This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 37 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 37 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Dividend is that part of profit after tax which is ..... to the ..... of the company A) Retained, shareholders. B) Distributed, company. C) Distributed, Shareholders. D) None of these. Show Answer Correct Answer: C) Distributed, Shareholders. 2. Financing Decisions are known as A) Dividend Decisions. B) Capital Structure Decisions. C) Working Capital Management Decisions. D) Capital Budgeting Decisions. Show Answer Correct Answer: B) Capital Structure Decisions. 3. Which of the following identities is FALSE? A) Cash Flow to Owners = Dividends-Net New Borrowing from Owners. B) Change in Equity = Paid-in-Surplus-Net New Borrowing from Creditors. C) Net New Borrowing from Owners = Change in Equity. D) Net New Borrowing = Ending Long-term Liabilities-Beginning Long-Term Liabilities. Show Answer Correct Answer: B) Change in Equity = Paid-in-Surplus-Net New Borrowing from Creditors. 4. Identification of investment proposals is the first step in capital budgeting process A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 5. Which financial decision help a businessman in opening a new branch of its business. A) Financing decision. B) Dividend decision. C) Investment decision. D) None of the above. Show Answer Correct Answer: C) Investment decision. 6. In case of increasing price, stock is valued at higher value in which of the following methods A) LIFO. B) FIFO. C) All the above. D) None of the above. Show Answer Correct Answer: B) FIFO. 7. If the degree of operating leverage is 1.5 and the degree of combined leverage is 3.5 then whats is the degree of financial leverage? A) 2.33. B) 2.00. C) 5.00. D) 1.75. Show Answer Correct Answer: A) 2.33. 8. Equity financing designed specially for funding start ups and high technology projects A) Venture capital. B) Forfaiting. C) Seed capital. D) Bridge finance. Show Answer Correct Answer: A) Venture capital. 9. Decision criterion with respect to profitability index to accept project is? A) Profitability index is greater than or equal to 1. B) Profitability index is greater than 1. C) Profitability index is equal to or less than 1. D) Profitability index is less than 1. Show Answer Correct Answer: A) Profitability index is greater than or equal to 1. 10. The meaning of capital structure relates to the percentage of ..... sources. A) Short-term. B) Long-term. C) Medium term. D) Current. Show Answer Correct Answer: B) Long-term. 11. Financial risk is analysed with the help of A) Operating leverage. B) Financial leverage. C) Combined leverage. D) All of above. Show Answer Correct Answer: B) Financial leverage. 12. Non-spontaneous financing can be divided into: A) Security loan and permanent loan. B) Temporary loan and permanent loan. C) Secured loan and unsecured loan. D) Long-term loan and immediate loan. Show Answer Correct Answer: C) Secured loan and unsecured loan. 13. Finance is only concerned with accounting records A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 14. Why is cash flow management critical for a business? A) It helps the business reduce its product prices. B) It ensures the business can meet its short-term obligations and avoid insolvency. C) It helps with advertising. D) It ensures employee satisfaction. Show Answer Correct Answer: B) It ensures the business can meet its short-term obligations and avoid insolvency. 15. Which of the following is not a factor affecting financing decision? A) Rate of return. B) Risk. C) Cash flow position. D) Floatation Cost. Show Answer Correct Answer: A) Rate of return. 16. Which of the following is NOT a major area of finance? A) Corporate finance. B) Personal finance. C) Human resource finance. D) Public finance. Show Answer Correct Answer: C) Human resource finance. 17. It is a kind of security issued by a company to raise funds with the expectation of receiving dividends in the future A) Stock dividends. B) Answer not given. C) Capital stock. D) Bonds. Show Answer Correct Answer: C) Capital stock. 18. If return on investment is less than the rate of interest, then company must prefer A) (a) Equity. B) (b) Debt. C) C) Both (a) and (b). D) (d) None of the above. Show Answer Correct Answer: A) (a) Equity. 19. The financial management is generally concerned with procurement, allocation and control of financial resources of a concern. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 20. Due to globalization, the financial management function has become ..... A) Less demanding and complex. B) More demanding and complex. C) Less important and complex. D) Outdated and complex. Show Answer Correct Answer: B) More demanding and complex. 