This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 5 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Gross working capital refers to the investment in all the current liabilities. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 2. Sport is recession-proof A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 3. The matiurity period of ICDs range from A) One day to 6 months. B) Up to 1 year. C) 1 year to 2 year. D) 1 year to 5 year. Show Answer Correct Answer: A) One day to 6 months. 4. Ideal cash will not generate profit but cause loss of ..... ? A) A. Value of firm. B) B. Interest. C) C. None of these. D) None of the above. Show Answer Correct Answer: B) B. Interest. 5. Which of the following is not an advantage of issuing bonds? A) Management retains control. B) Interest paid is tax deductable. C) Bonds are only a temporay source of finance. D) None of the above. Show Answer Correct Answer: D) None of the above. 6. The capital redemption reserve is created for the following reasons A) To maintain the capital intact. B) To safeguard the interest company's creditors. C) Both of the above. D) None of the above. Show Answer Correct Answer: C) Both of the above. 7. It is the efficient allocation of funds to specific assets. A) Financing. B) Value. C) Investment. D) Dividend. Show Answer Correct Answer: C) Investment. 8. Describe the purpose of a cash flow statement. A) To provide a detailed analysis of the company's market share. B) To track the company's inventory levels over time. C) To summarize a company's revenue for the year. D) The purpose of a cash flow statement is to provide insight into a company's cash inflows and outflows over a specific period. Show Answer Correct Answer: D) The purpose of a cash flow statement is to provide insight into a company's cash inflows and outflows over a specific period. 9. A Business created as a distinct legal entity and treated as a legal 'person' is called a: A) Sole proprietorship. B) Unlimited liability company. C) Partnership. D) Corporation. Show Answer Correct Answer: D) Corporation. 10. Modi Gilani and Miller argue that when the form has no acceptable investment opportunities it should A) Distribute the needed funds to owners. B) Lowest cost of capital. C) Close its doors. D) Retain the funds until an acceptable project arises. Show Answer Correct Answer: A) Distribute the needed funds to owners. 11. It estimates the overall debt status of the firm in light of its asset base and earning power. A) Asset utilization. B) Debt-Utilization. C) Liquidity. D) Profitability. Show Answer Correct Answer: B) Debt-Utilization. 12. What is the main focus of financial policy? A) Maximizing employee productivity. B) Increasing market competition. C) Reducing operational costs. D) Managing financial resources to achieve objectives. Show Answer Correct Answer: D) Managing financial resources to achieve objectives. 13. Select the correct formula for Financial Leverage. A) EBT/EBIT. B) EBIT/EBT. C) EBT X EBIT. D) Contribution / EBIT. Show Answer Correct Answer: B) EBIT/EBT. 14. What is the primary function of financial modeling? A) To manage human resources. B) To analyze customer behavior. C) To create marketing strategies. D) To represent the performance of financial assets. Show Answer Correct Answer: D) To represent the performance of financial assets. 15. Sophie earns $ 500 per month. She spends 15% on food/snacks. How much is she spending? A) $ 75. B) $ 100. C) $ 15. D) None of the above. Show Answer Correct Answer: A) $ 75. 16. What is the term for a financial tool to evaluate long-term investment proposals? A) Line of credit. B) Financial capital. C) Net present value (NPV). D) Retained earnings. Show Answer Correct Answer: C) Net present value (NPV). 17. A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount) A) Loan. B) Interest. C) Credit. D) Debt. Show Answer Correct Answer: B) Interest. 18. In which of the following markets, are the outstanding (already issued) long-term financial instruments traded? A) Money market. B) Secondary capital market. C) Primary capital market. D) Forex market. Show Answer Correct Answer: B) Secondary capital market. 19. Which financial statement shows a company's financial position at a specific point in time? A) Statement of Retained Earnings. B) Income Statement. C) Balance Sheet. D) Cash Flow Statement. Show Answer Correct Answer: C) Balance Sheet. 20. The cost of debt capital is calculated on the basis of ..... A) Annual Depreciation. B) Net proceeds. C) Annual Interest. D) Capital. Show Answer Correct Answer: C) Annual Interest. 21. Merchandise Inventory A) Debit. B) Credit. C) All the above. D) None of the above. Show Answer Correct Answer: A) Debit. 22. SW Co has a barrel of chemicals in its warehouse that it purchased for a project a while ago at a cost of $ 1, 000. It would cost $ 400 for a professional disposal company to collect the barrel and dispose of it safely. However, the chemicals could be used in a potential project which is currently being assessed.What is the relevant cost of using the chemicals in a new project proposal? A) $ 1, 000 cost. B) $ Nil. C) $ 400 cost. D) $ 400 benefit. Show Answer Correct Answer: D) $ 400 benefit. 