This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 6 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The key participants in financial transactions are individuals, businesses, and government. Individuals are net ..... of funds, and businesses are net ..... of funds. A) Users;suppliers. B) Users; providers. C) Purchasers; sellers. D) Suppliers; users. Show Answer Correct Answer: D) Suppliers; users. 2. If you borrow $ 100, 000 at an annual rate of 8.00% for a 10-year period and repay the total amount of principal and interest due of $ 215, 892.50 at the end of 10 years, what type of loan did you have? A) Discount loan. B) Interest-only loan. C) Discount Decline loan. D) Discount and Compound loan. Show Answer Correct Answer: A) Discount loan. 3. Short term unsecured promissory notes that is generally sold by large corporation on discount basis with the maturity period from 1 to 270 days. The statement is best described for ..... A) Commercial paper. B) Preferred shares,. C) Common stocks. D) Bonds. Show Answer Correct Answer: A) Commercial paper. 4. ..... is concerned with the maximization of a firm's stock price. A) Shareholder wealth maximization. B) Stakeholder welfare maximization. C) Profit maximization. D) EPS maximization. Show Answer Correct Answer: A) Shareholder wealth maximization. 5. What is the main role of the board of directors in a firm? A) Managing firm finances. B) Providing government services. C) Top governing body responsible for oversight. D) Overseeing resource mobilization. Show Answer Correct Answer: C) Top governing body responsible for oversight. 6. A ratio to determine the efficiency of managing assets in generating revenue. A) Profitability ratio. B) Liquidity ratio. C) Leverage ratio. D) Asset utilization ratio. Show Answer Correct Answer: D) Asset utilization ratio. 7. A two-year investment of $ 200 is made today at an annual interest rate of 6%. Which of the following statements is true? A) The interest earned in year two is $ 12.00 and year one is $ 12.72. B) The interest earned in year one is $ 12.00 and year two half is $ 12.72. C) The interest earned in year one is $ 12.00 and year two is $ 12.72. D) The future value would be greater if the interest rate were lower. Show Answer Correct Answer: C) The interest earned in year one is $ 12.00 and year two is $ 12.72. 8. What is the purpose of credit decisions in financial firms? A) Minimizing default risk. B) Providing customer service. C) Automating trade decisions. D) Maximizing profits. Show Answer Correct Answer: A) Minimizing default risk. 9. When performing transaction analysis, which of the following is most important to consider? A) The company's advertising budget. B) The number of employees in the company. C) The color of the accounting ledger. D) The impact on both sides of the accounting equation. Show Answer Correct Answer: D) The impact on both sides of the accounting equation. 10. June 2015:The net profit of a company is ₹ 2, 00, 000, preference dividend ₹ 25, 000, and taxes paid ₹ 15, 000. The number of equity shares is 1, 00, 000. The earnings per share (EPS) is- A) ₹ 1.6. B) ₹ 1.5. C) ₹ 1.75. D) ₹ 2. Show Answer Correct Answer: A) ₹ 1.6. 11. Financial management helps in A) The estimation of total requirement of funds and monitoring effective deployment of funds in fixed assets and working capital. B) Long term planning of company's activities. C) Profit planning for the organisation. D) Short term planning. Show Answer Correct Answer: A) The estimation of total requirement of funds and monitoring effective deployment of funds in fixed assets and working capital. 12. If interest rates are currently 5 per cent then the NPV of $ 100 received next year will be $ 95 A) False, it will be less. B) True. C) False, it will be more. D) This cannot be determined. Show Answer Correct Answer: C) False, it will be more. 13. Something that is needed for basic human survival A) Want. B) Need. C) Luxury. D) None of the above. Show Answer Correct Answer: B) Need. 14. Profit loss (income statement) mengukur ..... A) Semua jawaban benar. B) Asset and liability. C) Cash. D) Profitability. Show Answer Correct Answer: B) Asset and liability. 15. Which financial statement provides a snapshot of an airline's assets, liabilities, and equity at a specific point in time? A) Income Statement. B) Balance Sheet. C) Statement of Retained Earnings. D) Cash Flow Statement. Show Answer Correct Answer: B) Balance Sheet. 16. A(n) ..... is the purchase of goods that are not consumed today but are used in the future to create wealth A) Savings. B) Income. C) Investment. D) Credit. Show Answer Correct Answer: C) Investment. 17. Why is it important to check your credit report regularly? A) To see if you qualify for a new credit card. B) To detect and correct any errors or fraudulent activities. C) To show your friends your credit score. D) To apply for more loans. Show Answer Correct Answer: B) To detect and correct any errors or fraudulent activities. 