This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 28 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Suppose you postpone consumption and invest at 9% when inflation is 3%. What is the approximate real rate of your reward for saving? A) 7%. B) 3%. C) 5%. D) 6%. Show Answer Correct Answer: D) 6%. 2. The financial goal of a corporation is to maximize: A) Market value of the firm. B) Managers' benefits. C) Profits. D) Sales. Show Answer Correct Answer: A) Market value of the firm. 3. Puan Iza's income:Salary:RM4500Comission:RM820Rental received:RM650Dividend:RM700Calculate active income of Puan Iza. A) RM6670. B) RM4500. C) RM5970. D) RM5320. Show Answer Correct Answer: D) RM5320. 4. Financial Planning link A) (a) Investment and dividend decision. B) (b) Investment and financing decision. C) C) Dividend and financing decision. D) (d) None of the above. Show Answer Correct Answer: B) (b) Investment and financing decision. 5. Fixed assets are items of value that will be held for more than one year. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 6. Medicaid is a ..... health insurance program to help people who cannot afford health care costs. A) Private. B) Government. C) Military. D) None of the above. Show Answer Correct Answer: B) Government. 7. What is the present value of a stream of annual end-of-the-year annuity cash flows if the discount rate is 0%, and the cash flows of $ 50 last for 20 years? A) Less than $ 1, 000. B) More than $ 1, 000. C) This question cannot be answered because we have an interest rate of 0.0%. D) Exactly $ 1, 000. Show Answer Correct Answer: D) Exactly $ 1, 000. 8. Financial controller is responsible A) Cash management. B) Credit management. C) Securities management. D) None of these. Show Answer Correct Answer: D) None of these. 9. When the stock market index is rising, a company may issue ..... in order to meet its financial requirements. A) Debentures. B) Bonds. C) Equity shares. D) None of the above. Show Answer Correct Answer: C) Equity shares. 10. From the following data find out combined leverage. EBIT Rs.10, 00, 000; Fixed cost Rs.2, 00, 000; EBT Rs.8, 00, 000. A) 7.53. B) 7.35. C) 3.75. D) 5.73. Show Answer Correct Answer: C) 3.75. 11. Nurin plans to save RM400 per month for 2 years to buy a new laptop. How much will she have saved at the end of the period? A) RM8000. B) RM9600. C) RM4800. D) RM12000. Show Answer Correct Answer: B) RM9600. 12. Which of the following is NOT listed as a key objective of financial management? A) Liquidity. B) Market Share. C) Profitability. D) Efficiency. Show Answer Correct Answer: B) Market Share. 13. The concept of Financial management is. A) Profit maximization. B) All features of obtaining and using financial resources for company operations. C) Organization of funds. D) Effective Management of every company. Show Answer Correct Answer: B) All features of obtaining and using financial resources for company operations. 14. This type of share allows shareholders to convert current shares to equity shares. A) Irredeemable preference Share. B) Cumulative preference share. C) Convertible preference share. D) Non-cumulative preference share. Show Answer Correct Answer: C) Convertible preference share. 15. What are the three main types of financial statements? A) Income statement, balance sheet, and cash flow statement. B) Profit statement, equity sheet, and liquidity statement. C) Expense statement, liability sheet, and investment statement. D) Revenue statement, asset sheet, and budget statement. Show Answer Correct Answer: A) Income statement, balance sheet, and cash flow statement. 16. Which of the following actions is LEAST likely to increase shareholder wealth? A) The weighted average cost of capital is decreased by a recent financing decision. B) The board of directors decides to invest in a project with a positive NPV. C) The financial rewards of directors are linked to increasing earnings per share. D) The annual report declares full compliance with the corporate governance code. Show Answer Correct Answer: C) The financial rewards of directors are linked to increasing earnings per share. 17. What is a key responsibility of a financial manager? A) Overseeing daily operational tasks. B) Ensuring adequate capital and managing funds wisely. C) Developing new product lines. D) Managing human resources and employee relations. Show Answer Correct Answer: B) Ensuring adequate capital and managing funds wisely. 18. Decrease in accounts receivable A) Operating Activities. B) Investing Activities. C) Financing Activities. D) None of the above. Show Answer Correct Answer: A) Operating Activities. 19. You buy 6 pairs of socks for $ 10.98, what is the unit price? A) $ 1.83. B) $ 1.85. C) $ 1.90. D) $ 1.38. Show Answer Correct Answer: A) $ 1.83. 