23. The formula of EBIT = ..... A) Sales-Variable cost. B) Contribution-Fixed cost. C) Sales-Fixed cost. D) All the above. Show Answer Correct Answer: B) Contribution-Fixed cost. 24. If Employee A, works 37 hours in one week and their hourly pay rate is:$ 10.25; what is their gross pay for the week? A) $ 37.95. B) $ 300.25. C) $ 379.25. D) $ 380.00. Show Answer Correct Answer: C) $ 379.25. 25. Ploughing back of profits is related to A) Dividend Decisions. B) Capital Budgeting Decisions. C) Working Capital Management Decisions. D) Capital Structure Decisions. Show Answer Correct Answer: A) Dividend Decisions. 26. What is the role of a CFO in financial management? A) The CFO oversees financial operations, including planning, budgeting, reporting, and risk management. B) The CFO focuses on product development. C) The CFO is responsible for marketing strategies. D) The CFO manages human resources. Show Answer Correct Answer: A) The CFO oversees financial operations, including planning, budgeting, reporting, and risk management. 27. What is an example of a FIXED expense? A) New shoes. B) Groceries. C) Rent. D) None of the above. Show Answer Correct Answer: C) Rent. 28. Which of the following statements concerning net income is MOST correct? A) Net income represents income that may be reinvested in the firm or distributed to its owners. B) Net income represents cash available to pay dividends. C) Net income represents sales minus operating expenses at a specific point in time. D) Negative net income reduces a company's cash balance. Show Answer Correct Answer: A) Net income represents income that may be reinvested in the firm or distributed to its owners. 29. Features of international business that a organization may be exposed to A) Exchange rates. B) Political risks. C) Foreign economic condition. D) All of the above. Show Answer Correct Answer: D) All of the above. 30. Costa Rica and Haiti issued the first Tywek, and the Isle of Man issued the first Bradvek polymer banknotes printed by American Banknote Co. A) 2005-. B) 1988. C) 1983. D) 1996. Show Answer Correct Answer: C) 1983. 31. Diketahui informasi dari PT Maju sebagai berikut:Beban Pokok Penjualan:$ 500Penjualan:$ 3.000Depreciation:$ 700Interest:$ 200Berapakah besar Earning Before Taxes PT Maju? A) $ 1.500. B) $ 1.600. C) $ 200. D) $ 3.000. Show Answer Correct Answer: B) $ 1.600. 32. Mm approach is known as theory of relevance when it is assumed that there is A) Absence of taxes. B) Presence of taxes. C) Investors act rationally. D) All of the above. Show Answer Correct Answer: B) Presence of taxes. 33. 'people act in their own financial interest' pernyataan tersebut merupakan prinsip keuangan self interest behavior. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 34. What is the compound value if you invest Rs. 1, 000 at 10% for 3 years? A) Rs. 13.31. B) Rs. 1, 331. C) Rs. 133.1. D) Rs. 1.331. Show Answer Correct Answer: B) Rs. 1, 331. 35. What does effective capital allocation in financial management primarily ensure? A) Directing funds to the most efficient operational areas. B) Minimizing employee turnover. C) Reducing the company's tax burden. D) Increasing customer satisfaction. Show Answer Correct Answer: A) Directing funds to the most efficient operational areas. 36. A diaper commercial for babies. They say that it will be best for babies. What tactic is this? A) Attention Getter. B) Glittering Generalities. C) Cutting Edge. D) Parental Instinct. Show Answer Correct Answer: D) Parental Instinct. 37. When a company uses debt fund in its financial structure, it will lead to a change in A) Operating leverage. B) Financial leverage. C) Money market leverage. D) Stock market leverage. Show Answer Correct Answer: B) Financial leverage. 38. Caleb is buying a new surfboard for $ 670.00, he has only 5 months to save, what does he need to save each month? A) $ 128.00. B) $ 138.00. C) $ 143.00. D) $ 134.00. Show Answer Correct Answer: D) $ 134.00. 39. What is required for carrying out business activites? A) Debt. B) Money. C) Cash. D) Equity Shares. Show Answer Correct Answer: B) Money. 40. .... is the profit which is likely to be earned in future out of usual trading operations under normal circumstances. A) Adjusted profit. B) Super profit. C) Future maintainable profit. D) Normal profit. Show Answer Correct Answer: C) Future maintainable profit. 41. While designing a capital structure a finance manager should choose a pattern of capital which- A) Minimizes cost of capital. B) Maximizes the owner's return. C) Maximizes the cost of capital and minimizes the owner's return. D) Both (A) and (B). Show Answer Correct Answer: D) Both (A) and (B). 42. It is important to remember that the fundamental identity of accounting is the debit and credit recording activity where debits ..... equal credits. A) A. Always. B) D. Sometimes. C) B. Rarely. D) C Never. Show Answer Correct Answer: A) A. Always. 