This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 23 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. WHICH OF THE FOLLOWING IS NOT A COMPONENT OF OWNERS' FUNDS? A) RESERVE AND SURPLUS. B) EQUITY SHARE CAPITAL. C) DEBENTURES. D) PREFERENCE SHARE CAPITAL. Show Answer Correct Answer: C) DEBENTURES. 2. What is the compound value of Rs. 10, 000 at the end of 3rd year at 12% interest when interest is calculated on quarterly basis? A) 13500. B) 14260. C) 15430. D) 14050. Show Answer Correct Answer: B) 14260. 3. With credit terms of 3/8, n/30, the customer's payment decision date is three days after the invoice received. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 4. Financial management and financial planning are synonyms of each other. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 5. Tammy has a basic account that allows her to deposit and withdraw money, write checks, and receive a monthly statement with no service charge if she manintains a minimum balance of $ 25.00. This type of account is called ..... A) Checking Account. B) IRA. C) Savings account. D) Retirement Account. Show Answer Correct Answer: A) Checking Account. 6. ..... is also referred to as working capital position or short-term financial position. A) LIQUIDITY. B) PROFITABILITY. C) All the above. D) None of the above. Show Answer Correct Answer: A) LIQUIDITY. 7. Explain the importance of financial analysis in decision-making. A) Financial analysis is only relevant for large corporations. B) Financial analysis has no impact on decision-making. C) Financial analysis is crucial in decision-making as it provides valuable insights into the financial performance and position of a business, enabling stakeholders to make informed and strategic choices. D) Financial analysis is only useful for historical purposes. Show Answer Correct Answer: C) Financial analysis is crucial in decision-making as it provides valuable insights into the financial performance and position of a business, enabling stakeholders to make informed and strategic choices. 8. Financial management involves making smart choices about spending, saving, and investing A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 9. Only revenue nature cash flow is shown in cash budget A) A. True. B) B. False. C) C. Other. D) None of the above. Show Answer Correct Answer: B) B. False. 10. Capital allocation is an important role of A) Marketing manager. B) HR manager. C) CEO. D) CFO. Show Answer Correct Answer: D) CFO. 11. Vice president of finance A) Internal User. B) External User. C) All the above. D) None of the above. Show Answer Correct Answer: A) Internal User. 12. I am walking 3 hours today to raise money for Juvenile Diabetes. How much can you pledge? A) Spending. B) Investing. C) Donating. D) Saving. Show Answer Correct Answer: C) Donating. 13. What role does diversification play in risk management? A) Diversification has no impact on risk management strategies. B) Diversification minimizes risk by spreading investments across different assets. C) Diversification increases risk by concentrating investments in a single asset. D) Diversification only benefits high-risk investments. Show Answer Correct Answer: B) Diversification minimizes risk by spreading investments across different assets. 14. A firm has common stock with a market price of $ 25 per share and an expected dividend of $ 2 per share at the end of the coming year. The growth rate in dividends has been 5%. The cost of the firm's commonstock equity is A) 10%. B) 8%. C) 13%. D) 5%. Show Answer Correct Answer: C) 13%. 15. Which is not a part of investment decision?a. Working capital managementb. Cash managementc. Credit managementd. Capital budgeting A) C. B) A & b. C) B & c. D) D. Show Answer Correct Answer: C) B & c. 16. Financial Management is concerned with- A) Profit Maximization. B) Both (A) & (C). C) Wealth Maximization. D) Both (A) & (C) plus Relation Maximization. Show Answer Correct Answer: B) Both (A) & (C). 17. The Marketing Mix can also be called ..... A) 4 P's. B) 4 C's. C) 2 M's. D) None of the above. Show Answer Correct Answer: A) 4 P's. 18. Which of the following is not a key aspect of financial management? A) Financial planning and budgeting. B) Capital budgeting. C) Risk management. D) Financial analysis and reporting. E) Marketing. Show Answer Correct Answer: E) Marketing. 19. Which of the following mechanisms would be most likely to help motivate managers to act in the best interest of shareholders? A) Decrease the use of restrictive covenants in bond agreements. B) Take actions that reduce the possibility of a hostile takeover. C) Have the board of directors allow managers greater freedom of action. D) Increase the compensation to stock options and reduce the proportion paid as cash salaries. Show Answer Correct Answer: D) Increase the compensation to stock options and reduce the proportion paid as cash salaries. 