20. What is mobile banking? A) An electronic way to view account activity and pay bills via the internet and an institution's website. B) A written order for a bank to pay money out of the account holders account. C) A record of income and spending and a plan for managing money. D) A wireless service that allows financial transactions by using an app or web browser from a mobile device. Show Answer Correct Answer: D) A wireless service that allows financial transactions by using an app or web browser from a mobile device. 21. These are activities related in the generation of the principal revenue of the firm A) Investing Activities. B) Financing Activities. C) Operating Activities. D) All of the above. Show Answer Correct Answer: C) Operating Activities. 22. The dividend decision in financial management refers to: A) How much capital to borrow. B) How to minimize taxes. C) How to manage inventory. D) How much profits to reinvest or distribute to shareholders. Show Answer Correct Answer: D) How much profits to reinvest or distribute to shareholders. 23. The amount money a person expects to have in the future is called A) Principal. B) Simple Interest. C) Future Value. D) Present Value. Show Answer Correct Answer: C) Future Value. 24. Flotation cost includes the cost of discount of issue of shares. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 25. Which principle underlies double entry accounting? A) Historical cost principle. B) Matching principle. C) Duality principle. D) Prudence principle. Show Answer Correct Answer: C) Duality principle. 26. Business process of creating relationship with and satisfying customers. A) Market Research. B) Market Study. C) Advertisement. D) Marketing. Show Answer Correct Answer: D) Marketing. 27. Out of which affects Financial management: A) The quantum of current assets and its break-up into cash, inventory and receivables. B) The amount of long-term and short-term funds to be used. C) All Incomes in the Profit and Loss Account. D) A and B. Show Answer Correct Answer: D) A and B. 28. In what area of a typical family budget do people spend most of their money? A) Utilities. B) Housing. C) Transportation. D) Food. Show Answer Correct Answer: B) Housing. 29. Which one of the following is a capital budgeting decision? A) Determining how many shares of stock to issue. B) Deciding whether or not to purchase a new machine for the production line. C) Deciding how to refinance a debt issue that is maturing. D) Determining how much inventory to keep on hand. E) Determining how much money should be kept in the checking account. Show Answer Correct Answer: B) Deciding whether or not to purchase a new machine for the production line. 30. What journal entry will be passed for making payment of reconstruction expenses? A) Debit Bank A/c and Credit Expenses A/c. B) Debit Capital reduction A/c and Credit Bank A/c. C) Debit Profit&loss A/c and Credit Bank A/c. D) Debit Expenses A/c and Credit Equity shareholders A/c. Show Answer Correct Answer: B) Debit Capital reduction A/c and Credit Bank A/c. 31. This ratio shows how quickly the firm can pay off its liabilities relative to cash, bank balances and marketable securities since these are considered as the most liquid component of the current assets. A) Cash Ratio. B) Acid-test Ratio. C) Current Ratio. D) Debt Ratio. Show Answer Correct Answer: A) Cash Ratio. 32. The following are among the responsibilities of VP for Administration, EXCEPT: A) Coordinating functions of finance and marketing departments. B) Providing assistance in payroll preparation, payment of vendors, and collection of receivables. C) Identifying adequate and cheap raw material suppliers. D) Assisting other departments in hiring employees. Show Answer Correct Answer: C) Identifying adequate and cheap raw material suppliers. 33. Fixed assets investment decision is called ..... A) Management of working capital. B) Capital budgeting. C) Financing decision. D) None of these. Show Answer Correct Answer: B) Capital budgeting. 34. The goal of managing working capital management, such an inventory, should minimize the opportunity cost of capital. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 35. The Capital Asset Pricing Model (CAPM) is used to determine the theoretically appropriate required rate of return for an asset based on its: A) Systematic (non-diversifiable) risk. B) Cash flow volatility. C) Unsystematic (diversifiable) risk. D) Total risk (variance). Show Answer Correct Answer: A) Systematic (non-diversifiable) risk. 36. What does the term 'liquidity' refer to? A) The ability to borrow money in the future. B) The amount of debt owed. C) The ability to access funds quickly. D) The ability to pay off debt. Show Answer Correct Answer: C) The ability to access funds quickly. 37. I am going to buy a new bike. A) Investing. B) Saving. C) Spending. D) Donating. Show Answer Correct Answer: C) Spending. 