43. I InsuranceII Emergency FundIII Savings and InvestmentsIV Debt ManagementBased on the above, which should be included into financial plan? A) II, III and IV. B) I, II and III. C) II and III. D) I, II, III and IV. Show Answer Correct Answer: D) I, II, III and IV. 44. How do interest rates affect financial management decisions? A) Higher interest rates always lead to increased profits. B) Interest rates only influence personal savings, not business investments. C) Interest rates have no effect on financial management decisions. D) Interest rates significantly impact borrowing costs, investment decisions, and overall financial strategy. Show Answer Correct Answer: D) Interest rates significantly impact borrowing costs, investment decisions, and overall financial strategy. 45. Which one is correct about short-term financial goals? A) It can be achieved in more than 3 years. B) Involved a large amount of money such as purchasing a house or a car. C) Do not involve a large amount of money, such as purchasing a cell phone, laptop and furniture. D) None of the above. Show Answer Correct Answer: C) Do not involve a large amount of money, such as purchasing a cell phone, laptop and furniture. 46. Q9) What is the role of a financial manager in managing risk? A) Avoiding all risks. B) Accepting all risks. C) Identifying and mitigating risks. D) Transferring all risks to shareholders. Show Answer Correct Answer: C) Identifying and mitigating risks. 47. Under secondary market, sale of securities take place between A) (a) Company and Investors. B) (b) Company and Company. C) C) Investor and other investor. D) (d) None of the above. Show Answer Correct Answer: C) C) Investor and other investor. 48. What is the concept of "working capital" in corporate finance? A) Related to firm's daily ormonthly inflows and outflows. B) The amount of capital invested in long-term assets. C) The total assets of a company. D) The amount of capital invested in equity financing. Show Answer Correct Answer: A) Related to firm's daily ormonthly inflows and outflows. 49. The line items to be included on the face of the statement of financial position are except: A) Property, plant and equipment. B) Inventories. C) Cash and cash equivalents. D) Revenue. Show Answer Correct Answer: D) Revenue. 50. It is considered as separate and distinct from its owners and executives. A) PARTNERSHIP. B) CORPORATION. C) All the above. D) None of the above. Show Answer Correct Answer: B) CORPORATION. 51. The major goal of Financial Managment A) Sales maximisation. B) Wealth maximisation. C) Profit maximisation. D) Customer maximisation. Show Answer Correct Answer: B) Wealth maximisation. 52. What does a declining net profit margin over consecutive periods suggest about an SME's financial performance? A) Declining profitability. B) Increasing profitability. C) Improved efficiency. D) Lower financial risk. Show Answer Correct Answer: A) Declining profitability. 53. Which of the following is considered as the principal financial objective of the firm? A) Welfare of the Society. B) Welfare of Management. C) Shareholder wealth maximisation. D) General welfare of the employees. Show Answer Correct Answer: C) Shareholder wealth maximisation. 54. Which of the following expenditures is a capital expenditure? A) Purchase of plant. B) Purchase of raw material. C) Depreciation. D) Rent. Show Answer Correct Answer: A) Purchase of plant. 55. A network of business owners who want to trade goods and services to increase sales and profit with a reduction of cash outlay A) Barter Business Exchange. B) Barter. C) Sales and Profit. D) Sales. Show Answer Correct Answer: A) Barter Business Exchange. 56. With the help of financial planning capital can be made available at ..... A) Minimum. B) More. C) Zero. D) Medium. Show Answer Correct Answer: A) Minimum. 57. Which of the following statements is/are correct?(1) Factoring with recourse provides insurance against bad debts(2) The expertise of a factor can increase the efficiency of trade receivables management for a company A) 2 only. B) 1 only. C) Neither 1 nor 2. D) 1 and 2. Show Answer Correct Answer: A) 2 only. 58. What are the primary aspects of financial planning within an organization? A) Budgeting and monitoring expenses. B) Determining capital requirements and capital structure. C) Making investment and financing decisions. D) Analyzing financial ratios and cash flow statements. Show Answer Correct Answer: B) Determining capital requirements and capital structure. 59. Which is not a major decision in Financial Management A) Operations Decision. B) Investment Decision. C) Financing Decision. D) Dividend Decision. Show Answer Correct Answer: A) Operations Decision. 60. This is the money paid to the company's shareholders once profit earned A) Retained earning. B) CapEx. C) Interest. D) Dividend. Show Answer Correct Answer: D) Dividend. ← 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 6Class 12 Business Studies Chapter 9 Financial Management Quiz 7Class 12 Business Studies Chapter 9 Financial Management Quiz 8Class 12 Business Studies Chapter 9 Financial Management Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books