This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 38 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 38 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is a financial asset? A) Gold. B) Share. C) Silver. D) Land. Show Answer Correct Answer: B) Share. 2. It sets the overall goals and strategies for the company. A) Minimizing revenue. B) Financial Planning. C) Ignoring market trends. D) Maximizing expenses. Show Answer Correct Answer: B) Financial Planning. 3. The dividend irrelevance theory to share valuation was propounded by A) James e Walter. B) Myron Gordon. C) Modi Gilani and Milar. D) None of the above. Show Answer Correct Answer: C) Modi Gilani and Milar. 4. The project with high pay back period will be A) Selected. B) Rejected. C) All the above. D) None of the above. Show Answer Correct Answer: B) Rejected. 5. What does "IRS" stand for? A) Increase Rent Status. B) Internal Revenue Service. C) Invoice Reciept Sale. D) Instant Regulation Service. Show Answer Correct Answer: B) Internal Revenue Service. 6. Setting goals is the first step in the financial management process. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 7. Sistem & kebijakan keuangan harus konsisten tetapi tidak bearti tidak boleh disesuaikan apabila ada perubahan dalam suatu organisasi. Hal ini merupakan salah 1 prinsip dari managemen keuangan, yaitu: A) Transparancy. B) Consistency. C) Accounting standards. D) Accountability. Show Answer Correct Answer: B) Consistency. 8. The following are all features of equity shares except one: A) Voting rights. B) Right to control. C) Leads to speculations. D) Residual claims on assets. Show Answer Correct Answer: C) Leads to speculations. 9. Payment of lease rentals reduces the ..... liability. A) Loan. B) Long term. C) Tax. D) Contingent. Show Answer Correct Answer: C) Tax. 10. The Fisher Effect tells us that the true nominal rate is actually made up of three components. These three components are ..... A) The nominal rate, the real rate, and the inflation rate. B) The real rate, the inflation rate, and the product of the real rate and the nominal rate. C) The real rate, the inflation rate, and the product of the real rate and inflation. D) The real rate and the product of the real rate and inflation. Show Answer Correct Answer: C) The real rate, the inflation rate, and the product of the real rate and inflation. 11. In case of net income approach the cost of equity is A) Fixed. B) Decreasing. C) Increasing. D) Constant. Show Answer Correct Answer: D) Constant. 12. Which financial statement provides a snapshot of a company's financial position at a specific point in time? A) Statement of Retained Earnings. B) Cash Flow Statement. C) Balance Sheet. D) Income Statement. Show Answer Correct Answer: C) Balance Sheet. 13. Limit of RFQ in a single procurement in operational budget is- A) 10 Lakh. B) 3 Lakh. C) 5 Lakh. D) 25 Lakh. Show Answer Correct Answer: C) 5 Lakh. 14. Drawings are deducted from:(Year 2015/16) A) Capital. B) Expenses. C) Sales. D) Income. Show Answer Correct Answer: A) Capital. 15. Revenue and expense accounts are extended to A) Accounts payable section. B) Balance sheet section. C) Retained earning statement. D) Income statement. Show Answer Correct Answer: D) Income statement. 16. ..... involves increasing the proportion of debt and preference shares in total capital. A) Financing decision. B) Capital Budgeting. C) Trading on equity. D) Financial Analysis. Show Answer Correct Answer: C) Trading on equity. 17. Financial management is ..... A) A process that involves evaluating financial status from sources of income into creating and carrying out financial plan. B) A process that involves managing money from sources of income into savings, expenses, protection and investment. C) A process that involves spending money wisely and planning short term and long term financial plan. D) None of the above. Show Answer Correct Answer: B) A process that involves managing money from sources of income into savings, expenses, protection and investment. 18. Which of the following is a want A) McDonald's food. B) Sheetz food. C) Dunkin' Donuts food. D) All of these. Show Answer Correct Answer: D) All of these. 19. Commercial Banks normally provide short-term finance which is payable within a week. A) False. B) True. C) All the above. D) None of the above. Show Answer Correct Answer: A) False. 20. Intermediaries that channel the savings of individuals, businesses, and government into loans of investment. A) Private Placements. B) Financial Institutions. C) Financial Market. D) Public Offering. Show Answer Correct Answer: B) Financial Institutions. 