38. Financial institution that gathers savings, paying interest or dividends to savers. A) Thrift Banks. B) Savings Banks. C) Rural Banks. D) Commercial Banks. Show Answer Correct Answer: B) Savings Banks. 39. 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 current ratio? A) 3.00. B) 3.01. C) 2.55. D) 2.56. Show Answer Correct Answer: B) 3.01. 40. Spontaneous financing includes A) Accounts payable. B) Short-term loans. C) Accounts receivable. D) A line of credit. Show Answer Correct Answer: A) Accounts payable. 41. The cheapest source of finance is: A) Preference share. B) Equity share capital. C) Retained earnings. D) Debenture. Show Answer Correct Answer: C) Retained earnings. 42. Which of the following is not a discounting technique of capital budgeting A) Internal rate of return. B) Profitability index. C) Accounting rate of return. D) Net present value. Show Answer Correct Answer: C) Accounting rate of return. 43. Cash flow statement is important A) To analyze the profit changes. B) To analyze the changes in cash and chash equivalents. C) To analyze the changes in asset. D) To analyze the changes in share capital. Show Answer Correct Answer: B) To analyze the changes in cash and chash equivalents. 44. Which of the following is true for net income approach A) Hi adept increase value of the firm. B) Higher Dept is better. C) Low adept increases weighted average cost of capital. D) All of the above. Show Answer Correct Answer: B) Higher Dept is better. 45. NI and NOI approach of capital structure is suggested by A) F. W. Taylor. B) Marshall Edgeworth. C) David Durand. D) Fisher. Show Answer Correct Answer: C) David Durand. 46. In the real world, corporate finance managers have the following goals in mind while declaring dividends: A) Projects with positive NPV are not to be cut to pay dividends. B) Maintain a long-term target debt equity ratio. C) Resort to dividend cuts as and when needed. D) Avoid the need to raise fresh equity. Show Answer Correct Answer: C) Resort to dividend cuts as and when needed. 47. Which of the following is not a current asset? A) Debtors. B) Cash and bank balance. C) Creditors. D) Inventories. Show Answer Correct Answer: C) Creditors. 48. Which one is not an element of Public Financial Management Cycle? A) Budgeting. B) Execution of Budgeting. C) Audit and Evaluation. D) Procurement. Show Answer Correct Answer: D) Procurement. 49. Securities whose values are determined by the market price or interest rate of some other asset is called ..... ? A) Hedging. B) Equities. C) Liabilities. D) Derivatives. Show Answer Correct Answer: D) Derivatives. 50. Which of the following is an example of short-term finance source? A) Debenture. B) Fixed deposit. C) Trade credit. D) Preference share. Show Answer Correct Answer: C) Trade credit. 51. A "deduction" is A) Net pay. B) Money added. C) Money taken out of a paycheck. D) Gross pay. Show Answer Correct Answer: C) Money taken out of a paycheck. 52. A budget is a plan for how you will spend your money A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 53. ) "Living within your means" is a principle that promotes ..... and avoiding excessive debt. A) Overspending. B) Financial stability. C) Ignoring budgeting. D) Impulsive spending. Show Answer Correct Answer: B) Financial stability. 54. Firm with high cash flow volatility should have less debt. A) Yes. B) No. C) All the above. D) None of the above. Show Answer Correct Answer: A) Yes. 55. Through investment the business will earn interest. A) Cash Flows Are Source of Values. B) Individuals Respond to Incentives. C) Risk Return Trade Off. D) Money Has Time Value. Show Answer Correct Answer: C) Risk Return Trade Off. 56. The 40-30-20-10 rule allocates 30% of income to wants A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 57. What is Disposable Income? A) The total savings. B) The total expenses. C) The total income before taxes. D) The amount of money left after taxes, available for spending or saving. Show Answer Correct Answer: D) The amount of money left after taxes, available for spending or saving. 58. Blue print of Financial management is drawn by A) Accountant. B) Treasurer. C) Finance manager. D) Auditor. Show Answer Correct Answer: C) Finance manager. 59. What is the meaning of wants? A) Something that you do not necessarily need it, but you still want it for luxurious lifestyle. B) Something that is needed to live. C) Something that you like. D) Something that you cannot live without it. Show Answer Correct Answer: A) Something that you do not necessarily need it, but you still want it for luxurious lifestyle. 60. What is the number between 300-850 that judges your financial trustworthiness? A) Credit score. B) Taxes. C) Loan. D) Credit report. Show Answer Correct Answer: A) Credit score. ← 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