This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 8 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Ke = D/MP x 100, is used for A) Calculating capital structure. B) Reserve. C) Calculating Cost of Equity Share Capital. D) Depreciation. Show Answer Correct Answer: C) Calculating Cost of Equity Share Capital. 2. The formula for compound value is: A) FVn = PV/(1+i). B) FVn = (1+i)/PV. C) FVn = PV (1+i). D) FVn = PV (1+i)$^{n}$. Show Answer Correct Answer: D) FVn = PV (1+i)$^{n}$. 3. Which of the following best describes commercial paper? A) Unsecured long-term loan notes issued by companies. B) Unsecured short-term loan notes issued by companies. C) Secured short-term loan notes issued by companies. D) Secured long-term loan notes issued by companies. Show Answer Correct Answer: B) Unsecured short-term loan notes issued by companies. 4. Risk management: A) Helps identify and mitigate financial risks. B) Protects a company's assets. C) Reduces the company's exposure to risk. D) All of the above. Show Answer Correct Answer: A) Helps identify and mitigate financial risks. 5. Q5) Which principle of sound financial planning relates to spreading investments across different asset types? A) Living beyond means. B) Accumulating excessive debt. C) Diversification. D) Ignoring budgeting. Show Answer Correct Answer: C) Diversification. 6. What would be the financial leverage if Sales is Rs.1, 000; Variable Cost Rs.400; Fixed Cost Rs.300; Interest Rs. 100 A) 5.1. B) 1. C) 2. D) 1.5. Show Answer Correct Answer: D) 1.5. 7. Q2) All constituencies with a stake in the fortunes of the company are known as ..... A) C .Creditors. B) D. Customers. C) A. Shareholders. D) B. Stakeholders. Show Answer Correct Answer: D) B. Stakeholders. 8. What is the main goal of profit maximization? A) Maximizing shareholder wealth. B) Minimizing expenses. C) Enhancing employee skills. D) Increasing market share. Show Answer Correct Answer: A) Maximizing shareholder wealth. 9. Which of the following is not included in the capital structure? A) Preferred stock,. B) Long term debt. C) Retained earnings. D) Current assets. Show Answer Correct Answer: D) Current assets. 10. Which financial tool helps identify a firm's cash surpluses or shortages? A) Liquidity ratio. B) Budgeted balance sheet. C) Line of credit. D) Cash budget. Show Answer Correct Answer: D) Cash budget. 11. Wealth maximization aims to increase what? A) The overall value of assets. B) The level of taxation. C) The number of employees. D) The amount of debt. Show Answer Correct Answer: A) The overall value of assets. 12. How does the 50/30/20 rule work? A) The 50/30/20 rule allocates 50% to savings, 30% to needs, and 20% to wants. B) The 50/30/20 rule divides income into 50% needs, 30% wants, and 20% savings/debt. C) The 50/30/20 rule divides income into 50% savings, 30% for emergencies, and 20% for discretionary spending. D) The 50/30/20 rule suggests spending 50% on entertainment, 30% on bills, and 20% on investments. Show Answer Correct Answer: B) The 50/30/20 rule divides income into 50% needs, 30% wants, and 20% savings/debt. 13. Dividend decision involves: A) Distribution of profit to shareholders. B) Determination of capital structure. C) Allocation of resources. D) Short-term financing. Show Answer Correct Answer: A) Distribution of profit to shareholders. 14. He/she is the one responsible for making investment, financial, and dividend policy-making decisions of a company A) Finance manager. B) Creditor. C) Stockholder. D) Employee. Show Answer Correct Answer: A) Finance manager. 15. This is one of the functions of a Financial Manager which include making decisions on how to fund long term investment and working capital. A) Investing. B) Operating. C) Financing. D) Dividend policies. Show Answer Correct Answer: C) Financing. 16. Tejado Supply has total equity of $ 1, 830, fixed assets of $ 2, 170, long-term debt of $ 740, and short-term debt of $ 430. What is the amount of Tejado's current assets? A) $ 660. B) $ 830. C) $ 400. D) None of the above. Show Answer Correct Answer: B) $ 830. 17. Explain the concept of 'working capital'. A) Working capital refers to the total value of a company's assets. B) Working capital is a measure of a company's long-term investments. C) Working capital is the difference between current assets and current liabilities, indicating a company's short-term financial health. D) Working capital is the amount of cash a company has on hand. Show Answer Correct Answer: C) Working capital is the difference between current assets and current liabilities, indicating a company's short-term financial health. 18. ..... REFERS TO THE INCREASE IN PROFITS EARNED BY THE EQUITY SHAREHOLDERS DUE TO THE PRESENCE OF FIXED FINANCIAL CHARGES A) TRADING ON EQUITY. B) EARNING PER SHARE. C) CAPITAL STRUCTURE. D) RETURN ON INVESTMENT. Show Answer Correct Answer: A) TRADING ON EQUITY. 