21. Purchase of land and building A) Investing Activities. B) Operating Activities. C) Financing Activities. D) None of the above. Show Answer Correct Answer: A) Investing Activities. 22. The main advantage of ARR A) Ignores timing of cash inflow. B) Money. C) Easy comparisons. D) Profit. Show Answer Correct Answer: C) Easy comparisons. 23. The purpose of studying financial statements is ..... A) To mechanically build portfolio analysis. B) To understand those portions of the statements that have relevance for financial decision making. C) To primarily investigate all portions of the statements that have relevance for dividend policy. D) To mechanically learn how to read and understand footnotes. Show Answer Correct Answer: B) To understand those portions of the statements that have relevance for financial decision making. 24. You dream of endowing a chair in finance at the local university that will provide a salary of $ 150, 000 per year forever, with the first cash flow to be one year from today. If the university promises to invest the money at a rate of 5% per year, how much money must you give the university today to make your dream a reality? A) This question cannot be answered. B) $ 2, 857, 143. C) $ 3, 000, 000. D) $ 15, 000, 000. Show Answer Correct Answer: C) $ 3, 000, 000. 25. How does inflation impact savings? A) It decreases the value of savings over time. B) It has no effect on savings. C) It only affects investments. D) It increases the value of savings over time. Show Answer Correct Answer: A) It decreases the value of savings over time. 26. Capital budgeting is related to ..... A) Short term assets. B) Long terms assets. C) Long terms and short terms assets. D) Fixed assets. Show Answer Correct Answer: B) Long terms assets. 27. Cryptocurrency is a low-risk investment with guaranteed returns A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 28. Yield in the airline industry is most accurately defined as: A) Average revenue earned per passenger-mile. B) Total revenue divided by total costs. C) The percentage of available seats that are filled. D) Revenue generated per flight. Show Answer Correct Answer: A) Average revenue earned per passenger-mile. 29. Financial management is concerned with managerial activities relating to A) Planning. B) Procurement and administration of funds. C) Optimum utilisation of funds. D) All of the above. Show Answer Correct Answer: D) All of the above. 30. The federal program that assists older Americans with insurance and income is called A) FICA (Federal Insurance Contribution Act). B) Physician's Mutual Insurance. C) State Income Tax. D) Federal Income Tax. Show Answer Correct Answer: A) FICA (Federal Insurance Contribution Act). 31. What is the main objective of shareholder wealth maximization? A) Increasing employee salaries. B) Maximizing market value of shares. C) Minimizing company expenses. D) Enhancing customer service. Show Answer Correct Answer: B) Maximizing market value of shares. 32. Which one of the following statements concerning a sole proprietorship is correct? A) A Sole proprietorship is designed to protect the personal assets of the owner. B) The owner of a sole proprietorship is personally responsible for all of the company's debts. C) The profits of a sole proprietorship are subject to double taxation. D) A sole proprietorship is structured the same as a limited liability company. Show Answer Correct Answer: B) The owner of a sole proprietorship is personally responsible for all of the company's debts. 33. To measures the value of one currency in units of another currency we can use A) Inflation rate. B) Exchange rate. C) Income level. D) Interest rate. E) Domestic demand. Show Answer Correct Answer: B) Exchange rate. 34. Which of the following considers both risk and time value of money? A) IRR. B) NPV. C) Both a & b. D) Payback. Show Answer Correct Answer: C) Both a & b. 35. Accumulated Depreciation A) Debit. B) Credit. C) All the above. D) None of the above. Show Answer Correct Answer: B) Credit. 36. I want to make my money grow so I can pay for university. A) Saving. B) Donating. C) Investing. D) Spending. Show Answer Correct Answer: C) Investing. 37. What do you call someone who lends money? A) Debenture. B) Creditor. C) Borrower. D) None of the above. Show Answer Correct Answer: B) Creditor. 38. Mother of all bank A) BPI. B) BDO. C) Banko Sentral (Manila). D) Central Bank. Show Answer Correct Answer: C) Banko Sentral (Manila). 39. ..... is the long term strategy for financing proposed capital expenditure A) Capital budgeting. B) Budget. C) Cash budget. D) None of the above. Show Answer Correct Answer: A) Capital budgeting. 