This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 19 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The strategic role of financial management is to: A) Provide a system of recording financial statements. B) Outline the financial plans of the business. C) Provide guidelines to implement the strategic plan. D) Provide financial resources to implement strategic plan. Show Answer Correct Answer: D) Provide financial resources to implement strategic plan. 2. Greater exposure bigger the A) Risk. B) Forward rate. C) Spot rate. D) Investment. Show Answer Correct Answer: A) Risk. 3. The principle of risk and return suggests that there is no relationship between the amount of risk you take and the potential return you can earn A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 4. Which one is a Tendering Method? A) OTM. B) RFQ. C) LTM. D) Above All. Show Answer Correct Answer: D) Above All. 5. Which of the following statement on vertical analysis is false?a. For the Statement of Financial Position the divisor is Total Liabilitiesb. For the Statement of Comprehensive Income the divisor is Net Sales(Revenue)c. For the Cash Flow Statement the divisor is the total cash inflows A) A. B) B. C) C. D) A and b. Show Answer Correct Answer: A) A. 6. Deciding how to spend your money before you actually spend it. A) Balance. B) Cash. C) Account. D) Budget. Show Answer Correct Answer: D) Budget. 7. Which of the following measures the benefit gained from an IS investment? A) Return on Investment (ROI). B) Budgeting. C) Cost-Benefit Analysis. D) Risk Assessment. Show Answer Correct Answer: A) Return on Investment (ROI). 8. Sara earns $ 10.00 an hour. She worked 40 hours this pay period. Her gross pay was? A) $ 300 after taxes and deductions. B) $ 400.00. C) $ 275.00 after standard deductions. D) None of the above. Show Answer Correct Answer: B) $ 400.00. 9. ..... is the first step in strategy Formulation A) Environmental analysis. B) Organisational vision. C) Organisational Mission. D) Corporate analysis. Show Answer Correct Answer: C) Organisational Mission. 10. Which is not in assets A) Note receivable. B) Money. C) Printer. D) Note payable. Show Answer Correct Answer: D) Note payable. 11. Limitations on the use of financial statement includes the following except: A) Dependence on historical costs. B) Inflationary effects. C) Based on specific time period. D) None of the above. Show Answer Correct Answer: D) None of the above. 12. What method of managing exchange rates allows a currency to fluctuate but only within a relatively narrow range around a target rate? A) Crawling peg. B) Managed peg. C) Fluctuating peg. D) Floating peg. Show Answer Correct Answer: A) Crawling peg. 13. Which of the following is the correct example of asset and liability? A) Asset:Saving Liability:Property. B) Asset:Loan Liability:Credit card debts. C) Asset:Tax Liability:Real estate. D) Asset:Unit trust Liability:Instalment balance. Show Answer Correct Answer: D) Asset:Unit trust Liability:Instalment balance. 14. High operating leverage indicates a company has A) High fixed cost. B) Low variable cost. C) Both a and b. D) None of the above. Show Answer Correct Answer: C) Both a and b. 15. The time lag between placing an order and actual receipt of materials is known as A) Lead time. B) Lag time. C) Material receipt time. D) Order placement time. Show Answer Correct Answer: A) Lead time. 16. A firm's investment decision is also called the: A) Financing decision. B) Capital budgeting decision. C) Liquidity decision. D) None of these options. Show Answer Correct Answer: B) Capital budgeting decision. 17. Fixed capital is less required in which concern? A) Service provider. B) Manufacturer. C) Capital intensive. D) None of these. Show Answer Correct Answer: A) Service provider. 18. What is financial forecasting based on? A) Random guesses. B) Historical data. C) Market trends. D) Competitor analysis. Show Answer Correct Answer: B) Historical data. 19. ..... are intermediaries that channel the saving of individuals, businesses, and governments into loans or investments. A) Money markets. B) Kuala Lumpur Stock Exchange. C) Financial markets. D) Financial institutions. Show Answer Correct Answer: D) Financial institutions. 20. Mr. Wong earned RM3000 as a graphic designer in a company. He also works as a feelancer in his free time and earned an extra income of RM300 for the last month. In the same month, Mr. Wong's total expenses was RM 1400. Calculate Mr. Wong's cash flow and status of his cash flow A) RM 1900, Positive Cash Flow. B) RM 1600, Negative Cash Flow. C) RM 1600, Positive Cash Flow. D) RM 1900, Negative Cash Flow. Show Answer Correct Answer: A) RM 1900, Positive Cash Flow. 21. If the current assets of a firm is Rs 120000, long term debt-Rs 80000, current liability Rs 40000 then Net working capital is- A) 80000. B) 120000. C) Zero. D) 40000. Show Answer Correct Answer: A) 80000. 