This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 35 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 35 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What do you mean by Financial Management? A) Arrangement of funds. B) Disbursement/uses of funds. C) Both of the above. D) None of these. Show Answer Correct Answer: C) Both of the above. 2. Evaluating the company's financial performance is the role of A) Production manager. B) Auditor. C) Finance clerk. D) CFO. Show Answer Correct Answer: D) CFO. 3. Income from investment A) Risk. B) Investment. C) Return. D) Property. Show Answer Correct Answer: C) Return. 4. Installment is equal to ..... A) Cash price-down payment. B) Principle-interest. C) Cash price + interest. D) Principle + interest. Show Answer Correct Answer: D) Principle + interest. 5. Why is income important in personal financial management? A) It is the ending point and determines expenses a person must pay. B) It is the starting point and determines what is left over after savings. C) It is the ending point and determines how much earning potential a person has. D) It is the starting point and determines how much a person has available to spend. Show Answer Correct Answer: D) It is the starting point and determines how much a person has available to spend. 6. In relation to the financial management of a company, which of the following provides the best definition of a firm's primary financial objective? A) To achieve long-term growth in earnings. B) To maximise the level of annual profit. C) To maximise the wealth of its ordinary shareholder. D) To maximise the level of annual dividends. Show Answer Correct Answer: C) To maximise the wealth of its ordinary shareholder. 7. Which of the following are all WANTS A) Food, Clothing, Housing. B) Food, Video Games, Housing. C) Iphone 11, Video Games, Concert tickets. D) None of the above. Show Answer Correct Answer: C) Iphone 11, Video Games, Concert tickets. 8. Which of the following is a source of finance? A) Government grants. B) Loans. C) Savings accounts. D) Equity investments. Show Answer Correct Answer: B) Loans. 9. You invest Rs 800 in an account that pays 6% interest, compounded annually. How much money do you have after five years? A) 1710.58. B) 975.68. C) 898.09. D) 1070.58. Show Answer Correct Answer: D) 1070.58. 10. The purpose of depreciation is to: A) Increase equity. B) Reduce liabilities. C) Save cash for asset replacement. D) Match asset cost to the periods benefiting from its use. Show Answer Correct Answer: D) Match asset cost to the periods benefiting from its use. 11. Name one popular budgeting technique. A) 50/30/20 rule. B) Envelope budgeting. C) Zero-based budgeting. D) Cash flow forecasting. Show Answer Correct Answer: A) 50/30/20 rule. 12. This refers to the relationship between equity capital, preference share capital and debt capital. A) Capital structure. B) Capital. C) Sources of financing. D) None of the above. Show Answer Correct Answer: A) Capital structure. 13. What is the amount paid to worker after deductions have been taken out? A) Net Pay. B) Premium. C) Gross Pay. D) Interest. Show Answer Correct Answer: A) Net Pay. 14. Which of the following is true for NI approach of capital structure A) Higher debts increases value of the firm. B) Lower debt increases WACC. C) Higher equity increases value of the firm. D) All of the above. Show Answer Correct Answer: A) Higher debts increases value of the firm. 15. The key objective of financial management is ..... A) Asset Maximization. B) Sales Maxmization. C) Wealth Management. D) Profit Maximization. Show Answer Correct Answer: C) Wealth Management. 16. Internal reconstruction is done with a view to ..... A) Show true and fair view of financials. B) Sale the company. C) Purchase new company. D) Declare dividend to shareholders. Show Answer Correct Answer: A) Show true and fair view of financials. 17. Which factor is NOT typically considered in setting dividend policy? A) Legal restrictions. B) Competitors' stock prices. C) Company's growth opportunities. D) Available cash flow. Show Answer Correct Answer: B) Competitors' stock prices. 18. What is the main purpose of having an emergency fund? A) To pay off all existing debts without saving. B) The main purpose of having an emergency fund is to provide financial security during unexpected situations. C) To invest in high-risk stocks immediately. D) To save for a vacation or luxury items. Show Answer Correct Answer: B) The main purpose of having an emergency fund is to provide financial security during unexpected situations. 19. How does inflation impact investment analysis? A) Inflation impacts investment analysis by affecting real returns, interest rates, and sector performance. B) Inflation improves the accuracy of investment forecasts. C) Inflation only affects stock prices, not bonds. D) Inflation has no effect on investment analysis. Show Answer Correct Answer: A) Inflation impacts investment analysis by affecting real returns, interest rates, and sector performance. 20. If balance of an asset increases, cash flow operations will decrease. The statement is? A) Neither TRUE nor FALSE. B) I don't know. C) TRUE. D) FALSE. Show Answer Correct Answer: C) TRUE. 21. Which type of bank is NON PROFIT and run by its members? A) Commercial banks. B) Credit Unions. C) All the above. D) None of the above. Show Answer Correct Answer: B) Credit Unions. 