19. Securities and Exchange Commission (SEC) A) Internal User. B) External User. C) All the above. D) None of the above. Show Answer Correct Answer: B) External User. 20. Which factor does not effect the dividend decision A) Rate of dividend. B) Rate of dividend of the competitor firm. C) History of dividend. D) Risk. Show Answer Correct Answer: D) Risk. 21. Focal point in Financial Management is A) Increasing sales of the firm. B) Increasing Profit. C) Creating shareholder's value. D) Increasing Market Share. Show Answer Correct Answer: C) Creating shareholder's value. 22. What does "liquidity" in financial terms indicate about a company? A) The value of its long-term investments. B) Its ability to meet short-term obligations. C) The efficiency of its production processes. D) The total value of its assets. Show Answer Correct Answer: B) Its ability to meet short-term obligations. 23. Supervision and safeguarding of cash is a A) Production function. B) Financing function. C) Investment function. D) Managerial finance function. Show Answer Correct Answer: D) Managerial finance function. 24. Which of the following is not a characteristic of a debt? A) Dividend. B) Maturity. C) Interest Rate. D) Face Value. Show Answer Correct Answer: A) Dividend. 25. Almost everyone can find at least one way to save money. A) Fact. B) Fiction. C) All the above. D) None of the above. Show Answer Correct Answer: A) Fact. 26. What is the formula to calculate the return on investment (ROI)? A) ROI = Net Income / Total Assets. B) ROI = Net Income / Shareholder Equity. C) ROI = Earnings Before Interest and Taxes (EBIT) / Total Assets. D) ROI = Earnings Before Interest and Taxes (EBIT) / Shareholder Equity. Show Answer Correct Answer: A) ROI = Net Income / Total Assets. 27. ..... is specific risk factor A) Interate rate risk. B) Financial risk. C) Inflation risk. D) Market risk. Show Answer Correct Answer: B) Financial risk. 28. Life insurance helps cover ..... costs when a person dies. A) Funeral costs. B) Housing costs. C) All the above. D) None of the above. Show Answer Correct Answer: A) Funeral costs. 29. What is the primary purpose of analyzing accounting transactions? A) To determine the amount of taxes owed by a business. B) To prepare payroll for employees. C) To evaluate how each transaction affects the financial position of a company. D) To create marketing strategies for the business. Show Answer Correct Answer: C) To evaluate how each transaction affects the financial position of a company. 30. All of the following are primary sources of income except? A) Tips. B) Employment paycheck. C) Interest. D) Loans. Show Answer Correct Answer: D) Loans. 31. What does financial leverage measured? A) No change with EBIT and EPS. B) The sensibility of EBIT with % change with respect to output. C) The sensibility of EPS with % change in the EBIT level. D) % variation in the level of production. Show Answer Correct Answer: C) The sensibility of EPS with % change in the EBIT level. 32. FINANCING DECISIONS RELATE TO THE A) DIVIDEND DECISIONS. B) ACQUISITION OF CAPITAL. C) RESREVE BUILDING. D) ASSETS PROCUREMENT. Show Answer Correct Answer: B) ACQUISITION OF CAPITAL. 33. Intangible fixed assets is A) Land. B) Patentright. C) Machinery. D) Furniture. Show Answer Correct Answer: B) Patentright. 34. CALCULATE THE FIXED EXPENSES IF CONTRIBUTION IS RS 15, 00, 000 AND EBIT IS RS 10, 00, 000 A) RS 5, 00, 000. B) RS 25, 00, 000. C) RS-(5, 00, 000). D) NONE OF THE ABOVE. Show Answer Correct Answer: A) RS 5, 00, 000. 35. What does this describe?When a person contributes their own funds to a business or enterprising activity, with the goal of making a return on their money A) Investment. B) Self Fundinging. C) Debt. D) Equity. Show Answer Correct Answer: A) Investment. 36. Which of the following is/are usually seen as forms of market failure where regulation may be a solution? 1. Imperfect competition 2. Social costs or externalities 3. Imperfect information A) 1 only. B) 1 and 2 only. C) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: D) 1, 2 and 3. 37. There are several types of budgets in a company's financial plan, except A) Tax Budget. B) Operating Budget. C) Cash Budget. D) Capital Budget. Show Answer Correct Answer: A) Tax Budget. 38. What is the cash flow if the income is less than the total expenses. A) Bad cash flow. B) Positive cash flow. C) Neutral cash flow. D) Negative cash flow. Show Answer Correct Answer: D) Negative cash flow. 39. You can use to roughly estimate how many years a given sum of money must earn at a given compound annual interest rate in order to double that initial amount . A) Rule 415. B) Rule of 72. C) Rule of 78. D) Rule of 144. Show Answer Correct Answer: B) Rule of 72. 40. Finance function involves A) Procurement of finance only. B) Expenditure of funds only. C) Safe custody of funds only. D) Procurement and effective utilization of funds. Show Answer Correct Answer: D) Procurement and effective utilization of funds. 