21. A budget helps prioritize needs over wants A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 22. The nature of financial management is BEST described as: A) A long-term strategic decision-making process. B) A short-term operational activity. C) A legal compliance procedure. D) A routine administrative task. Show Answer Correct Answer: A) A long-term strategic decision-making process. 23. Jackson spends in gas changes every month, based upon the price of gas, this is an example of which of the following: A) Fixed Expense. B) Variable Expense. C) Periodic Expense. D) None of the above. Show Answer Correct Answer: B) Variable Expense. 24. Because of globalization in the world's markets, a multinational financial manager is more likely than a domestic financial manager to specialize in finance to the exclusion of other fields of business. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 25. Which of the following is an implication of Corporate Restructuring? A) Increase in competition. B) Reduction in Number of players. C) Creates social content. D) Economic health of Nation degrades. Show Answer Correct Answer: B) Reduction in Number of players. 26. Gordon's model of dividend relevance is same as A) Price earning ratio. B) Constant growth model of equity valuation. C) No growth model of equity valuation. D) Inverse of price earning ratio. Show Answer Correct Answer: B) Constant growth model of equity valuation. 27. Difference in what is owned, called assets, and what is owed, called liabilities is considered: A) Balance. B) Net Income. C) Net Worth. D) Interest. Show Answer Correct Answer: C) Net Worth. 28. With an increase in the investment in fixed assets, there is a commensurate ..... in the working capital requirement. A) Increase. B) May increase or decrease. C) Decrease. D) No change. Show Answer Correct Answer: A) Increase. 29. Higher dividend per share is associated with A) High earnings, high cash flows, unusable earnings and higher growth opportunities. B) High earnings, high cash flows, stable earnings and high growth opportunities. C) High earnings, high cash flows, stable earnings and lower growth opportunities. D) High earnings, low cash flows, stable earnings and lower growth opportunities. Show Answer Correct Answer: C) High earnings, high cash flows, stable earnings and lower growth opportunities. 30. Perusahaan akan memiliki cash pada saat ..... A) Profit meningkat. B) Customers membayar lebih cepat. C) Account Receivable meningkat. D) Inventory menurun. Show Answer Correct Answer: B) Customers membayar lebih cepat. 31. In order to find out cost of equity capital under CAPM, which of the following is not required: A) Risk-free Rate of Interest. B) Market Price of Equity Share. C) Beta Factor. D) Market Rate of Return. Show Answer Correct Answer: B) Market Price of Equity Share. 32. Having diverse loan/credit types will A) Improve your credit score. B) Hurt your credit score. C) All the above. D) None of the above. Show Answer Correct Answer: A) Improve your credit score. 33. Saving money in a bank account is a high-risk, high-return investment A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 34. Buy stocks issued by a firm that represents certain degree of power to make decisions for the firm A) Directors. B) Corporation. C) Owner. D) Shareholders. Show Answer Correct Answer: D) Shareholders. 35. Which is a source of earned income? A) Interest on your money market account. B) Volunteering at your school. C) Money earned while working at the mall. D) Collecting gift cards from birthdays. Show Answer Correct Answer: C) Money earned while working at the mall. 36. Companies (A) and (B) have the same tax rate, sales, total assets, and basic earning power. Both companies have positive net incomes. Company (A) has a higher debt ratio and, therefore, a higher interest expense. Which of the following statements is CORRECT? A) Company (A) pays more in taxes. B) Company (A) has a lower equity multiplier. C) Company (A) has a lower times interest earned (TIE) ratio. D) Company (A) has more net income. Show Answer Correct Answer: C) Company (A) has a lower times interest earned (TIE) ratio. 37. How would you classify financial market based on 'Nature of claim'? A) Debt market and Equity market. B) Primary market and Secondary market. C) Cash market and Future market. D) Money market and Capital market. Show Answer Correct Answer: A) Debt market and Equity market. 38. What measures a firm's ability to meet short-term obligations? A) Capital structure. B) Retained earnings. C) Liquidity ratios. D) Financial capital. Show Answer Correct Answer: C) Liquidity ratios. 39. Budget Classification Code Has- A) 3 Levels. B) 4 Levels. C) 5 Levels. D) 2 Levels. Show Answer Correct Answer: B) 4 Levels. 40. Which of the following is a hybrid form of security? A) Equity shares. B) Preference shares. C) Debentures. D) None of these. Show Answer Correct Answer: B) Preference shares. 