This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 7 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The set of financial activities that support the OPERATIONS of a business is best described by which main area of finance? A) Corporate finance. B) Investments. C) Financial institutions and markets. D) International finance. Show Answer Correct Answer: A) Corporate finance. 2. What is crucial for safeguarding funds? A) Ignoring expenses. B) Overspending. C) Proper allocation. D) Investing in risky assets. Show Answer Correct Answer: C) Proper allocation. 3. What does the term "time value of money" imply? A) Money today is worth the same as money in the future. B) Future money is worth less than money today. C) Interest rates do not affect cash flow valuation. D) All cash flows are treated equally, regardless of timing. Show Answer Correct Answer: B) Future money is worth less than money today. 4. What annual rate of return must you earn to double your money in about 9 years? Use the Rule of 72 to determine your answer. A) You would need to earn an annual rate of return of about 8%. B) You would need to earn an annual rate of return of about 10%. C) There is not enough information to answer this question. D) You would need to earn an annual rate of return of about 12%. Show Answer Correct Answer: A) You would need to earn an annual rate of return of about 8%. 5. Business finance is a part of A) Personal finance. B) Private finance. C) Public finance. D) Corporate finance. Show Answer Correct Answer: B) Private finance. 6. Working Capital= Current Assets A) Minus Current Liabilities. B) Plus Current Liabilities. C) All the above. D) None of the above. Show Answer Correct Answer: A) Minus Current Liabilities. 7. It corresponds to an indicator that defines how many products or services have been produced for each of the resources used in their production (labor, time and capital, among others) within a determined period. A) Optimize. B) Productivity. C) Costs. D) Utility. Show Answer Correct Answer: B) Productivity. 8. .... is also called as opportunity Cost. A) Marginal Cost. B) Implicit Cost. C) Explicit Cost. D) Average Cost. Show Answer Correct Answer: B) Implicit Cost. 9. There is ..... relation between operational expenditures and debt financing A) Direct. B) Inverse. C) No relation. D) None of the above. Show Answer Correct Answer: B) Inverse. 10. Malik receives a pocket money of RM 150 every month from his father. He wants to buy a laptop with the price of RM 2 300 and his father agrees to pay 20% of the laptop's price. Calculate the duration of time needed by Malik to buy the laptop if he saves RM 80 every month from his pocket money. A) 2 years and 5 months. B) 1 year and 11 months. C) 1 year and 1 month. D) 11 months. Show Answer Correct Answer: B) 1 year and 11 months. 11. All fixed assets and part of the permanent will be financed by long-term financing. The statement is best described for ..... A) Hedging approach. B) Preserve approach. C) Aggressive approach. D) Conservative approach. Show Answer Correct Answer: C) Aggressive approach. 12. Shares issued to the promoters of a company A) Right share. B) Deferred share. C) No par share. D) Sweat equity share. Show Answer Correct Answer: B) Deferred share. 13. Which of the following statement is false?a. Horizontal analysis is used in the review of a company's financial statements over multiple periods.b. Horizontal analysis usually depicts percentage growth over the same line item in the base year.c. Horizontal analysis does not allow financial statement users to easily spot trends and growth patterns. A) B. B) A. C) C. D) All statements are false. Show Answer Correct Answer: C) C. 14. Issuance of bonds to obtain cash A) Financing Activities. B) Operating Activities. C) Investing Activities. D) None of the above. Show Answer Correct Answer: A) Financing Activities. 15. What would happen if your expenses are greater than your income? A) You would be in debt. B) You could loan people money. C) You could save more oney. D) You would be rich. Show Answer Correct Answer: A) You would be in debt. 16. The income statement begins with revenue and subtracts various operating expenses until arriving at Earnings Before Interest and Taxes. Next, interest expense is subtracted to find the taxable income for the period. Then the appropriate taxes are calculated and subtracted. We finally arrive at the ..... , the so-called bottom line of the income statement. A) After-tax income. B) EBIT. C) Net income. D) Before-tax income. Show Answer Correct Answer: C) Net income. 17. .Long term finance is required for ..... A) Current assets. B) Fixed assets. C) Intangible assets. D) None of these. Show Answer Correct Answer: B) Fixed assets. 18. Long-term financial objectives are: A) Concerned with growing the business. B) Concerned with meeting current debts of the business. C) Concerned with meeting shareholder expectations. D) Concerned with increasing capital investment. Show Answer Correct Answer: A) Concerned with growing the business. 19. Are the following statements true or false? True False 1. Cash flow forecasting is primarily the responsibility of financial reporting. 