18. Under Private Placement, shares are never offered to( A) (a) Institutes. B) (b) Brokers. C) C) General Public. D) (d) None of the above. Show Answer Correct Answer: C) C) General Public. 19. The objective of wealth maximization takes into consideration: A) Risk related to uncertainty of returns. B) Timing of expected returns. C) Amount of returns expected. D) All of the above. Show Answer Correct Answer: D) All of the above. 20. Long term investment decisions A) Capital budgeting decisions. B) Short term financing. C) All the above. D) None of the above. Show Answer Correct Answer: A) Capital budgeting decisions. 21. A ..... is set up so that employees of corporations or governments can receive income after retirement. A) Savings bank. B) Life insurance company. C) Pension fund. D) Credit union. Show Answer Correct Answer: C) Pension fund. 22. Which of the following is an advantage of preference shares? A) Trade on equity. B) Fixed rate of interest. C) Long-term sources. D) Redemptions. Show Answer Correct Answer: D) Redemptions. 23. When risk increase, the return will A) Increase. B) Decrease. C) No change. D) None. Show Answer Correct Answer: A) Increase. 24. What is the '50/30/20 rule' in budgeting? A) 50% needs, 30% wants, 20% savings and debt repayment. B) 50% savings, 30% needs, 20% wants. C) 50% wants, 30% savings, 20% needs. D) 50% debt repayment, 30% savings, 20% need. Show Answer Correct Answer: A) 50% needs, 30% wants, 20% savings and debt repayment. 25. Encik Rosnan works as a teacher. He earns RM5000 a month. The following list shows the monthly expenditure of Encik Rosnan.House rent = RM750Food = RM 1400Transportation = RM600Hiburan = RM500Others = RM300Calculate the montly cash flow of Encik Rosnan. A) RM1450. B) RM1150. C) RM1050. D) RM1350. Show Answer Correct Answer: A) RM1450. 26. What is a credit referring to a checking account? A) What is on your credit report. B) Subtraction or a minus to the account. C) When you enter your pin number. D) Deposit or an addition to the account. Show Answer Correct Answer: D) Deposit or an addition to the account. 27. John sold goods for cash $ 20, 000. It is an example of ..... A) Personal Account. B) Real Account. C) Natural Account. D) None of the above. Show Answer Correct Answer: B) Real Account. 28. Portion of Profit distributed to the shareholder is A) Dividend. B) Tax. C) Interest. D) Earnings. Show Answer Correct Answer: A) Dividend. 29. Financial decisions involves A) Investment, financing and dividend decisions. B) Investment, financing, and sales decisons. C) Financing, dividend and cash decisions. D) None of the above. Show Answer Correct Answer: A) Investment, financing and dividend decisions. 30. Which driver most directly reduces geographical barriers for firms operating globally? A) Mandatory localisation laws in each country. B) Advanced IT platforms and modern logistics. C) Higher corporate tax rates internationally. D) Decline of multinational corporations worldwide. Show Answer Correct Answer: B) Advanced IT platforms and modern logistics. 31. A plan for managing money during a given period of time A) Objective. B) Goal. C) Budget. D) Value. Show Answer Correct Answer: C) Budget. 32. What is a list of all accounts and their account numbers? A) Trial Balance. B) General Journal. C) Chart of Accounts. D) General Ledger. Show Answer Correct Answer: C) Chart of Accounts. 33. "Machinery is not a financial asset" . Is the statement correct? A) Yes. B) No. C) All the above. D) None of the above. Show Answer Correct Answer: A) Yes. 34. Which is the cheapest Source of Finance A) Debt. B) Equity. C) All the above. D) None of the above. Show Answer Correct Answer: A) Debt. 35. Paying bills through UPI is an example of: A) Digital transaction. B) Borrowing. C) Investing. D) Earning. Show Answer Correct Answer: A) Digital transaction. 36. What has the same meaning as negative cash flow? A) Deficit. B) Surplus. C) All the above. D) None of the above. Show Answer Correct Answer: A) Deficit. 37. What is an example of a VARIABLE expense? A) Cable Bill. B) Water/electricity bill. C) Christmas gifts. D) None of the above. Show Answer Correct Answer: B) Water/electricity bill. 38. Strategi investasi yang bijaksana membantu dalam ..... A) Mendukung pencapaian tujuan finansial. B) Mengidentifikasi masalah keuangan. C) Membangun kekayaan jangka pendek. D) Menyusun anggaran keuangan. Show Answer Correct Answer: A) Mendukung pencapaian tujuan finansial. 39. A ratio that measures the amount of debt that a company uses to buy more assets. An excessive ratio increases the risk of failure, since it becomes more difficult to repay debt. A) Liquidity Ratio. B) Profitability Ratio. C) Utilization Ratio. D) Leverage Ratio. Show Answer Correct Answer: D) Leverage Ratio. 