41. The impact of Foreign exchange rate on a firm is called as A) Operating Exposure. B) Business risk. C) Translation exposure. D) Transaction exposure. Show Answer Correct Answer: A) Operating Exposure. 42. Ratios used in measuring the ability of the firm to meet its currently maturing obligations. A) Solvency Ratio. B) Profitability Ratio. C) Liquidity Ratio. D) Activity Ratio. Show Answer Correct Answer: C) Liquidity Ratio. 43. What are the five C's of credit? A) Capacity, Collection, Collateral, Common Sense, Capital. B) Capacity, Conditions, Collateral, Character, Capital. C) Capacity, Clearance, Collateral, Character, Capital. D) Capacity, Coloring, Clearing, Creativeness, Coneheads. Show Answer Correct Answer: B) Capacity, Conditions, Collateral, Character, Capital. 44. Online Banking can NOT be used to: A) Order Bank statements. B) Set up direct bill payments or debits. C) Withdraw Cash. D) Transfer money between accounts. Show Answer Correct Answer: C) Withdraw Cash. 45. You should log off when you're finished accessing your bank online. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 46. Working capital may be- A) Negative. B) Zero. C) Positive. D) Any one of them. Show Answer Correct Answer: D) Any one of them. 47. What is the life blood of a business? A) Decisions. B) Accounts. C) Reports. D) Finance. Show Answer Correct Answer: D) Finance. 48. When interest rates are stated or given for loan repayments, it is assumed that they are ..... unless specifically stated otherwise. A) Compound percentage rates. B) Annual percentage rates. C) Effective annual rates. D) APYs. Show Answer Correct Answer: B) Annual percentage rates. 49. My mom makes me cut the grass but she pays me when I do. A) Earning. B) Investing. C) Spending. D) Saving. Show Answer Correct Answer: A) Earning. 50. 16-The following cash flow are providedYear 0 = Cash outflow = $ 170, 000Year 1 = Cash Inflow = $ 30, 000, Year 2 = $ 45, 000, Year 3 = $ 55, 000, Year 4 = $ 130, 000 Calculate payback period? A) B = 3.31 Ys. B) D = 3.5Ys. C) A = 3 Ys. D) C = 3.5Ys. Show Answer Correct Answer: A) B = 3.31 Ys. 51. The following are the process of financial management except? A) Determine the financial goal. B) Evaluate the financial position. C) Create a questionnaire about financial policy. D) Review and check progress. Show Answer Correct Answer: C) Create a questionnaire about financial policy. 52. It consists of recognized gains and losses that are not included in the income statement but are found in the equity section A) Income Statement. B) Statement of Changes in Equity. C) Comprehensive Income. D) Statement of Financial Position. Show Answer Correct Answer: C) Comprehensive Income. 53. Capital intensive business organisations require A) Huge working capital. B) Huge fixed capital. C) No fixed capitalno working capital. D) None of the above. Show Answer Correct Answer: B) Huge fixed capital. 54. Which of the following is not an example of short term finance? A) Cash credit. B) Debentures. C) Bills discounting. D) Bank overdraft. Show Answer Correct Answer: B) Debentures. 55. On the asset side, we have ..... as our current asset and ..... as the long-term asset. A) Equipment, investments. B) Equipment, inventory. C) Inventory, equipment. D) Inventory, investments. Show Answer Correct Answer: C) Inventory, equipment. 56. A tool that helps managersto determine thebest way of structuringoperating costs(fixed versus variable). A) Break Even Point. B) Breakeven wedge. C) Cash break even. D) None of the above. Show Answer Correct Answer: B) Breakeven wedge. 57. What is the purpose of financial management? A) To study the management of government revenue. B) To create and study money and investments. C) To maximize allocate assets. D) To manage an individual's finances. Show Answer Correct Answer: C) To maximize allocate assets. 58. The type of collateral (Security) used for short-term loan is ..... A) Real estate. B) Plant and Machinery. C) Stock of Good. D) Equity share Capital. Show Answer Correct Answer: C) Stock of Good. 59. A government body uses measures based upon the 'three Es' to measure value for money generated by a publicly funded hospital.Which of the following relates to efficiency? A) Proportion of patients readmitted after unsuccessful treatment. B) Cost per successfully treated patient. C) Percentage change in doctors' salaries compared with previous year. D) Cost per operation. Show Answer Correct Answer: B) Cost per successfully treated patient. 60. Refers to the fungible and tradable financial instrument used to raise capital in public and private markets. A) Security. B) Surplus. C) Stocks. D) Equity. Show Answer Correct Answer: A) Security. ← 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