22. On a INCOME STATEMENT, if the "Gross Profit for the year is $ 58, 200; and the "Total Operating Expenses is $ 13, 780, and taxes is "$ 3, 356.25" what is the "NET INCOME after taxes" amount: A) $ 4, 106.375. B) $ 68, 623.75. C) $ 47, 776.25. D) $ 41, 063.75. Show Answer Correct Answer: D) $ 41, 063.75. 23. The stocks that are owned by investors who are not active in management are called ..... ? A) Classified stock. B) Closely held stock. C) Publicly held stock. D) Common stock. Show Answer Correct Answer: C) Publicly held stock. 24. Reconciles the net income earned during a given year and any cash dividends paid A) Statement of Cash Flows-. B) Statement of Retained Earnings. C) Notes to Financial Statements. D) Cash Flow Analysis. Show Answer Correct Answer: B) Statement of Retained Earnings. 25. What field of study is financial management associated with? A) Mathematics. B) Economics. C) Accounting. D) Engineering. Show Answer Correct Answer: C) Accounting. 26. Mongolia was second country to begin using paper money A) 11th Century. B) 17th Century. C) 1983. D) 12th Century. Show Answer Correct Answer: A) 11th Century. 27. 15-Calculate the payback period with the cash flow of the project as following:Year 0 = Cash outflow = $ 15, 000 Year 1 = Cash Inflow = $ 5, 000, Year 2 = $ 7, 000, Year 3 = $ 10, 000, Year 4 = $ 13, 00 A) C-2.2Ys. B) A-2.4Ys. C) B-2.3Ys. D) D-2.6Ys. Show Answer Correct Answer: C) B-2.3Ys. 28. ..... is the area of finance concerned with activities such as borrowing funds to finance projects such as plant expansions or new product launches. A) Investments. B) Corporate finance. C) International finance. D) Working capital management. Show Answer Correct Answer: B) Corporate finance. 29. When you plan how to spend your monthly pocket money, you are doing: A) Accounting. B) Auditing. C) Financial Planning. D) Marketing. Show Answer Correct Answer: C) Financial Planning. 30. Financial statement fraud is the manipulation of the information used to prepare the financial statements released to the public and financial institutions. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 31. Which of the following tasks would typically be carried out by a member of the financial management team? A) Review of overtime spending. B) Depreciation of non-current assets. C) Apportioning overheads to cost units. D) Evaluating proposed expansion plans. Show Answer Correct Answer: D) Evaluating proposed expansion plans. 32. Financial and management accounting are identical in purpose and audience A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 33. ..... is the process of setting financial goals and developing plans to reach them. A) Budgeting. B) Creating an income statement. C) Financial planning. D) Financial forecasting. Show Answer Correct Answer: C) Financial planning. 34. These are the factors that influence market price of the corporation's stocks which are controllable by management, EXCEPT: A) Profitability. B) Competent management. C) Macroeconomic conditions. D) Dividends. Show Answer Correct Answer: C) Macroeconomic conditions. 35. Nature of business is an important factor to decide requirement of fixed capital. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 36. What qualifications are necessary for financial management training? A) A degree in accounting. B) At least 3 years of accounting experience. C) A finance degree. D) At least 5 years of finance experience. Show Answer Correct Answer: B) At least 3 years of accounting experience. 37. Which of the following organisations is most likely to benefit from a period of high price inflation? A) An organisation which has a large number of long term payables. B) An exporter of goods to a country with relatively low inflation. C) A supplier of goods in a market where consumers are highly price sensitive and substitute imported goods are available. D) A large retailer with a high level of inventory on display and low rate of inventory turnover. Show Answer Correct Answer: A) An organisation which has a large number of long term payables. 38. If the discounting factor of year 5 and assuming cost of capital of 5% is $ 0.8, it means that: A) $ 0.8 is the present value of $ 1 in 5 years with annual compounding of 5%. B) $ 0.8 is the present value of $ 1 in 3 years with annual compounding of 5%. C) $ 0.8 is the present value of $ 1 in 3 years with annual compounding of 3%. D) $ 0.8 is the present value of $ 1 in 5 years with annual compounding of 3%. Show Answer Correct Answer: A) $ 0.8 is the present value of $ 1 in 5 years with annual compounding of 5%. 39. From the following particulars, find out combined leverage. Sales Rs.1, 20, 000; Varaible cost Rs.72, 000; Interest Rs.12, 000; Fixed Cost Rs.18, 000. A) 2.67. B) 1.60. C) 1.67. D) 6.27. Show Answer Correct Answer: A) 2.67. 40. The principle of risk-return trade-off means that A) Higher risk investments must earn higher returns. B) An investor who takes more risk will earn a higher return. C) A rational investor will only take on higher risk if he expects a higher return. D) An investor who bought stock in a small corporation five years ago has more money than an investor who bought U.S. Treasury bonds five years ago. Show Answer Correct Answer: C) A rational investor will only take on higher risk if he expects a higher return. 