This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 22 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The finance manager is accountable for A) Earning capital assets of the company. B) Proper utilization of funds. C) Arrangement of financial resources. D) Effective management of a fund. Show Answer Correct Answer: C) Arrangement of financial resources. 2. Which of the following is an example of an operating expense for a business? A) Dividend payments to shareholders. B) Salary payments to employees. C) Loan interest payments. D) Purchase of a new building. Show Answer Correct Answer: B) Salary payments to employees. 3. Your ..... is the amount of money you have left after taxes are taken out. A) Budget. B) Taxes. C) Balance. D) Net Income. Show Answer Correct Answer: D) Net Income. 4. Cash flows are the money that is available to a business at any given time. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 5. The Real Cashflows must be discounted to get the present value at a rate equal to: A) Risk free rate of interest. B) Real Discount Rate. C) Inflation Rate. D) Money Discount Rate. Show Answer Correct Answer: B) Real Discount Rate. 6. What is the difference between fixed and variable expenses? A) Variable expenses are predictable and fixed over time. B) Fixed expenses are always higher than variable expenses. C) Fixed expenses fluctuate based on income levels. D) Fixed expenses remain constant, while variable expenses change with activity levels. Show Answer Correct Answer: D) Fixed expenses remain constant, while variable expenses change with activity levels. 7. Trade terms is one of the factors used in credit policy administration. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 8. Which of the following statements is true for a long term personal financial plan? A) Time frame of less than one year. B) Involve large amount of money. C) Time frame of less than six months. D) Time frame of more than one year. Show Answer Correct Answer: B) Involve large amount of money. 9. Why is evaluating Capital Budgeting decisions based on cash flows? A) Cash is more important for an organisation than profits. B) Cash flows are much easier to calculate compared to profits. C) Both a and b are incorrect. D) Both a and b are correct. Show Answer Correct Answer: C) Both a and b are incorrect. 10. Which of the following is a liability? A) Investment. B) Unit trust. C) Bank loan. D) Fixed deposit. Show Answer Correct Answer: C) Bank loan. 11. Purchasing insurance is a type of: A) Risk management. B) Expense. C) Speculation. D) Gambling. Show Answer Correct Answer: A) Risk management. 12. Record keeping of financial transactions is part of A) Strategic planning. B) Routine finance functions. C) Dividend decisions. D) Investment decisions. Show Answer Correct Answer: B) Routine finance functions. 13. Which of the following is a type of corporate planning? A) Market planning. B) Operational planning. C) Personal planning. D) Financial planning. Show Answer Correct Answer: B) Operational planning. 14. The cost of raising finance is A) Sinking cost. B) Promotion cost. C) Venture cost. D) Floatation cost. Show Answer Correct Answer: D) Floatation cost. 15. If operating leverage is 4, this means that- A) 1% change in sales will cause 4% change in EPS. B) 4% change in sales will cause 1% change in EPS. C) 4% change in sales will cause 1% change in EBIT. D) 1% change in sales will cause 4% change in EBIT. Show Answer Correct Answer: D) 1% change in sales will cause 4% change in EBIT. 16. Which item represents an Aeronautical Revenue source for a typical airport? A) Long-term car parking revenue. B) Hotel and land development lease revenue. C) Landing and parking fees for commercial aircraft. D) Advertising revenue from in-terminal displays. Show Answer Correct Answer: C) Landing and parking fees for commercial aircraft. 17. A floating exchange rate A) Determined by the national governments involved. B) Is determined by the actions of central banks. C) Is allowed to vary according to market forces. D) Remains extremely stable over long periods of time. Show Answer Correct Answer: C) Is allowed to vary according to market forces. 18. Ensuring that the fund to be invested will create value to a business or an individual in the form of profit. A) Financial Management. B) Finance. C) Financial Institution. D) Evaluating Investments. Show Answer Correct Answer: D) Evaluating Investments. 19. A debt evidenced by a "note, " which specifies the principal amount, interest rate, and date of repayment A) Credit. B) Credit Card. C) Debt. D) Loan. Show Answer Correct Answer: D) Loan. 20. A financial statement that shows the "projected costs" for things such as:Equipment & Supplies, Furniture & Fixtures, Remodeling, and Salaries/Legal Fees is called a: A) Income Statement. B) Balance Sheet. C) Payroll Sheet. D) Startup Cost Statement. Show Answer Correct Answer: D) Startup Cost Statement. 