20. Of the following, which is NOT an example of a financial intermediary? A) Commercial bank. B) Insurance company. C) Investment bank. D) All of the above are financial intermediaries. Show Answer Correct Answer: D) All of the above are financial intermediaries. 21. Which is not the current assets? A) Debtors. B) Stock. C) Bills receivable. D) Goodwill. Show Answer Correct Answer: D) Goodwill. 22. John wants to buy a $ 5, 000 car. He plans to buy it in 3 years. How much should he save each month to pay for the car? A) $ 1, 666.67. B) $ 138.89. C) $ 208.33. D) None of the above. Show Answer Correct Answer: B) $ 138.89. 23. The main purpose of investment is: A) Avoiding expenses. B) Earning returns. C) Spending money. D) Saving taxes. Show Answer Correct Answer: B) Earning returns. 24. Apakah tumpuan utama apabila menetapkan matlamat kewangan? A) Melabur dalam saham. B) Utamakan keperluan berbanding kehendak. C) Maksimumkan pendapatan. D) Kurangkan perbelanjaan. Show Answer Correct Answer: B) Utamakan keperluan berbanding kehendak. 25. James worked 28 hours this week and is paid $ 9.50 per hour. What is his gross pay for the week? A) $ 265.00. B) $ 266.00. C) $ 270.00. D) $ 622.00. Show Answer Correct Answer: B) $ 266.00. 26. Good financial management means prioritizing your wants over your needs A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 27. Profitability and liquidity are two main objectives of ..... ? A) Cash management. B) Inventory management. C) Recieveable management. D) All of these. Show Answer Correct Answer: A) Cash management. 28. Which of the following best defines financial management? A) Managing people in the organization. B) Managing money and assets to achieve organizational goals. C) Managing only corporate governance. D) Managing short-term financing only. Show Answer Correct Answer: B) Managing money and assets to achieve organizational goals. 29. The following minimum line items must be presented in the profit or loss section except: A) Finance costs. B) Tax expense. C) Inventories. D) Revenue. Show Answer Correct Answer: C) Inventories. 30. The financial function is concerned with the flow of funds. True or False A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 31. What is the process of managing the finances of a company to meet its strategic goals known as? A) Finance Functions. B) Financial Planning. C) Financial Strategy. D) Role of Financial Manager. Show Answer Correct Answer: C) Financial Strategy. 32. What does internal source mean? A) A source from within the business. B) A source from outside the business. C) A source taken from international funding. D) A source from a specific investor. Show Answer Correct Answer: A) A source from within the business. 33. According to Phillippatus, financial management focuses on A) Profit planning. B) Acquisition and financing of short and long-term credits. C) Sales maximization. D) Cost reduction. Show Answer Correct Answer: B) Acquisition and financing of short and long-term credits. 34. Which is the first step before recording a journal entry? A) Preparing a trial balance. B) Closing the books. C) Analyzing the transaction. D) Posting to the ledger. Show Answer Correct Answer: C) Analyzing the transaction. 35. A small restaurant upgrades its inventory tracking and menu ordering system in order to better serve their customers and to order the correct food items each week. A) Distribution. B) Market Planning. C) Marketing Information Management. D) Product Management. Show Answer Correct Answer: D) Product Management. 36. ..... is the total amount of money owed to a business A) Accounts payable. B) Accounts receivable. C) Equity. D) Fixed assets. Show Answer Correct Answer: B) Accounts receivable. 37. Savings, in the form of money A) Medium of Exchange. B) Conveyance. C) Means of Deferred Payment. D) Store of Value. Show Answer Correct Answer: D) Store of Value. 38. What does the term 'working capital planning' refer to? A) Strategies for reducing debt. B) Strategies for managing long-term investments. C) Strategies for acquiring new assets. D) Strategies for managing daily cash flow. Show Answer Correct Answer: D) Strategies for managing daily cash flow. 39. Under which of the following circumstances a company is NOT likely to declare a higher dividend? A) When the earnings of the company are high. B) When a company has a lucrative forthcoming business opportunity(Growth opportunity ). C) When the cash flow position of the company is strong. D) None of the above. Show Answer Correct Answer: B) When a company has a lucrative forthcoming business opportunity(Growth opportunity ). 