41. The insurance premium against fire and theft of inventories is regarded of following cost? A) Carrying cost. B) Ordering cost. C) Storage cost. D) All the above. Show Answer Correct Answer: C) Storage cost. 42. To meet the objective of providing information about financial position, financial performance and cash flows of an entity, financial statements should provide information about all of the following, except A) Assets, liabilities and equity. B) Income and expenses, including gains and losses. C) Contributions by and distribution to owners in their capacity as owners. D) Nature of the entity's business activities. Show Answer Correct Answer: D) Nature of the entity's business activities. 43. Under conventional method ..... enters into a calculation of working capital?. A) Current liabilities. B) Inventories. C) Current assets. D) Cash. Show Answer Correct Answer: D) Cash. 44. What is the purpose of a contingency plan? A) To manage daily operations. B) To increase market share. C) To ensure business growth. D) To address potential crises or unexpected events. Show Answer Correct Answer: D) To address potential crises or unexpected events. 45. What are the key factors to consider in investment analysis? A) Historical events unrelated to finance. B) Personal preferences in lifestyle choices. C) Social media trends affecting youth. D) Market conditions, financial performance, economic indicators, industry trends, and risk assessment. Show Answer Correct Answer: D) Market conditions, financial performance, economic indicators, industry trends, and risk assessment. 46. Which agency regulate the money supply in india A) A. The government of india. B) B. Commercial bank. C) C. Reserve bank of india. D) D none of the above. Show Answer Correct Answer: C) C. Reserve bank of india. 47. Which of the following is NOT the characteristics of agricultural finance? A) Valuation of the firm. B) A sub-system of the business system which has other subsystems. C) Involves risk-return trade-off decisions on investment. D) Financial affects the survival, growth and suitality of the firm. Show Answer Correct Answer: D) Financial affects the survival, growth and suitality of the firm. 48. Apakah jenis matlamat kewangan yang dijangka dicapai dalam masa kurang dari setahun? A) Simpanan persaraan. B) Tabung kecemasan. C) Matlamat kewangan jangka panjang. D) Matlamat kewangan jangka pendek. Show Answer Correct Answer: D) Matlamat kewangan jangka pendek. 49. Which of the following actions will DECREASE the present value of an investment? A) Decrease the interest rate. B) Decrease the future value. C) Decrease the amount of time. D) All of the above will decrease the present value. Show Answer Correct Answer: B) Decrease the future value. 50. Which of the following is the duration of a short term financial goal? A) Less than 2 years. B) Less than 1 year. C) Less than 5 years. D) Less than 3 years. Show Answer Correct Answer: B) Less than 1 year. 51. A ..... reports the assets, liability, and owner's equity at the end of an accounting period. A) Balance sheet. B) Statement of cash flows. C) Financial statement. D) Income statement. Show Answer Correct Answer: A) Balance sheet. 52. What is the difference between capital and revenue? A) Capital is money spent, revenue is money earned. B) Capital is money earned, revenue is money spent. C) Capital is money used for expenses, revenue is used for investments. D) Capital is money used for investments, revenue is used for expenses. Show Answer Correct Answer: A) Capital is money spent, revenue is money earned. 53. A financial institution is: A) Supermarket. B) Bank. C) Hospital. D) Restaurant. Show Answer Correct Answer: B) Bank. 54. Investing in a new company's stock is generally considered a lower risk than putting your money in a savings account A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 55. A CFO is responsible for all financial activities of the company A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 56. Which one of the following is an example of current assets? A) Cash. B) Overdraft. C) All the above. D) None of the above. Show Answer Correct Answer: A) Cash. 57. Under financial management a forecast of receipts and payments is made andthe shortage or sufficiency of ..... is ensured. A) Capital. B) Human resource. C) Material. D) All the above. Show Answer Correct Answer: A) Capital. 58. Original and additional investments of the owner. A) Drawings. B) Capital. C) Expenses. D) Revenues. Show Answer Correct Answer: B) Capital. 59. Payments are immediately charged to the cardholder's bank account A) Cash Card. B) Credit Card. C) Debit Card. D) Prepaid Cash Card. Show Answer Correct Answer: C) Debit Card. 60. What are Wages/Salary? A) A form of debt. B) A type of investment. C) A financial plan. D) Compensation received for work performed, typically hourly (wages) or annually (salary). Show Answer Correct Answer: D) Compensation received for work performed, typically hourly (wages) or annually (salary). ← 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