80 + Mcqs in Accountancy Page 1 McqOptions

1.	Which is the Principle of Capital Structure?
A.	Risk principle
B.	Cost and control principle
C.	Both (a) and (b)
D.	None of the above
Answer» D. None of the above

Discussion

2.	When Capital Redemption Reserve Account is opened ?
A.	At the time of Reserve
B.	At the time of equity repayment
C.	At the time of Preference Share Redemption
D.	All of the above
Answer» D. All of the above

Discussion

3.	The need of capital budgeting in a firm arises on account of the
A.	Selection of the best project
B.	Analysis of capital expenditure
C.	Control over capital expenditure
D.	All of the above
Answer» E.

Discussion

4.	"Capital budgeting as acquiring inputs with long run return". Who said?
A.	Lynch
B.	J. Betty
C.	Richard and Green
D.	Charles Horngreen
Answer» D. Charles Horngreen

Discussion

5.	The Financial Management is responsible for the
A.	Recording the transaction
B.	Finance function of the firm
C.	Controlling of the organisation
D.	Organising training programmes
Answer» C. Controlling of the organisation

Discussion

6.	The Present Value of all inflows are cumulated in
A.	Order of Time
B.	Order of Cash
C.	Order of Sales
D.	Order of Investment
Answer» B. Order of Cash

Discussion

7.	If the annual cash inflows are constant, the pay-back period can be computed by clividing cash outlay by
A.	Profit
B.	Expenses
C.	Annual cash inflow
D.	Annual Sales flows
Answer» D. Annual Sales flows

Discussion

8.	Profit maximisation is
A.	Primary objective of business
B.	It is indicator of economic efficiency
C.	Measurement of Success of business decisions
D.	All of the above
Answer» E.

Discussion

9.	Which is the traditional method of Capital budgeting?
A.	Payout Method
B.	Pay back Method
C.	Accounting Method
D.	All of the above
Answer» E.

Discussion

10.	The significance of capital budgeting arises mainly due to the
A.	Large Investment
B.	Irreversible in nature
C.	Complicacies of Investment decisions
D.	All of the above
Answer» E.

Discussion

11.	Which is the determinants of Capital Structure?
A.	Tax
B.	Control
C.	Government Policy
D.	Requirement of Investors
Answer» D. Requirement of Investors

Discussion

12.	Which method of capital budgeting called benefit cost ratio?
A.	Payout period method
B.	Pay back period method
C.	Profitability Index method
D.	Net present value method
Answer» D. Net present value method

Discussion

13.	If the company announces dividend then it is necessary to pay it
A.	Within five years
B.	Within six years
C.	Within seven years
D.	Within certain time
Answer» E.

Discussion

14.	Dividend is the portion of
A.	Debt
B.	Profit
C.	Assets of the company
D.	Current Assets of the company
Answer» C. Assets of the company

Discussion

15.	Dividend is allocated to the shareholders of
A.	The Debtors
B.	The Creditors
C.	The Customer
D.	The Company
Answer» E.

Discussion

16.	Which is the function of finance as per John J. Hampton ?
A.	Managing funds
B.	Managing assets
C.	Liquidity function
D.	All of the above
Answer» E.

Discussion

17.	Factoring involves
A.	Provision of Specialised Services relating to credit investigation
B.	Purchase and Collection of debts
C.	Sales ledger management
D.	All of the above
Answer» E.

Discussion

18.	A sound dividend policy contains the ________ features.
A.	Stability
B.	Distribution of dividend in cash
C.	Gradually Rising dividend Rates
D.	All of the above
Answer» E.

Discussion

19.	Factoring is a
A.	Cost of Sales
B.	Production Plan
C.	Financial Planning
D.	New Financial Service
Answer» E.

Discussion

20.	Capital Employed is
A.	Bank
B.	Cash + Bank
C.	Assets + Cash
D.	Shareholders Funds + Long Term Funds
Answer» E.

Discussion

21.	Which ratio explains that how much portion of earning is distributed in the form of dividend?
A.	Pay-out Ratio
B.	Equity-Debt Ratio
C.	Earning Yield Ratio
D.	Dividend-Debt Ratio
Answer» B. Equity-Debt Ratio

Discussion

22.	Financial planning starts with the preparation of
A.	Cash budget
B.	Master budget
C.	Balance sheet
D.	None of the above
Answer» E.