40. Working capital is of- A) Long-term. B) Depreciable. C) High risk. D) Flexible. Show Answer Correct Answer: D) Flexible. 41. Jenna buys a keychain for $ 4.50. Sales tax is 6.5%. What is the TOTAL PRICE? A) .29. B) .28. C) .31. D) .30. Show Answer Correct Answer: A) .29. 42. ..... varies inversely with profitability. A) Liquidity. B) Accounts. C) Risk. D) Trade. Show Answer Correct Answer: A) Liquidity. 43. A financial statement analysis method which compare historical data, such as ratios, or line items, over a number of accounting periods. A) Financial Benchmarking. B) Horizontal Analysis. C) Ratio Analysis. D) Vertical Analysis. Show Answer Correct Answer: B) Horizontal Analysis. 44. A financial year is generally from ..... A) 1st April to 31st March of the next year. B) 1st April to 1st April of the next year. C) 1st March to 31st April of the next year. D) 31st March to 31st March of the next year. Show Answer Correct Answer: A) 1st April to 31st March of the next year. 45. What is the role of a financial manager in an organization? A) To manage human resources and employee relations. B) To oversee the production and supply chain operations. C) To create marketing strategies for the organization. D) The role of a financial manager is to oversee the financial operations, manage budgets, analyze financial data, and ensure compliance with regulations. Show Answer Correct Answer: D) The role of a financial manager is to oversee the financial operations, manage budgets, analyze financial data, and ensure compliance with regulations. 46. The risk that a company will be unable to meet its short-term debt obligations as they come due is called: A) Solvency risk. B) Interest rate risk. C) Liquidity risk. D) Business risk. Show Answer Correct Answer: C) Liquidity risk. 47. Profit maximization focuses mainly on A) Earning the highest possible profit. B) Social welfare. C) Employee satisfaction. D) Maximizing shareholders' wealth. Show Answer Correct Answer: A) Earning the highest possible profit. 48. The primary goal of a publicly owned corporation is to ..... A) Maximize dividends per share. B) Maximize earnings per share after taxes. C) Maximize shareholder wealth. D) Minimize shareholder risk. Show Answer Correct Answer: C) Maximize shareholder wealth. 49. Credits increase: A) Assets and Expenses. B) Liabilities and Equity. C) Assets and Revenues only. D) Expenses and Assets. Show Answer Correct Answer: B) Liabilities and Equity. 50. Which is the main motive is to select activities having positive impact on society in: A) Profit maximization objective. B) Welfare maximization objective. C) Wealth maximization objective. D) None of these. Show Answer Correct Answer: C) Wealth maximization objective. 51. What is essential for ensuring financial stability? A) High spending. B) Economic growth. C) Ignoring financial planning. D) Reducing investments. Show Answer Correct Answer: B) Economic growth. 52. What is ignored in profit maximisation? A) Earnings. B) Dividend. C) Risk. D) Time value. Show Answer Correct Answer: D) Time value. 53. The objective of financial statement is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions. A) True. B) False. C) It depends. D) None of the above. Show Answer Correct Answer: A) True. 54. Expected annual output of the company is 1, 30, 000 units. The selling price is Rs 250. The proportion cost of material-40%, wages 20%, overheads 12% and margin 28%. Calculate the value of work-in-progress assuming processing time of 2 weeks and total 52 weeks in a year. A) Rs 22, 00, 000. B) Rs 7, 00, 000. C) Rs 14, 00, 000. D) Rs 11, 00, 000. Show Answer Correct Answer: B) Rs 7, 00, 000. 55. Eddie buys new ear buds for $ 107.36, he gives the store clerk $ 120.00, what change should he get back? A) $ 20.00. B) $ 9.46. C) $ 11.64. D) $ 12.64. Show Answer Correct Answer: D) $ 12.64. 56. Types of Investment decisions A) Long-term, Medium-term and short term. B) LOng-term and Medium-term. C) Long-term and short term. D) No classification. Show Answer Correct Answer: C) Long-term and short term. 57. ..... represent the cost that shareholders bear due to managers' pursuit of their own interests A) Expenses. B) Stakeholder. C) Agency problem. D) Shareholder. Show Answer Correct Answer: C) Agency problem. 58. Quick Assets do not include ..... A) Debtors. B) Inventory. C) Cash. D) Bills Receivable. Show Answer Correct Answer: B) Inventory. 59. Name the concept which increases the return on equity shares with a change in the capital structure of a company. A) Trading on equity. B) Dividend decision. C) Capital structure. D) Capitol budgeting. Show Answer Correct Answer: A) Trading on equity. 60. A loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as A) Repaid payments. B) Amortized loan. C) Appreciated loan. D) Depreciated loan. Show Answer Correct Answer: B) Amortized loan. ← 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 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