21. ..... is used to estimate future free cash flows. A) Objectives. B) Projected financial statement. C) Vision. D) Mission statement. Show Answer Correct Answer: B) Projected financial statement. 22. This pertains to the overall debt status of the company. It measures the degree of how the firm is financed A) DEBT-UTILIZATION OR LEVERAGE. B) ASSET UTILIZATION OR ACTIVITY. C) All the above. D) None of the above. Show Answer Correct Answer: A) DEBT-UTILIZATION OR LEVERAGE. 23. The expansion of CAPM is ..... A) Capital asset pricing model. B) Capital amount printing model. C) Capital asset printing model. D) Capital amount pricing model. Show Answer Correct Answer: A) Capital asset pricing model. 24. What is a potential consequence of poor financial management for a business? A) Increased profitability. B) Enhanced market reputation. C) Insufficient cash flow. D) Higher employee morale. Show Answer Correct Answer: C) Insufficient cash flow. 25. "Discount pricing" means the discount price is ..... than the original price? A) Higher. B) Lower. C) The Same. D) None of these. Show Answer Correct Answer: B) Lower. 26. ASSETS = LIABILITIES + OWNER'S EQUITY is known as the, ..... A) Financial statements. B) Income statement. C) Accounts payable. D) Accounting equation. Show Answer Correct Answer: D) Accounting equation. 27. A company's internal source of equity capital can be generated from retained earnings.What does a retained earning mean? A) It's a sum of money paid regularly by a company to its shareholders out of its profits. B) It's an asset account on the balance sheet that represents money due to a company in the short-term. C) It's the amount of net income left over for the business after it has paid out dividends to its shareholders. D) None of the above. Show Answer Correct Answer: C) It's the amount of net income left over for the business after it has paid out dividends to its shareholders. 28. What is included in financial planning? A) Determining financial objectives. B) Determining financial policies. C) Determining financial procedures. D) All of these. Show Answer Correct Answer: D) All of these. 29. Which of the following can lead to increased expected cash flow over time to the firm? A) Open and collaborative relations with the community. B) Qualified and motivated employees. C) Greater customer satisfaction. D) All of the above. Show Answer Correct Answer: D) All of the above. 30. Assume a profitable firm has neither issued nor repurchased any shares of its common stock, nor has it ever paid dividends. If the book value of the firm's stockholders' equity has increased, it follows that the: A) Firm's earnings per share has increased. B) Market value of the firm's buildings has increased. C) Market value of the firm's long-term debt has decreased. D) None of the above. Show Answer Correct Answer: A) Firm's earnings per share has increased. 31. What is the average CAGR (compounded annual growth rate) of Vinamilk's profit after tax from 2012 to 2021? A) 2.15%. B) 7.47%. C) 9.79%. D) None of the above. Show Answer Correct Answer: B) 7.47%. 32. What is a common focus of financial management training? A) Marketing and sales. B) Money management and budgeting. C) Customer service and relationship building. D) Risk management and financial analysis. Show Answer Correct Answer: B) Money management and budgeting. 33. What is the annual interest rate for the investment example? A) 3%. B) 4%. C) 5%. D) 6%. Show Answer Correct Answer: C) 5%. 34. Revenues are recorded at the point of sale and costs when they are incurred, not necessarily when a firm receives or pays out cash A) FINANCIAL STATEMENT. B) Cash flow approach. C) Accrual-based Approach. D) Income Statement. Show Answer Correct Answer: C) Accrual-based Approach. 35. What is a benefit of proper allocation of funds? A) Increased business expenses. B) Reduced investment opportunities. C) Enhanced operational efficiency. D) Higher risk of bankruptcy. Show Answer Correct Answer: C) Enhanced operational efficiency. 36. A company has equity share capital of Rs 2 crores divided into equity shares of Rs 10 each and preference share capital of Rs 0.5 crores. Total assets of the Company are Rs 12 crores and liabilities amounting to Rs 3 Crores. Calculate the intrinsic value of Shares. A) Rs 4.5. B) Rs 45. C) Rs 6.25. D) Rs 62.5. Show Answer Correct Answer: B) Rs 45. 37. The importance of 'Trading on Equity' lies in the fact that if the company is A) Preference Shareholders. B) Government. C) Equity Shareholders. D) Lenders. Show Answer Correct Answer: C) Equity Shareholders. 