Discussion

23.	A company pays dividend at the
A.	End of the financial year
B.	End of the month
C.	End of the week
D.	All of the above
Answer» B. End of the month

Discussion

24.	The dividend on equity shares is only paid when dividend on _____________has already been paid.
A.	Bond
B.	Debenture
C.	Equity Shares
D.	Preference Shares
Answer» E.

Discussion

25.	Which is not the form of dividend?
A.	Stock
B.	Regular
C.	Property
D.	Zero Dividend
Answer» E.

Discussion

26.	Dividend is Product of
A.	Productivity
B.	Management
C.	Dividend Policy
D.	Plant and Machinery
Answer» D. Plant and Machinery

Discussion

27.	Which type of function may be performed by the finance manager for management of profitability?
A.	Pricing
B.	Cost control
C.	Forecasting future Profits
D.	All of the above
Answer» E.

Discussion

28.	Dividend is given on
A.	Debt Capital
B.	Equity Capital
C.	Bank Loan (long term)
D.	Borrowed (Debenture) Capital
Answer» C. Bank Loan (long term)

Discussion

29.	Which is the type of dividend?
A.	Interest
B.	Cash Dividend
C.	Flexible Capital
D.	Profit cum-reserve
Answer» C. Flexible Capital

Discussion

30.	Which is the form of dividend?
A.	Cash dividend
B.	Bond dividend
C.	Stock dividend
D.	All of these
Answer» E.

Discussion

31.	The Present values of total cash inflows should be compared with Present value of
A.	Income
B.	Investment
C.	Cash Inflows
D.	Cash Outflows
Answer» E.

Discussion

32.	Suppliers and creditors of a firm are interested in
A.	Debt position
B.	Liquidity position
C.	Profitability position
D.	Market share position
Answer» C. Profitability position

Discussion

33.	Debt Equity Ratio is computed by
A.	Reserve / Capital
B.	Assets / Current Assets
C.	(Reserve + Capital + Loss) / 2
D.	Total Liabilities / Shareholders Equity
Answer» E.

Discussion

34.	Degree of operating leverage can be computed by
A.	Sales / Fixed Cost
B.	% Sales / % Profit
C.	Sales /Cost of production
D.	(% ∆ in Operating Income) / (% ∆ in sales )
Answer» B. % Sales / % Profit

Discussion

35.	Current Ratio can be computed by
A.	Assets / Stock
B.	Stock / Debtors
C.	(Stock + Cash + Share) /100
D.	Current Assets / Current Liabilities
Answer» E.

Discussion

36.	The Gordon 's model of dividend policy is based on
A.	The firm has perpetual life
B.	In the firm r and K remain unchange
C.	The firm only uses retained earnings for financing its investment, it is all equity firm
D.	All of the above
Answer» E.

Discussion

37.	Price Ratio Method is
A.	Asset Method
B.	Growth Method
C.	Earning Yield Method
D.	Dividend Yield Method
Answer» D. Dividend Yield Method

Discussion

38.	What is the advantage of 'NPV Method'?
A.	This method can be allied where cash inflows are even
B.	It takes into account the objective of maximum profitability
C.	This method considers the entire economic life of the project
D.	All of these
Answer» E.

Discussion

39.	The relationship between the cost of equity and financial leverage in accordance with MM proposition II can be expressed by
A.	R = Equity /100
B.	R = Equity / Income
C.	R = (Equity / Debt) x 100
D.	None of these
Answer» D. None of these

Discussion

40.	Which one is the principle of capital structure?
A.	Risk principle
B.	Cost principle
C.	Control principle
D.	All of these
Answer» E.

Discussion

41.	In not-for-profit organisations, excess of expenditure over income is called—
A.	Loss
B.	Profit
C.	Deficit
D.	Surplus
Answer» D. Surplus

Discussion

42.	In non-trading concerns, excess of income over expenditure is called—
A.	Profit
B.	Surplus
C.	Loss
D.	Deficit
Answer» C. Loss

Discussion

43.	Donation received for specific objective will be shown—
A.	In Income and Expenditure A/c
B.	On Liabilities side of B/S
C.	On Assets side of B/S
D.	In none of these
Answer» C. On Assets side of B/S

Discussion

44.	Income and Expenditure Account generally indicates—
A.	Surplus/Deficit
B.	Cash Balance
C.	Capital Fund
D.	Net Profit/Loss
Answer» B. Cash Balance

Discussion

45.	Receipts and Payments Account usually indicates—
A.	Surplus
B.	Capital Fund
C.	Debit Balance
D.	Credit Balance
Answer» D. Credit Balance

