This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 24 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 24 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the operating cycle? A) The time taken for the production process. B) The time taken to convert cash into cash again. C) The time taken to convert cash into goods. D) The time taken to calculate profits. Show Answer Correct Answer: B) The time taken to convert cash into cash again. 2. Which type of dividend payment policy has the advantage that if the firms earnings drop dividend will still be maintained at the relatively constant level A) Constant payout ratio policy. B) Regular dividend policy. C) Low regular and extra dividend policy. D) None of above. Show Answer Correct Answer: B) Regular dividend policy. 3. Which of the following is a financial activity you are likely to do in everyday life? A) Ordering food. B) Posting on social media. C) Watching movies. D) Using UPI to make payments. Show Answer Correct Answer: D) Using UPI to make payments. 4. In international finance, what does political risk primarily refer to? A) Risk of war between trading nations. B) Risk of trade sanctions. C) Risk of government actions affecting business operations. D) Risk of currency devaluation. Show Answer Correct Answer: C) Risk of government actions affecting business operations. 5. How can a company improve its working capital position? A) Optimize inventory, speed up receivables, extend payables, reduce expenses, increase sales. B) Cut down on marketing efforts. C) Shorten payment terms for customers. D) Increase inventory levels. Show Answer Correct Answer: A) Optimize inventory, speed up receivables, extend payables, reduce expenses, increase sales. 6. What is the other name of long term decision? A) Working Capital. B) Financial management. C) Capital Budgeting. D) Gross working capital. Show Answer Correct Answer: C) Capital Budgeting. 7. . A firm will have favourable leverage if it A) Equity. B) Debt. C) Earnings. D) Interest. Show Answer Correct Answer: C) Earnings. 8. The objective of wealth maximization takes into account A) Amount of returns expected. B) Timing of anticipated returns. C) Risk associated with uncertainty of returns. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. Cost of equity of a company is 20 %. Rate of floatation cost is 5 %. Rate of personal income tax is 30 %. Calculate cost of retain earning? A) 13.3 %. B) 26 %. C) 14.7 %. D) 21 %. Show Answer Correct Answer: A) 13.3 %. 10. .... is the amount paid at the time of taking delivery of goods A) Cash price. B) Down payment. C) Principal. D) Instalment. Show Answer Correct Answer: B) Down payment. 11. What does ROI stand for and why is it important? A) Revenue Over Investment. B) Rate of Interest. C) Return on Investment. D) Return on Income. Show Answer Correct Answer: C) Return on Investment. 12. Retained earnings are affected by A) (b) Investment decision. B) C) Dividend decision. C) (a) Financing decision. D) (d) Capital structure. Show Answer Correct Answer: B) C) Dividend decision. 13. Efficiency is generated by: A) Maximising returns for minimal costs. B) Increasing the number of inputs and outputs. C) Lowering costs of production. D) Increasing competitiveness in the market. Show Answer Correct Answer: A) Maximising returns for minimal costs. 14. If current liabilities are RM100, 000 and current assets are RM200, 000, what is the current ratio? A) 1.50. B) 1.20. C) 2.00. D) NOT IN THE CHOICES. E) 0.50. Show Answer Correct Answer: C) 2.00. 15. What does PFM stand for? A) Personal Fund Management. B) Private Fund Management. C) Personal Financial Management. D) Public Financial Management. Show Answer Correct Answer: C) Personal Financial Management. 16. Dividend paid in the form of shares is called A) Right shares. B) Bonus shares. C) Property dividend. D) None of the above. Show Answer Correct Answer: B) Bonus shares. 17. Effective financial management ensures: A) Proper mobilization and utilization of funds. B) Over-dependence on external borrowing. C) Unnecessary risks are taken. D) Sole focus on profit maximization without considering stakeholders. Show Answer Correct Answer: A) Proper mobilization and utilization of funds. 18. Which of the following sources of capital should not be selected by a business if its fixed cost is high? A) Equity shares. B) Preference shares. C) Debentures. D) All of the above. Show Answer Correct Answer: C) Debentures. 19. Regulation of stock market is a function of Reserve Bank of India A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 20. Which answer below is an 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) None of the above. Show Answer Correct Answer: B) Money earned from working at the mall. 21. What is the primary objective of financial management? A) Maximizing shareholder value. B) Reducing operational costs. C) Increasing employee satisfaction. D) Enhancing product quality. Show Answer Correct Answer: A) Maximizing shareholder value. 