40. Financial management process consists of these processes except for ..... A) Setting goals. B) Evaluating financial status. C) Creating and carrying a financial plan. D) Estimating a financial plan. E) Reviewing and revising the progress. Show Answer Correct Answer: D) Estimating a financial plan. 41. Assets and liabilities are exposed to currency risk when their values can change with unexpected changes in currency values. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 42. Ratios that measure the liquidity of specific assets and efficiency in managing assets. A) Liquidity Ratio. B) Activity Ratio. C) Profitability Ratio. D) Solvency Ratio. Show Answer Correct Answer: B) Activity Ratio. 43. Dividends are paid out of A) General reserve. B) Gross profit. C) Profit after tax. D) Accumulated profits. Show Answer Correct Answer: C) Profit after tax. 44. The primary role of a financial institution is to act as the link between the depositors who have the money and the borrowers who need the money. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 45. Time value of money explains that: A) Value of rupee received today is worth more than it is in the future. B) Value of rupee received today is worth less than it is in the future. C) Value of rupee received today and at some other time in future is equal. D) None of them. Show Answer Correct Answer: A) Value of rupee received today is worth more than it is in the future. 46. A limitation of online banking is: A) The data is not safe from hackers. B) You have to log in regularly or your account could be closed. C) You have to have an internet connection. D) All of the above. Show Answer Correct Answer: D) All of the above. 47. Net working capital refers to excess of current liabilities over current assets. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 48. All financial decisions are taken considering A) Current year's profit. B) Positive cashflows. C) NPV. D) Current year's revenue. Show Answer Correct Answer: C) NPV. 49. The social cost benefits analysis is primarily used to determine the economic benefits of the activities in forms of which of the following: A) Discounted prices. B) Shadow prices. C) Augmented prices. D) Market prices. Show Answer Correct Answer: B) Shadow prices. 50. The ..... form shows how much money you made and how much you paid in taxes from the previous year. A) D-400. B) W-2. C) W-4. D) None of the above. Show Answer Correct Answer: B) W-2. 51. Which of the following is not a type of Long term finance source. A) Equity share capital. B) Debentures. C) Trade credit. D) Preference Share capital. Show Answer Correct Answer: C) Trade credit. 52. Primary objective of financial management is A) Maximizing shareholder's wealth. B) Effective use of funds. C) Availability of funds. D) Safety of funds. Show Answer Correct Answer: A) Maximizing shareholder's wealth. 53. Which of the following is NOT a type of financial model? A) Portfolio allocation models. B) Risk analysis models. C) Trading models. D) Market research models. Show Answer Correct Answer: D) Market research models. 54. You have $ 10, 000 available credit and you have used $ 9, 000 A) Improve your credit score. B) Hurt your credit score. C) All the above. D) None of the above. Show Answer Correct Answer: B) Hurt your credit score. 55. ..... is the main deriving force of business A) Working capital. B) Fixed capital. C) Profit. D) Employees. Show Answer Correct Answer: A) Working capital. 56. Which financial statement is crucial for evaluating a company's profitability over a specific period? A) Balance Sheet. B) Income Statement. C) Statement of Retained Earnings. D) Cash Flow Statement. Show Answer Correct Answer: B) Income Statement. 57. Short-term securities are sold in the capital market. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 58. The knowledge and skillset necessary to be an informed consumer and manage finances effectively A) Interest. B) Loan. C) Credit. D) Financial Literacy. Show Answer Correct Answer: D) Financial Literacy. 59. Deals with Opportunity Cost A) Money Has Time Value. B) Cash Flows Are Source of Values. C) Risk Return Trade Off. D) Market Prices Reflect Information. Show Answer Correct Answer: A) Money Has Time Value. 60. What will be the amount of interest for the second year as per "sum of the years' digits" (SOYD) method for interest allocation if interest for 3 years is Rs 9, 00, 000. A) 3, 00, 000. B) 3, 60, 00, 00. C) 4, 50, 000. D) 1, 50, 000. Show Answer Correct Answer: A) 3, 00, 000. ← 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