This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 9 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Capital budgeting decisions involve: A) Decisions relating to short term assets. B) Decisions relating to working capital management. C) Decisions relating to long term assets. D) Decisions relating to share investments. Show Answer Correct Answer: C) Decisions relating to long term assets. 2. Statement of Changes in Equity shows: A) Changes in share capital and reserves. B) Changes in profit. C) Changes in assets and liabilities. D) Changes in share price. Show Answer Correct Answer: A) Changes in share capital and reserves. 3. Which of the following is/ are example(s) of financial goal(s)? A) Start an emergency fund. B) Pay off credit card. C) Save for children's education. D) All of the above. Show Answer Correct Answer: D) All of the above. 4. The primary goal of financial management is A) To maximize the returns. B) To maximize the wealth of owners. C) To maximize profit. D) To minimize the risk. Show Answer Correct Answer: B) To maximize the wealth of owners. 5. Hire purchase price = cash price + ..... A) Down payment. B) Principal. C) Interest. D) Instalment. Show Answer Correct Answer: C) Interest. 6. What would be the discount factor of Rupee 1 for year 4 at 10%. A) 0.909. B) 0.683. C) 0.826. D) 0.751. Show Answer Correct Answer: B) 0.683. 7. Which of the above factors helps to determine the capital structure of a firm A) Government policies. B) Degree of control. C) Cost of capital. D) All of the above. Show Answer Correct Answer: D) All of the above. 8. Most suitable combination of owners funds and borrowed funds to generate higher EPS A) Trading of equity. B) Trading on equity. C) All the above. D) None of the above. Show Answer Correct Answer: B) Trading on equity. 9. What is working capital? A) Total assets minus total liabilities. B) Long-term assets minus long-term liabilities. C) Current assets minus current liabilities. D) Fixed assets minus current liabilities. Show Answer Correct Answer: C) Current assets minus current liabilities. 10. What is the main focus of the money market? A) Trading long-term assets. B) Trading short-term instruments. C) Promoting liquidity of financial assets. D) Issuing new securities. Show Answer Correct Answer: B) Trading short-term instruments. 11. Financial Management is based on three principles. Which of the following is not one of these principles? A) Time value of money. B) Risk-return principle. C) Cost-benefit principle. D) Fixed costs versus variable costs. Show Answer Correct Answer: D) Fixed costs versus variable costs. 12. Which of the following statements is true regarding working capital? A) Total liabilities of the business. B) It finances fixed assets of the business. C) It is used for day-to-day business operations. D) It represents excess of current liabilities over current assets. Show Answer Correct Answer: C) It is used for day-to-day business operations. 13. Pendanaan untuk kegiatan internasional dapat berasal dari tiga sumber utama, kecuali A) Pembiayaan berlipat ganda. B) Pembiayaan ekuitas. C) Pembiayaan utang. D) Pembiayaan intra-perusahaan. Show Answer Correct Answer: A) Pembiayaan berlipat ganda. 14. High receivable turnover rate does not automatically mean good or efficient collection of the company. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 15. Money currently used by different countries A) Currency (bills and coins). B) Check. C) Bank Draft. D) Money Order. Show Answer Correct Answer: A) Currency (bills and coins). 16. A company's IT budget only covers hardware costs A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 17. Based on the example below, which items need to be included in a financial plan?I. InsuranceII. Emergency fundIII. Savings and investmentsIV. Debts management A) II and III. B) I, II and III. C) II, III and IV. D) I, II, III and IV. Show Answer Correct Answer: D) I, II, III and IV. 18. Financial Management is mainly concerned with ..... A) All aspects of acquiring and utilizing financial resources for firms activities. B) Arrangement of funds. C) Efficient Management of every business. D) Profit maximization. Show Answer Correct Answer: A) All aspects of acquiring and utilizing financial resources for firms activities. 19. ..... and ..... carry a fixed rate of interest and are to be paid off irrespective of the firm's revenues A) Dividends, Bonds. B) Debentures, Dividends. C) Debentures, Bonds. D) Dividends, Treasury notes. Show Answer Correct Answer: C) Debentures, Bonds. 20. What is a fundamental concept in financial management? A) Investment. B) Debt. C) Frugality. D) Growth. Show Answer Correct Answer: D) Growth. 21. A project has the following projected cash inflows.Year 1-100, 000Year 2-125, 000Year 3-105, 000Working capital is required to be in place at the start of each year equal to 10% of the cash inflow for that year.The cost of capital is 10%.What is the present value of the working capital? A) $ Nil. B) $ 33, 000. C) $ (30, 036). D) $ (2, 735). Show Answer Correct Answer: D) $ (2, 735). 