41. Yang termasuk kewajiban dalam elemen neraca adalah A) Semua jawaban di atas tidak tepat. B) Beban Bunga. C) Pendapatan diterima dimuka. D) Biaya dibayar dimuka. Show Answer Correct Answer: D) Biaya dibayar dimuka. 42. E-file offers direct deposit for ..... refunds. A) Faster. B) Smaller. C) Increased. D) None of the above. Show Answer Correct Answer: A) Faster. 43. Bentuk dari nilai Integrity antara lain A) Berkomitmen, berdedikasi dan terus mengembangkan diri untuk memberikan nilai lebih pada pekerjaan. B) Saling percaya dan bekerja sama untuk mewujudkan visi bersama. C) Jujur berperilaku positif serta mematuhi aturan perusahaan dan norma sosial. D) Bersemangat, gembira dan bersungguh-sungguh dalam bekerja untuk menjadi yang terbaik. Show Answer Correct Answer: C) Jujur berperilaku positif serta mematuhi aturan perusahaan dan norma sosial. 44. The primary goal of the financial management is ..... A) To maximize profit. B) To maximize the wealth of owners. C) To maximize the return. D) To minimize the risk. Show Answer Correct Answer: A) To maximize profit. 45. You buy a copy of your favorite movie for $ 23.45. You give the clerk $ 25. How much change will you receive? A) $ 1.50. B) .95. C) $ 1.55. D) $ 1.56. Show Answer Correct Answer: C) $ 1.55. 46. How much is Puan Soffia's monthly saving if she wanted to pay the down payment for a RM650, 000 house in six years? A) RM1000.78. B) RM902.78. C) RM900.00. D) RM1111.78. Show Answer Correct Answer: B) RM902.78. 47. The process of planning, evaluating, selecting, and managing the financing of long-term operating projects of the company is termed ..... A) Accounts receivable management. B) Capital structure. C) Working capital management. D) Capital budgeting. Show Answer Correct Answer: D) Capital budgeting. 48. CAPM stands for. A) Capital asset pricing model. B) Capital asset printing model. C) Capital amount printing model. D) Capital amount pricing model. Show Answer Correct Answer: A) Capital asset pricing model. 49. Financial leverage is also known as A) Interest on equity. B) Interest on debt. C) Trading on equity. D) Trading on debt. Show Answer Correct Answer: C) Trading on equity. 50. Which of the following is the best definition for accounting Transaction Analysis A) The method of recording only cash transactions in financial statements. B) A technique for predicting future financial trends based on past data. C) The practice of auditing financial statements for accuracy. D) The process of examining financial transactions to assess their effects on accounts and the accounting equation. Show Answer Correct Answer: D) The process of examining financial transactions to assess their effects on accounts and the accounting equation. 51. Sources of finance are broken down into two categories. What are they? A) Loans and Crowdfunding. B) Debt and Finance. C) Equity and Debt. D) Equity and Borrowing. Show Answer Correct Answer: C) Equity and Debt. 52. ..... is money given for a period of time but must be paid back with interest A) Loan. B) Debt. C) Income. D) Taxes. Show Answer Correct Answer: A) Loan. 53. High financial leverage indicates A) Amount of debt is high as compared to stock. B) Risky investments. C) Fixed assets are purchased with debts. D) All of the above. Show Answer Correct Answer: D) All of the above. 54. This ratio measures the proportion of assets paid for with debt. A) Debt Ratio. B) Cash Ratio. C) Liquidity Ratio. D) Profitability Ratio. Show Answer Correct Answer: A) Debt Ratio. 55. What is the EAR if the APR is 5% and compounding is quarterly? A) Slightly above 5.09%. B) Slightly below 5.09%. C) Under 5.00%. D) Over 5.25%. Show Answer Correct Answer: A) Slightly above 5.09%. 56. How can poor financial management impact a company's credit rating? A) Improves credit rating. B) Stays constant. C) Lowers credit rating. D) It has no effect on credit rating. Show Answer Correct Answer: C) Lowers credit rating. 57. What is the significance of a budget in financial management? A) It eliminates the need for financial reporting. B) It is used solely for tax purposes. C) It provides a framework for planning and controlling financial resources. D) It helps in tracking employee performance. Show Answer Correct Answer: C) It provides a framework for planning and controlling financial resources. 58. -can be current or at a future date A) Date. B) Payee. C) Amount. D) Bank name and address. Show Answer Correct Answer: A) Date. 59. Capital budgeting is associated with A) Long term and short term assets. B) Fixed assets. C) Long term assets. D) Short term assets. Show Answer Correct Answer: C) Long term assets. 60. In India, Commercial papers are issued as per the guidelines issued by ..... A) SEBI. B) RBI. C) Forward Market Commission. D) None of the above. Show Answer Correct Answer: B) RBI. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books