22. Which feature best characterizes the classical Gold Standard adopted by major economies by the late 19th century? A) Exchange rates pegged to silver units. B) Rates managed by central bank targets. C) Currencies fixed to a gold quantity. D) Currencies freely floating by demand. Show Answer Correct Answer: C) Currencies fixed to a gold quantity. 23. Which of the following is not true for mm model A) Share price goes up if dividend is paid. B) Share price goes down if dividend is not paid. C) Market value is unaffected by dividend policy. D) All of the above. Show Answer Correct Answer: C) Market value is unaffected by dividend policy. 24. Your university is running a special offer on tuition. This year's tuition cost is $ 18, 000. Next year's tuition cost is scheduled to be $ 19, 080. The university offers to discount next year's tuition at a rate of 6% if you agree to pay both years' tuition in full today. How much is the total tuition bill today if you take the offer? A) $ 36, 981. B) $ 36, 000. C) $ 28, 000. D) $ 36, 080. Show Answer Correct Answer: B) $ 36, 000. 25. What is ignored in Principle of Profit Maximization? A) Time Value of Money. B) Risk. C) Wealth Creation. D) All of the above. Show Answer Correct Answer: D) All of the above. 26. What is an Interest Rate? A) The monthly payment on a loan. B) The term of a loan. C) The total amount of a loan. D) The percentage charged on a loan or earned on an investment. Show Answer Correct Answer: D) The percentage charged on a loan or earned on an investment. 27. There is no operating leverage if there is no ..... A) Sales. B) Fixed Cost. C) Variable Cost. D) Profit. Show Answer Correct Answer: B) Fixed Cost. 28. If ICR is high, firm prefers A) (a) Debt. B) (b) Equity. C) C) Both (a) and (b). D) (d) None of the above. Show Answer Correct Answer: A) (a) Debt. 29. What is the role of a financial manager? A) To manage human resources and employee relations. B) To handle customer service and support operations. C) To oversee marketing strategies and brand development. D) The role of a financial manager is to oversee financial planning, manage investment activities, and ensure the organization's financial health. Show Answer Correct Answer: D) The role of a financial manager is to oversee financial planning, manage investment activities, and ensure the organization's financial health. 30. EBIT adalah ukuran yang penting suatu perusahaan, karena ..... A) Menunjukkan free cash. B) Karena menunjukan keuntungan akhir suatu perusahaan. C) Mengukur 'earning' sebelum dikurangi indirect cost dan transfer. D) Menunjukkan profitability suatu perusahaan dari segi Operasi. Show Answer Correct Answer: B) Karena menunjukan keuntungan akhir suatu perusahaan. 31. The relative proportion of debt, equity, and other securities that a firm has outstanding constitute its ..... A) Current ratio. B) Asset ratio. C) Capital structure. D) Retained earnings. Show Answer Correct Answer: C) Capital structure. 32. Which of the below is NOT a major component of interest rates? A) Historical interest rates. B) Real rate. C) Inflation premium. D) Default premium. Show Answer Correct Answer: A) Historical interest rates. 33. The existing 1, 000 shares of Rs 100 each altered to 10, 000 shares of Rs 10 each is ..... A) Conversion. B) Sub division. C) Surrender. D) Consolidation. Show Answer Correct Answer: B) Sub division. 34. What does an increase in the current ratio indicate about a company's short-term financial position? A) Higher profitability. B) Increased leverage. C) Improved liquidity. D) Declining solvency. Show Answer Correct Answer: C) Improved liquidity. 35. Which of the following is considered a fixed expense? A) Clothing. B) Entertainment. C) Rent. D) Groceries. Show Answer Correct Answer: C) Rent. 36. Which of the following is the correct statement of the conclusion of Modigliani and Miller on the relevance of dividend policy? A) Increase in retentions result in a higher growth rate. B) All shareholders are indifferent between receiving dividend income and capital gains. C) The value of the shareholders' equity is determined solely by the firm's investment selection criteria. D) Discounting the dividends is not an appropriate way to value the firm's equity. Show Answer Correct Answer: C) The value of the shareholders' equity is determined solely by the firm's investment selection criteria. 37. What is a dividend? A) Share of profit. B) Loan. C) Tax. D) Investment. Show Answer Correct Answer: A) Share of profit. 38. What is included in financial management according to the traditional A) Arranging finance. B) Using finance effectively. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: C) Both (a) and (b). 39. The "Rule of 72" is used to estimate: A) Taxable income. B) Time to double an investment. C) Life insurance coverage. D) Loan repayment duration. Show Answer Correct Answer: B) Time to double an investment. 