Capital Budgeting decision. B) Fixed Asset. C) Investment decision. D) Financing decision. Show Answer Correct Answer: D) Financing decision. 56. The contract evidencing the existence of partnership A) Articles of Partnership. B) Service Contract. C) Articles of Incorporation. D) Contract of Partnership. Show Answer Correct Answer: A) Articles of Partnership. 57. The managerial process which is concerned with the planning and control of financial resources is called as: A) Control function. B) Finance function. C) Management function. D) None of these. Show Answer Correct Answer: B) Finance function. 58. What institution has authority to increase/reduce interest rate? A) Commercial banks. B) Central bank. C) Savings and loan associations. D) Credit unions. Show Answer Correct Answer: B) Central bank. 59. Combined Leverage =? A) Operating Leverage X Financial Leverage. B) Sales-Contribution. C) EBT X EBIT. D) Contribution X EBT. Show Answer Correct Answer: A) Operating Leverage X Financial Leverage. 60. Payment of monthly interest expense A) Operating Activities. B) Financing Activities. C) Investing Activities. D) None of the above. Show Answer Correct Answer: A) Operating Activities. ← PreviousNext →Related QuizzesCommerce QuizzesClass 12 QuizzesClass 12 Business Studies Chapter 9 Financial Management Quiz 1Class 12 Business Studies Chapter 9 Financial Management Quiz 2Class 12 Business Studies Chapter 9 Financial Management Quiz 3Class 12 Business Studies Chapter 9 Financial Management Quiz 4Class 12 Business Studies Chapter 9 Financial Management Quiz 5Class 12 Business Studies Chapter 9 Financial Management Quiz 6Class 12 Business Studies Chapter 9 Financial Management Quiz 7Class 12 Business Studies Chapter 9 Financial Management Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books