22. Salah satu tujuan pemilik dan pengelola perusahaan dalam mempelajari manajemen keuangan adalah? A) Membuat keputusan dengan tujuan untuk memaksimalkan nilai perusahaan. B) Membuat keputusan yang dapat merampingkan organisasi. C) Membuat keputusan yang dapat memperluas pangsa pasar perusahaan. D) Membuat keputusan yang dapat meningkatkan profit perusahaan. Show Answer Correct Answer: A) Membuat keputusan dengan tujuan untuk memaksimalkan nilai perusahaan. 23. Long term financial goals usually takes more than 5 years to achieve. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 24. Seasonal Variable Working Capital required for A) Long-term investment. B) Manage fixed assets. C) During active business seasons of the year. D) During unexpected emergencies. Show Answer Correct Answer: C) During active business seasons of the year. 25. Participants who receive more money than they spend. A) Finance Manager. B) Surplus Units. C) Employees. D) Deficit Unit. Show Answer Correct Answer: B) Surplus Units. 26. Cash & Cash Equivalent-24, 890Held for Trading-10, 000Trade and Other Receivables-16, 000Inventory-8, 960If total current liabilities amounted to 19, 900. How much is the quick assets? A) 50, 890. B) 49, 850. C) 40, 890. D) 24, 890. Show Answer Correct Answer: A) 50, 890. 27. What is a key aspect of valuing a company? A) Employee satisfaction. B) Financial planning. C) Market trends. D) Valuation of assets. Show Answer Correct Answer: D) Valuation of assets. 28. The federal program that assists older Americans with health insurance and income is called? A) FICA. B) EOC. C) BBT. D) FBI. Show Answer Correct Answer: A) FICA. 29. Under existing tax laws, ordinary income tax rates apply A) Cattle. B) Barter. C) Corporate Capital Gains. D) Cowrie shell. Show Answer Correct Answer: C) Corporate Capital Gains. 30. What are the three major fields of finance? A) Managing assets and raising capital. B) Government revenue, expenditure, and debt. C) Investments, capital markets, and financial economics. D) Public finance, corporate finance, and personal finance. Show Answer Correct Answer: D) Public finance, corporate finance, and personal finance. 31. What is not the main reason that companies go "global" ? A) To diversify. B) To seek raw materials. C) To narrowed their markets. D) To avoid political hurdles. Show Answer Correct Answer: C) To narrowed their markets. 32. In terms of the maturity of assets issued, which of the following markets have the shortest maturity period? A) Call Money Market. B) Commercial Paper Marke. C) Treasury Bills Market. D) Certificates of Deposit Market. Show Answer Correct Answer: A) Call Money Market. 33. In financial analysis, what does the term "working capital" refer to? A) Total assets minus total liabilities. B) Current assets minus current liabilities. C) Revenue minus expenses. D) Long-term assets. Show Answer Correct Answer: B) Current assets minus current liabilities. 34. Variable cost in an organization A) Be fixed according to the rate of growth. B) Does not change with volume of production. C) Remains constant. D) Changes with the volume of production. Show Answer Correct Answer: D) Changes with the volume of production. 35. The list below shows the financial management process.1. Setting goals2. Evaluating financial status3. Creating out financial plan4. Carrying out financial plan5. XName the process X. A) Terminating the financial plan. B) Preparing a new plan. C) Reviewing and revising progress. D) Completing financial plan. Show Answer Correct Answer: C) Reviewing and revising progress. 36. The market for supplier and demanders for long term securities is ..... A) Capital market. B) Money market. C) All the above. D) None of the above. Show Answer Correct Answer: A) Capital market. 37. Which strategy involves determining the percentage of profits to distribute to shareholders? A) Working capital planning. B) Investment planning. C) Dividend strategy. D) Capital structure planning. Show Answer Correct Answer: C) Dividend strategy. 38. Convert 7% to a decimal A) .07. B) .007. C) 7.0. D) None of the above. Show Answer Correct Answer: A) .07. 39. From the below-mentioned items which are financial assets? A) B &C. B) Machines. C) Bonds. D) Stocks. Show Answer Correct Answer: C) Bonds. 40. ..... is the time span between acquisition of goods and realisation of sale proceeds. A) Account receivable period. B) Payback period. C) Operating cycle. D) Working Capital. Show Answer Correct Answer: C) Operating cycle. 41. Favourable Financial Leverage increase the earning of equity share holders A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 42. Which one of the following best states the primary goal of financial management? A) Maximize current dividends per share. B) Maximize the current value per share. C) Increase cash flow and avoid financial distress. D) Minimize operational costs while maximizing firm efficiency. E) Maintain steady growth while increasing current profits. Show Answer Correct Answer: B) Maximize the current value per share. 