2. Whether to undertake a particular new project is a financial management decision. A) True & True. B) False & False. C) True & False. D) False & True. Show Answer Correct Answer: C) True & False. 20. Other term for working capital A) Long-term capital. B) Fixed capital. C) Circulating capital. D) Retained earnings. Show Answer Correct Answer: C) Circulating capital. 21. With the help of financial planning capital can be made available at ..... cost.(a) (b) (c) (d) A) Zero. B) Minimum. C) Medium. D) More. Show Answer Correct Answer: B) Minimum. 22. When considering each financial decision alternative or possible action in terms of its impact on the share price of the firm's stock, financial managers should accept only those actions that are expected to increase the firms profitability. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 23. Criteria that measures how quickly project will return its original investment is? A) Accounting rate of return. B) Internal rate of return. C) Payback period. D) Benefit cost ratio. Show Answer Correct Answer: C) Payback period. 24. Used to borrow money to gain something you cannot afford at one time A) Debit card. B) Cash. C) Check. D) Credit card. Show Answer Correct Answer: D) Credit card. 25. The cash conversion cycle is: A) The time between cash payment and cash collection. B) The time taken to convert raw materials into finished goods. C) The time between inventory purchase and cash collection from sales. D) The time between ordering and receiving inventory. Show Answer Correct Answer: C) The time between inventory purchase and cash collection from sales. 26. Dividend decisions involve A) Retained earnings. B) Dividends. C) Distributable profit. D) All of the above. Show Answer Correct Answer: D) All of the above. 27. In the grocery store, the food displays at the end of the aisle are the best buys. A) Fact. B) Fiction. C) All the above. D) None of the above. Show Answer Correct Answer: B) Fiction. 28. Current assets of a business firm should be financed through: A) Current liability only. B) Long-term liability only. C) Both types (i.e. long and short term liabilities). D) Shareholders' funds. Show Answer Correct Answer: A) Current liability only. 29. What is a common financial ratio used to assess liquidity? A) Price-Earnings Ratio. B) Return on Investment (ROI). C) Debt-to-Equity Ratio. D) Current Ratio. Show Answer Correct Answer: D) Current Ratio. 30. Hal mana yg tidak termasuk dalam working capital? A) Property, Gedung dan peralatan. B) Inventory. C) Account Receivable. D) Semua jawaban benar. Show Answer Correct Answer: A) Property, Gedung dan peralatan. 31. ARP is a charity providing transport for people visiting hospitals.Which of the following performance measures would BEST fit with efficiency in a value for money review? A) Number of communities served. B) Cost per journey to hospital. C) A comparison of actual operating expenses against the budget. D) Percentage of members who re-use the service. Show Answer Correct Answer: B) Cost per journey to hospital. 32. What is the value of the firm usually based on? A) The value of debt and equity. B) The value of equity. C) The value of debt. D) The value of assets plus liabilities. Show Answer Correct Answer: B) The value of equity. 33. Prinsip investasi adalah? A) Menimbun kekayaan agar kita bisa sombong. B) Menunda Konsumsi Hari Ini untuk Konsumsi Kemudian Hari. C) Mendapatkan keuntungan dengan cara apapun. D) None of the above. Show Answer Correct Answer: B) Menunda Konsumsi Hari Ini untuk Konsumsi Kemudian Hari. 34. What is the purpose of investment analysis? A) To determine the best time to sell an investment. B) The purpose of investment analysis is to assess the viability and profitability of an investment. C) To predict future market trends without data analysis. D) To evaluate the emotional impact of investing on individuals. Show Answer Correct Answer: B) The purpose of investment analysis is to assess the viability and profitability of an investment. 35. Cash flow from assets is derived from ..... A) Cash flow from creditors and cash flow from investing activities. B) Cash flow from operating activities and cash flow from financing activities. C) Cash flow from operating activities and cash flow from investing activities. D) Cash flow from financing activities and cash flow from investing activities. Show Answer Correct Answer: C) Cash flow from operating activities and cash flow from investing activities. 36. Employees Provident Fund is an example of a financial institution. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 37. What percentage of income does the 40-30-20-10 rule allocate to savings? A) 10%. B) 20%. C) 30%. D) 40%. Show Answer Correct Answer: B) 20%. 38. Return on investment is computed as? A) EBT / Total Investment. B) Total Investment X EBIT. C) EBIT X EBT. D) EBIT / Total Investment. Show Answer Correct Answer: D) EBIT / Total Investment. 39. .... maintains the foreign exchange reserves in India? A) State Bank of India. B) Reserve Bank of India. C) EXIM India. D) Finance Ministry of India. Show Answer Correct Answer: B) Reserve Bank of India. 40. If for the next 40 years you place $ 3, 000 in equal year-end-deposits into an account earning 8% per year, how much money will be in the account at the end of that time period? A) $ 777, 179.56. B) $ 777, 159.56. C) $ 777, 189.56. D) $ 777, 169.56. Show Answer Correct Answer: D) $ 777, 169.56. 