40. Contribution/ EBIT is the formula of ..... A) Operating Leverage. B) Financial Leverage. C) Combined Leverage. D) None of the above. Show Answer Correct Answer: A) Operating Leverage. 41. Xin Yi earns RM2, 500 monthly. He plans to save 20% of his income. How much will she save in a year? A) RM3, 000. B) RM6, 000. C) RM4, 500. D) RM8, 000. Show Answer Correct Answer: B) RM6, 000. 42. The income statement is sometimes called a profit and loss (P & L) statement. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 43. A share that you cannot redeem during the lifetime of the business? A) Debenture Share. B) Preference Share. C) Equity Share. D) None of the above. Show Answer Correct Answer: C) Equity Share. 44. INVESTMENT DECISION RELATED TO INVESTING OF FUNDS ON A LONG TERM BASIS IS CALLED AS: A) DIVIDEND DECISION. B) CAPITAL BUDGETING DECISION. C) FINANCING DECISION. D) NONE OF THE ABOVE. Show Answer Correct Answer: B) CAPITAL BUDGETING DECISION. 45. ..... refers to management of flow of funds in a firm. A) Cash management. B) Financial management. C) Bank management. D) Money management. Show Answer Correct Answer: B) Financial management. 46. Which of the following is typically considered an agency cost? A) Taxes. B) Consultant fees. C) Cost of goods sold. D) Audit. Show Answer Correct Answer: D) Audit. 47. What is the importance of credit score in financial matters? A) It affects the stock market. B) It has no impact on financial decisions. C) It is used for tax calculations. D) It determines the interest rate on loans. Show Answer Correct Answer: D) It determines the interest rate on loans. 48. Financial ratios for the statement of financial position and the income statement are done. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 49. One benefit of using e-file to prepare and file federal and state income taxes is ..... A) Takes longer to complete. B) Increased accuracy in calculations. C) Increased math errors. D) None of the above. Show Answer Correct Answer: B) Increased accuracy in calculations. 50. Book Building is a process used for efficient price discovery in A) Right Issue. B) IPO (Initial Public Offer). C) Secondary market. D) Private placement. Show Answer Correct Answer: B) IPO (Initial Public Offer). 51. Which is not a qualitative factor affecting a firm's investment appraisal decisions? A) Aims and objectives. B) Risk. C) The selected discount factor. D) Impact on the environment. Show Answer Correct Answer: C) The selected discount factor. 52. Pay for working more than 40 hours in one week is called? A) Net pay. B) Pay period. C) Overtime pay. D) Gross Pay. Show Answer Correct Answer: C) Overtime pay. 53. The IRR is the discount rate that produces a zero NPV or the specific discount rate at which the present value of the cost equals ..... A) The present value of the cash outflow. B) The present value of the future benefits or cash inflows. C) The future value of the present cash outflows. D) The investment. Show Answer Correct Answer: B) The present value of the future benefits or cash inflows. 54. Which of the following does NOT form part of the objectives of a corporate governance best practice framework? A) Separation of chairperson and CEO roles. B) Establishment of audit, nomination and remuneration committees. C) Minimisation of risk. D) Employment of non-executive directors. Show Answer Correct Answer: C) Minimisation of risk. 55. An example of a financial institution is: A) A department store. B) A bank. C) A credit union. D) A bank and a credit union. Show Answer Correct Answer: D) A bank and a credit union. 56. Combined leverage can be used to measure the relationship between: A) EBIT and EPS. B) PAT and EPS. C) Sales and EPS. D) Sales and EBIT. Show Answer Correct Answer: C) Sales and EPS. 57. This measure the capacity to earn sufficient return on sales, total assets and owner's investment. A) Profitability. B) Liquidity. C) Asset Utilization. D) Debt Utilization. Show Answer Correct Answer: A) Profitability. 58. What does equity financing require the entrepreneur to give up? A) Cash. B) Control and ownership. C) Pro forma statements. D) Internal funds. Show Answer Correct Answer: B) Control and ownership. 59. Corporation finance is a part of public finance A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 60. Firm having higher degree of operating efficiency require higher amount of working capital A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. ← 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