43. NPV will be positive if A) Discounted cash flows justify initial investment. B) They won't be. C) Companies work hard. D) Money is given. Show Answer Correct Answer: A) Discounted cash flows justify initial investment. 44. When a private company buys a publicly traded company as a means of acquiring public status, it is classified as ..... takeover. A) Straight takeover. B) Ballout takeover. C) Reverse takeover. D) Hostile takeover. Show Answer Correct Answer: C) Reverse takeover. 45. How can financial ratios be used in financial analysis? A) Financial ratios can be used in financial analysis to evaluate a company's performance, profitability, liquidity, solvency, and efficiency. B) Financial ratios can be used in financial analysis to bake a cake. C) Financial ratios can be used in financial analysis to determine the weather forecast. D) Financial ratios can be used in financial analysis to play basketball. Show Answer Correct Answer: A) Financial ratios can be used in financial analysis to evaluate a company's performance, profitability, liquidity, solvency, and efficiency. 46. Which of the followings is NOT the roles of financial manager? A) Forecasting and Planning. B) Deal with financial market. C) Financing decision. D) Advertise the product. Show Answer Correct Answer: D) Advertise the product. 47. In a financial market, the price to borrow money is called the? A) Credit. B) Deposit. C) Cost. D) Interest Rate. Show Answer Correct Answer: D) Interest Rate. 48. Which of the following would not be financed from working capital? A) A new personal computer for the office. B) Accounts receivable. C) Credit sales. D) Cash float. Show Answer Correct Answer: A) A new personal computer for the office. 49. Mr. Singh's company uses labour intensive technique, he requires ..... fixed capital A) More. B) Less. C) No. D) None of the above. Show Answer Correct Answer: B) Less. 50. Accounting profits and cash flows are generally: A) Unequal because of how income is recognized according to GAAP. B) Unequal because cash inflows must occur before revenue recognition. C) All the above. D) None of the above. Show Answer Correct Answer: A) Unequal because of how income is recognized according to GAAP. 51. Also called "profit" . Earnings or margin A) Pretax Income. B) Gross Profit. C) Other Income. D) Income. Show Answer Correct Answer: D) Income. 52. Crucial decision made by financial manager it's concerned in borrowing and funds allocation for investment is? A) Marketing Decision. B) Investment Decision. C) Purchase Decision. D) Financing Decision. Show Answer Correct Answer: D) Financing Decision. 53. Financial management is essential for businesses because it: A) Enables efficient allocation of resources and strategic decision-making. B) Enhances financial performance and profitability. C) Helps attract investors and secure external funding. D) Assists in managing financial risks and uncertainties. E) All of the above. Show Answer Correct Answer: E) All of the above. 54. What has the same meaning as positive cash flow? A) Surplus. B) Deficit. C) All the above. D) None of the above. Show Answer Correct Answer: A) Surplus. 55. The capital budget is associated with. A) Long terms and short terms assets. B) Fixed assets. C) Long terms assets. D) Short term assets. Show Answer Correct Answer: C) Long terms assets. 56. This is the total amount of net income the company decides to keep. A) Management Income. B) Shareholder equity. C) Retained Income. D) Financial Income. Show Answer Correct Answer: C) Retained Income. 57. Entering multiple foreign markets to expand sales volume and customer segments primarily delivers which reward of international finance? A) Higher profit opportunities. B) Portfolio diversification. C) Cheaper sources of capital. D) Access to larger global markets. Show Answer Correct Answer: D) Access to larger global markets. 58. What does risk refer to in financial management? A) Risk is the guaranteed return on investments. B) Risk refers to the total amount of capital invested. C) Risk in financial management refers to the potential for loss or uncertainty in investment returns. D) Risk is the process of maximizing profits without any losses. Show Answer Correct Answer: C) Risk in financial management refers to the potential for loss or uncertainty in investment returns. 59. The proper utilization of resources to achieve the goals and objectives is called ..... A) Investment. B) Management. C) Plan. D) Price. Show Answer Correct Answer: B) Management. 60. The Walters approaching gordons approach come under A) Theory of irrelevance. B) Theory of relevance. C) Both a and b. D) None of these. Show Answer Correct Answer: B) Theory of relevance. ← 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