Discussion

46.	Income and Expenditure Account is prepared—
A.	By Business Organisation
B.	By Industrial Organisation
C.	By Not-for-profit Organisation
D.	By all Organisations
Answer» D. By all Organisations

Discussion

47.	Income & Expenditure A/c is a—
A.	Personal A/c
B.	Real A/c
C.	Nominal A/c
D.	None of these
Answer» D. None of these

Discussion

48.	Receipts & Payments A/c is a—
A.	Personal A/c
B.	Real A/c
C.	Nominal A/c
D.	None of these
Answer» C. Nominal A/c

Discussion

49.	For non-trading organisation honorarium is—
A.	A Capital Expenditure
B.	A Revenue Expenditure
C.	An Income
D.	None of these
Answer» C. An Income

Discussion

50.	Life membership fees received by Club is shown in—
A.	Income and Expenditure A/c
B.	Balance Sheet
C.	Receipts and Payments A/c
D.	None of these
Answer» C. Receipts and Payments A/c

Discussion

Explore topic-wise MCQs in 12th.

Which is the Principle of Capital Structure?

When Capital Redemption Reserve Account is opened ?

The need of capital budgeting in a firm arises on account of the

&quot;Capital budgeting as acquiring inputs with long run return&quot;. Who said?

&nbsp;The Financial Management is responsible for the

&nbsp;The Present Value of all inflows are cumulated in

If the annual cash inflows are constant, the pay-back period can be computed by clividing cash outlay by

Profit maximisation is

&nbsp;Which is the traditional method of Capital budgeting?

The significance of capital budgeting arises mainly due to the

Which is the determinants of Capital Structure?

Which method of capital budgeting called benefit cost ratio?

If the company announces dividend then it is necessary to pay it

&nbsp;Dividend is the portion of

Dividend is allocated to the shareholders of

&nbsp;Which is the function of finance as per John J. Hampton ?

Factoring involves

A sound dividend policy contains the ________ features.

Factoring is a

Capital Employed is

Which ratio explains that how much portion of earning is distributed in the form of dividend?

Financial planning starts with the preparation of

&nbsp;A company pays dividend at the

The dividend on equity shares is only paid when dividend on _____________has already been paid.

Which is not the form of dividend?

Dividend is Product of

Which type of function may be performed by the finance manager for management of profitability?

&nbsp;Dividend is given on

&nbsp;Which is the type of dividend?

Which is the form of dividend?

&nbsp;The Present values of total cash inflows should be compared with Present value of

&nbsp;Suppliers and creditors of a firm are interested in

Debt Equity Ratio is computed by

Degree of operating leverage can be computed by

Current Ratio can be computed by

The Gordon &#39;s model of dividend policy is based on

Price Ratio Method is

What is the advantage of &#39;NPV Method&#39;?

The relationship between the cost of equity and financial leverage in accordance with MM proposition II can be expressed by

Which one is the principle of capital structure?

In not-for-profit organisations, excess of expenditure over income is called&mdash;

In non-trading concerns, excess of income over expenditure is called&mdash;

Donation received for specific objective will be shown&mdash;

Income and Expenditure Account generally indicates&mdash;

Receipts and Payments Account usually indicates&mdash;

Income and Expenditure Account is prepared&mdash;

Income &amp; Expenditure A/c is a&mdash;

Receipts &amp; Payments A/c is a&mdash;

For non-trading organisation honorarium is&mdash;

Life membership fees received by Club is shown in&mdash;

"Capital budgeting as acquiring inputs with long run return". Who said?

The Financial Management is responsible for the

The Present Value of all inflows are cumulated in

Which is the traditional method of Capital budgeting?

Dividend is the portion of

Which is the function of finance as per John J. Hampton ?

A company pays dividend at the

Dividend is given on

Which is the type of dividend?

The Present values of total cash inflows should be compared with Present value of

Suppliers and creditors of a firm are interested in

The Gordon 's model of dividend policy is based on

What is the advantage of 'NPV Method'?

In not-for-profit organisations, excess of expenditure over income is called—

In non-trading concerns, excess of income over expenditure is called—

Donation received for specific objective will be shown—

Income and Expenditure Account generally indicates—

Receipts and Payments Account usually indicates—

Income and Expenditure Account is prepared—

Income & Expenditure A/c is a—

Receipts & Payments A/c is a—

For non-trading organisation honorarium is—

Life membership fees received by Club is shown in—