40. Reserve Margin Working Capital used for A) Handling business contingencies like strikes and depressions. B) Expanding product lines. C) Investing in the stock market. D) Repaying long-term debts. Show Answer Correct Answer: A) Handling business contingencies like strikes and depressions. 41. Future value interest factor takes A) Compounding. B) Discounting. C) Deflation. D) Inflation. Show Answer Correct Answer: A) Compounding. 42. What is the main goal of financial management in a business? A) Maximizing employee benefits. B) Minimizing the number of transactions. C) Maximizing the value of the firm for its shareholders. D) Avoiding competition. Show Answer Correct Answer: C) Maximizing the value of the firm for its shareholders. 43. Funds are financial resources in the form of: A) Corporate capital. B) Business funds. C) Cash Equivalents. D) All of these. Show Answer Correct Answer: D) All of these. 44. Goodwin Transport paid $ 85 in dividends and $ 110 in interest expense during a given year. During that same year, the firm issued $ 40 in new equity shares, issued new debt of $ 65, and repaid $ 23 of old debt. What is the cash flow to creditors for that year? A) $ 68. B) $ 152. C) All the above. D) None of the above. Show Answer Correct Answer: A) $ 68. 45. Cost of retained earnings is equal to ..... A) Cost of bank loan. B) Cost of debt. C) Cost of equity. D) Cost of term loans. Show Answer Correct Answer: C) Cost of equity. 46. Advances received is an example of A) Current liability. B) Current asset. C) More of current asset less of current liability. D) Less of current asset more of current liability. Show Answer Correct Answer: A) Current liability. 47. Which term refers to the total amount of money earned by a business before deducting expenses? A) Expenditure. B) Profit (net). C) Turnover. D) Revenue. Show Answer Correct Answer: D) Revenue. 48. You are responsible for your financial well-being A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 49. Practical application of time value of money A) Preparation of loan repayment schedule. B) Sinking fund creation. C) Valuation problems. D) All the above. Show Answer Correct Answer: D) All the above. 50. High Interest Coverage Ratio means companies can have more of borrowed funds. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 51. How is the price-to-earnings (P/E) ratio calculated? A) P/E ratio = Market Price per Share / Earnings per Share (EPS). B) P/E ratio = Total Revenue / Market Price per Share. C) P/E ratio = Market Price per Share-Earnings per Share (EPS). D) P/E ratio = Earnings per Share (EPS) / Market Price per Share. Show Answer Correct Answer: A) P/E ratio = Market Price per Share / Earnings per Share (EPS). 52. Wealth maximization considers A) Only profit. B) Time value of money and risk. C) Only sales growth. D) Market share only. Show Answer Correct Answer: B) Time value of money and risk. 53. Jose earns $ 1, 000 a month. He spends 35% of his income on rent for his house. How much money is Jose spending on rent? A) $ 35. B) $ 300. C) $ 350. D) None of the above. Show Answer Correct Answer: C) $ 350. 54. Business finance deals with which of the following? A) Utilize funds efficiently. B) Procuring funds from different sources on fair terms. C) Both of these. D) None of these. Show Answer Correct Answer: C) Both of these. 55. Under net assets value method value of shares depends on ..... A) Net assets available to preference shareholders. B) Net assets available to equity shareholders. C) Total Assets. D) Net assets available to debenture holders. Show Answer Correct Answer: B) Net assets available to equity shareholders. 56. From ..... we currently receive money and goods, services and pay them in the future. A) Interest. B) Borrowing. C) Credit. D) Deposit. Show Answer Correct Answer: C) Credit. 57. What is the primary purpose of leasing finance? A) To acquire ownership of assets. B) To reduce operational costs. C) To use assets without purchasing them. D) To increase market share. Show Answer Correct Answer: C) To use assets without purchasing them. 58. Manakah pernyataan yang kurang tepat dalam menentukan dana darurat A) Ketahui jumlah hutang. B) 50 % di tabungan Bank. C) Ketahui jumlah pokok pengeluaran bulanan. D) 50% di produk investasi rendah resiko. Show Answer Correct Answer: A) Ketahui jumlah hutang. 59. Which of the following government policies would NOT tend to raise the level of demand in the economy? A) Tax cuts. B) Financial incentives to encourage personal saving. C) Employment training schemes. D) Increased expenditure on the economic infrastructure. Show Answer Correct Answer: B) Financial incentives to encourage personal saving. 60. A ..... is an estimate of a business's financial outlook for the few years. A) Financial forecast. B) Budget. C) Income statement. D) Financial plan. Show Answer Correct Answer: A) Financial forecast. ← 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