41. Money invested in a business in return for a share in the profits from the business. A) Collateral. B) Interest. C) Equity Capital. D) All of these. Show Answer Correct Answer: C) Equity Capital. 42. Reason for time value of money A) Inflation. B) Reinvestment purpose. C) Uncertainity. D) All the above. Show Answer Correct Answer: D) All the above. 43. Net pay is the pay you receive each pay period A) Before any deductions. B) After all taxes and deductions. C) After retirement only is deducted. D) None of the above. Show Answer Correct Answer: B) After all taxes and deductions. 44. Why are financial statements important for entrepreneurs? A) To decorate the office walls. B) To confuse the competitors. C) To provide valuable information about the financial health and performance of a business. D) To provide entertainment for the employees. Show Answer Correct Answer: C) To provide valuable information about the financial health and performance of a business. 45. The ..... model is usually considered the best of the capital budgeting decision-making models. A) Profitability index (PI). B) Net past value (NPV). C) Internal rate of return (IRR). D) Net present value (NPV). Show Answer Correct Answer: D) Net present value (NPV). 46. Factoring deals with ..... A) Borrowing against bills of exchange. B) Management of debtors. C) Borrowing from banks. D) Payment of creditors. Show Answer Correct Answer: B) Management of debtors. 47. Progressive tax rate schedule, average tax rate:tax divided by the pretax income A) Cattle. B) Barter. C) Corporate Capital Gains. D) Ordinary Corporate Income. Show Answer Correct Answer: D) Ordinary Corporate Income. 48. Efficient management of every business is closely linked with efficient management of its finances. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 49. If an SME's quick ratio is significantly lower than its current ratio, what might be a potential concern? A) High liquidity risk. B) Efficient inventory management. C) Strong solvency position. D) Effective receivables management. Show Answer Correct Answer: A) High liquidity risk. 50. Four years ago, Robert's annual salary was $ 52, 500. Today, he earns $ 73, 800. What has been the average annual rate of growth of Robert's salary? A) 8.89%. B) 10.38%. C) $ 5, 325 per year. D) 41.52%. Show Answer Correct Answer: A) 8.89%. 51. How much is Puan Soffia's monthly saving if she wanted to pay the down payment(10%) for a RM650, 000 house in five years?Berapakah simpanan bulanan yang perlu Puan Soffia simpan jika dia ingin membayar wang pendahuluan (10%) untuk sebuah rumah yang bernilai RM 650, 000 dalam tempoh masa 5 tahun? A) RM1111.78. B) RM902.78. C) RM900.00. D) RM1083.33. Show Answer Correct Answer: D) RM1083.33. 52. Reena is a government employee, for which she gets a handsome package, accommodation & conveyance. Identify the different types of family income of her.a. Money incomeb. Indirect incomec. Psychic incomed. Direct income A) Option a, c, d. B) Option b, c, d. C) Option a, b, c. D) Option a, c, d. Show Answer Correct Answer: C) Option a, b, c. 53. Sale of land from book value A) Investing Activities. B) Financing Activities. C) Operating Activities. D) None of the above. Show Answer Correct Answer: A) Investing Activities. 54. Purchased from the post office or other outlets and used to pay for goods, services or debts A) Warehouse Receipt. B) Check. C) Money Order. D) Bank Draft. Show Answer Correct Answer: C) Money Order. 55. The financial objectives in terms of decision criteria may be: A) Any of these. B) Wealth maximization. C) Welfare maximization. D) Profit maximization. Show Answer Correct Answer: A) Any of these. 56. Ratios that measure the ability of the firm to pay its long-term financing and the extent of a firm's financing. A) Profitability Ratio. B) Liquidity Ratio. C) Activity Ratio. D) Solvency Ratio. Show Answer Correct Answer: D) Solvency Ratio. 57. What is an agreement between a lender and a borrower, who promises to repay the lender at a later date, with interest? A) Investment. B) Credit. C) Savings. D) Debt. Show Answer Correct Answer: B) Credit. 58. The time value of money means that money today is generally worth more than the same amount in the future A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 59. Effective Working Capital Management is primarily concerned with: A) Ensuring the firm maintains an optimal mix of debt and equity. B) Maximizing the return on long-term capital investments. C) Managing current assets and current liabilities to ensure short-term liquidity. D) Reducing the cost of goods sold. Show Answer Correct Answer: C) Managing current assets and current liabilities to ensure short-term liquidity. 60. The government finance which includs the principles and practices relating to the Procurement and management of funds for Central Government, and Local bodies is known as: A) Public finance. B) Business Finance. C) Private Finance. D) All of these. Show Answer Correct Answer: A) Public finance. ← 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 8Class 12 Business Studies Chapter 9 Financial Management Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books