38. Which formula is used to measure the degree of financial leverage A) EBIT/EBT. B) EBIT/EBT. C) Contribution/EBIT. D) EBT/EBIT. Show Answer Correct Answer: A) EBIT/EBT. 39. Which is the best example of EARNED income? A) Interest earned on a savings account. B) Money earned from working at the mall. C) Money received from Social Security. D) Money inherited from a relative. Show Answer Correct Answer: B) Money earned from working at the mall. 40. Amount by which total revenues exceeds total revenues. A) Revenues. B) Exoenses. C) Net Loss. D) Net Income. Show Answer Correct Answer: D) Net Income. 41. This is a legal business entity created by the government. A) Sole Proprietorship. B) Partnership. C) Corporation. D) Cooperative. Show Answer Correct Answer: C) Corporation. 42. The type of preference share which is eligible for arrears of dividend A) Cumulative. B) Covertible. C) Participating. D) Redeemable. Show Answer Correct Answer: A) Cumulative. 43. Reconciles the firm's operating, investment, and financing cash flows A) Cash Flow Analysis. B) Notes to Financial Statements. C) Statement of Cash Flows. D) Statement of Retained Earnings. Show Answer Correct Answer: C) Statement of Cash Flows. 44. Which of the following statements is TRUE about the nature of financial management? A) It only deals with accounting records. B) It is future-oriented and decision-focused. C) It ignores risk and uncertainty. D) It is only concerned with small firms. Show Answer Correct Answer: B) It is future-oriented and decision-focused. 45. Setting up direct deposit can give you faster access to your money A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 46. A notebook costs $ 7.50. Tax is 7%. Find the amount of tax for the notebook. A) .55. B) .35. C) .53. D) .50. Show Answer Correct Answer: C) .53. 47. What are the different types of financial risks? A) Investment risk. B) Currency risk. C) Tax risk. D) Market risk, credit risk, operational risk, liquidity risk, legal risk. Show Answer Correct Answer: D) Market risk, credit risk, operational risk, liquidity risk, legal risk. 48. Kelemahan metode NPV antara lain A) Tells whether firm value is increased. B) Considers all cash flows. C) Requires estimate of cost of capital. D) Considers the time value of money. Show Answer Correct Answer: C) Requires estimate of cost of capital. 49. An investment is indifferent when: A) The NPV to all capital providers is equal to the weighted average cost of capital. B) The NPV to all equity providers is equal to the cost of equity. C) Equity IRR is equal to the cost of equity. D) Equity IRR is equal to the weighted average cost of capital. Show Answer Correct Answer: C) Equity IRR is equal to the cost of equity. 50. Earnings per share maximization is a feature of A) Capital budgeting. B) Wealth maximization. C) Public finance. D) Profit maximization. Show Answer Correct Answer: D) Profit maximization. 51. An ..... is a review of the financial statements of business and the accounting practices that were used to produce them ..... A) Statement of cash flows. B) Income statement. C) Financial statement. D) Audit. Show Answer Correct Answer: D) Audit. 52. Depreciation is best described as: A) A decrease in market value of an asset. B) Cash spent on maintenance. C) Increase in liabilities. D) Allocation of an asset's cost over its useful life. Show Answer Correct Answer: D) Allocation of an asset's cost over its useful life. 53. Issued by those with current account with the bank to pay for things they want to buy or for their debts A) Warehouse Receipt. B) Money Order. C) Check. D) Bank Draft. Show Answer Correct Answer: C) Check. 54. Traditionally the role of Finance Manager was restricted to acquisition and efficient allocation of funds A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 55. The lifeblood of all Business concern. A) Credit. B) Tip. C) Loan. D) Finance. Show Answer Correct Answer: D) Finance. 56. Which of the following is studied with the help of financial leverage? A) Interest rate Risk. B) Marketing Risk. C) Financing Risk. D) Foreign Exchange Risk. Show Answer Correct Answer: C) Financing Risk. 57. Which of the following helps prevent overspending on IS projects? A) Budgeting. B) Risk Assessment. C) Return on Investment (ROI). D) Cost-Benefit Analysis. Show Answer Correct Answer: A) Budgeting. 58. CAPITAL STRUCTURE DENOTES THE COMPOSITION OF A) SHARE CAPITAL. B) LONG TERM AND SHORT TERM DEBTS. C) DEBT AND EQUITY. D) RESERVES AND SURPLUS. Show Answer Correct Answer: B) LONG TERM AND SHORT TERM DEBTS. 59. According to MM approach the total value of the firm is A) Static. B) Increase with decrease in W ACC. C) Increase with increase in WACC. D) Variable. Show Answer Correct Answer: A) Static. 60. Also known as dynamic measure or trend ratios. This involves the comparison and measurement of financial statements of two or more periods. A) HORIZONTAL ANALYSIS. B) VERTICAL ANALYSIS. C) All the above. D) None of the above. Show Answer Correct Answer: A) HORIZONTAL ANALYSIS. ← 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