22. Preparation of a detailed, comprehensive and personalized plan for each company in which the objectives to be achieved and the costs that this will entail are determined, the resources that will be necessary are identified and a deadline is set to make them a reality. A) Efficiency. B) Financial planning. C) Valued added. D) Economic indicators. Show Answer Correct Answer: B) Financial planning. 23. Technological advancements in finance primarily accelerated which outcome for global capital markets? A) Deeper liquidity and faster price discovery. B) Reduced cross-border information flow. C) Slower trade execution across exchanges. D) Elimination of multinational corporations. Show Answer Correct Answer: A) Deeper liquidity and faster price discovery. 24. How does financial management affect standard of living? A) It only affects businesses. B) It decreases standard of living. C) It improves standard of living. D) It has no effect. Show Answer Correct Answer: C) It improves standard of living. 25. Decisions affecting liquidity and profitability of a business A) Short term. B) Long Term Investment decisions. C) All the above. D) None of the above. Show Answer Correct Answer: A) Short term. 26. It is the amount which is earned without investing time, money A) Return earnings. B) Leverage. C) Divident. D) Amount. Show Answer Correct Answer: B) Leverage. 27. Cost of the company fund is the cost of capital A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 28. TVM stands for what? A) Time Valuable of Management. B) Total Value of Management. C) Total Valuable of Money. D) Time Value of Money. Show Answer Correct Answer: D) Time Value of Money. 29. If an employee works 56 hours in one week, and earns $ 14.00 an hour, what would be his gross pay for the week? A) $ 896.00. B) $ 784.00. C) $ 560.00. D) $ 1, 230. Show Answer Correct Answer: A) $ 896.00. 30. A school decides to have larger classes, and examination results suffer as a result. In terms of the 'value for money' framework, which of the following statements is true? A) Economy has increased but efficiency has decreased. B) Efficiency has increased but effectiveness has decreased. C) Economy has increased but effectiveness has decreased. D) Economy has increased but efficiency and effectiveness have decreased. Show Answer Correct Answer: C) Economy has increased but effectiveness has decreased. 31. ..... is simply the interest earned in subsequent periods on the interest earned in prior periods. A) Compound interest. B) Simple interest. C) Anticipated interest. D) Quoted interest. Show Answer Correct Answer: A) Compound interest. 32. Which one of the following financial decisions immediately changes the firm's average cost of capital? A) Increase dividend pay-out ratio. B) Employ more debt. C) Store more finished products. D) Invest in a new potential project. Show Answer Correct Answer: B) Employ more debt. 33. Which is not an example of an unexpected event? A) Car accident. B) Fire. C) Breaking your arm. D) Trip to DIsney World. Show Answer Correct Answer: D) Trip to DIsney World. 34. Which of the statements below is FALSE? A) Cash flow to owners shows cash paid to owners plus any new borrowing from owners. B) The cash that the firm generates from its operating decisions (use of its assets) is used to either pay creditors or the owners of the company. C) Cash flow to creditors shows a portion of how the firm is financing the operations. D) Cash flow from assets shows the success or failure of the operating decisions. Show Answer Correct Answer: A) Cash flow to owners shows cash paid to owners plus any new borrowing from owners. 35. Which of the following statements is TRUE if you increase your monthly payment above the required loan payment? A) The extra portion of the payment does not go to the principal. B) The extra portion of the payment increases the principal. C) You can significantly increase the number of payments needed to pay off the loan. D) You can significantly reduce the number of payments needed to pay off the loan. Show Answer Correct Answer: D) You can significantly reduce the number of payments needed to pay off the loan. 36. The efficient and effective management of funds. A) Finance. B) Evaluating Investments. C) Financial Management. D) Financial Institution. Show Answer Correct Answer: C) Financial Management. 37. Is a company issue bonus shares the debt equity ratio A) A. Remain unaffected. B) B will be affected. C) C. Will improve. D) D. None of the above. Show Answer Correct Answer: C) C. Will improve. 38. Daniel earns a net salary of RM3680 a month. He receives a commission of RM350 and a passive income of RM500. If Daniel practices a smart financial plan, what is his fixed saving? A) RM403. B) RM453. C) RM416. D) RM368. Show Answer Correct Answer: D) RM368. 39. What type of risk is associated with market fluctuations? A) Systematic risk. B) Liquidity risk. C) Credit risk. D) Operational risk. Show Answer Correct Answer: A) Systematic risk. 40. Failure to read and understand the information in the Notes to the Financial statements may be obscure managers in evaluating the degree of risk. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 41. Financial planning means ..... of financial activities. A) Not determining. B) Pre-determining. C) Determining. D) Later-determining. Show Answer Correct Answer: B) Pre-determining. 42. Comparing the costs of an IS project with its benefits is called:b) A) Budgeting. B) Risk Assessment. C) Return on Investment (ROI). D) Cost-Benefit Analysis. Show Answer Correct Answer: D) Cost-Benefit Analysis. 43. What is the purpose of financial ratios? A) To evaluate a company's financial performance and stability. B) To predict future stock prices. C) To assess employee performance. D) To determine a company's market share. Show Answer Correct Answer: A) To evaluate a company's financial performance and stability. 44. The ..... offers free file software for individuals who have an income below $ 62, 000. A) Schools. B) IRS. C) Employer. D) None of the above. Show Answer Correct Answer: B) IRS. 45. What is an example of non-depository Institution? A) Credit Unions. B) Saving Bank. C) Pawn shops. D) Commercial Banks. Show Answer Correct Answer: C) Pawn shops. 46. Which step comes first in the process of accounting transaction analysis? A) Preparing the trial balance. B) Posting to the general ledger. C) Identifying the accounts affected by the transaction. D) Calculating net income. Show Answer Correct Answer: C) Identifying the accounts affected by the transaction. 47. Will the company be able to pay its short-term debts? A) Customers. B) Creditors. C) Marketing. D) Finance. Show Answer Correct Answer: B) Creditors. 48. What is a savings account? A) A for profit institution that offers personal loans, mortgages and other services. B) A business that provides money related services. C) An interest bearing account where people put money for future use. D) None of the above. Show Answer Correct Answer: C) An interest bearing account where people put money for future use. 49. What is the importance of financial planning related to the development of growth and expansion plans? A) To aid in the development of growth and expansion plans. B) To hinder the development of growth and expansion plans. C) To ignore the development of growth and expansion plans. D) To delay the development of growth and expansion plans. Show Answer Correct Answer: A) To aid in the development of growth and expansion plans. 50. Financial managers are interested in the information contained in the firm's accrual-based financial statements their primary focus is on cash flows/without adequate cash to pay obligations on time, to fund operations and growth A) Notes to Financial Statements. B) Statement of Cash Flows. C) Cash Flow Analysis. D) Statement of Retained Earnings. Show Answer Correct Answer: C) Cash Flow Analysis. 51. Name the activity that is not among the daily activities of financial management A) Credit management. B) The receipt and disbursement of funds. C) Inventory control. D) Sale of shares and bonds. Show Answer Correct Answer: D) Sale of shares and bonds. 52. How are savings and debt related? A) Savings may increase the fees for debt. B) Savings may increase the costs of debt. C) Savings may reduce the need for debt. D) Savings may reduce the credit history of debt. Show Answer Correct Answer: C) Savings may reduce the need for debt. 53. Which financial metric is often used to assess profitability? A) Operating Income. B) Net Profit Margin. C) Gross Profit Margin. D) Return on Investment. Show Answer Correct Answer: B) Net Profit Margin. 54. The financial activities which are performed regularly are known as: A) Non-recurring finance functions. B) Recurring finance functions. C) Both of these. D) None of these. Show Answer Correct Answer: B) Recurring finance functions. 55. Capital structure is a part of the liability side of a balance sheet. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 56. A ..... is a plan specifying how money will be used or spent during a particular period. A) Accounting equation. B) Financial plan. C) Budget. D) Financial forecast. Show Answer Correct Answer: C) Budget. 57. How can businesses typically finance their growth? A) Downsizing the workforce. B) Borrowing capital. C) Cutting marketing expenses. D) Reducing product offerings. Show Answer Correct Answer: B) Borrowing capital. 58. Firms having stable earnings prefer to give less dividend. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 59. Berikut ini merupakan 3T agar simpanan bisa dijamin LPS, kecuali: A) Tercatat pada pembukuan Bank. B) Tidak melakukan tindakan yang merugikan bank. C) Tingkat bunga < bunga jaminan LPS. D) Tertib bayar cicilan. Show Answer Correct Answer: D) Tertib bayar cicilan. 60. The financial activities which are performed only on special events like promotion. Amalgamation and solvency crisis are called as: A) Non-recurring finance functions. B) Recurring finance functions. C) Both of these. D) Both of these. Show Answer Correct Answer: A) Non-recurring finance functions. ← 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