

MCQOPTIONS
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This section includes 80 Mcqs, each offering curated multiple-choice questions to sharpen your 12th knowledge and support exam preparation. Choose a topic below to get started.
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 | |
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 | |
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. | |
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 | |
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 | |
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 | |
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 | |
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. | |
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. | |
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. | |
11. |
Which is the determinants of Capital Structure? |
A. | Tax |
B. | Control |
C. | Government Policy |
D. | Requirement of Investors |
Answer» D. Requirement of Investors | |
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 | |
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. | |
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 | |
15. |
Dividend is allocated to the shareholders of |
A. | The Debtors |
B. | The Creditors |
C. | The Customer |
D. | The Company |
Answer» E. | |
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. | |
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. | |
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. | |
19. |
Factoring is a |
A. | Cost of Sales |
B. | Production Plan |
C. | Financial Planning |
D. | New Financial Service |
Answer» E. | |
20. |
Capital Employed is |
A. | Bank |
B. | Cash + Bank |
C. | Assets + Cash |
D. | Shareholders Funds + Long Term Funds |
Answer» E. | |
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 | |
22. |
Financial planning starts with the preparation of |
A. | Cash budget |
B. | Master budget |
C. | Balance sheet |
D. | None of the above |
Answer» E. | |
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 | |
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. | |
25. |
Which is not the form of dividend? |
A. | Stock |
B. | Regular |
C. | Property |
D. | Zero Dividend |
Answer» E. | |
26. |
Dividend is Product of |
A. | Productivity |
B. | Management |
C. | Dividend Policy |
D. | Plant and Machinery |
Answer» D. Plant and Machinery | |
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. | |
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) | |
29. |
Which is the type of dividend? |
A. | Interest |
B. | Cash Dividend |
C. | Flexible Capital |
D. | Profit cum-reserve |
Answer» C. Flexible Capital | |
30. |
Which is the form of dividend? |
A. | Cash dividend |
B. | Bond dividend |
C. | Stock dividend |
D. | All of these |
Answer» E. | |
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. | |
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 | |
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. | |
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 | |
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. | |
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. | |
37. |
Price Ratio Method is |
A. | Asset Method |
B. | Growth Method |
C. | Earning Yield Method |
D. | Dividend Yield Method |
Answer» D. Dividend Yield Method | |
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. | |
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 | |
40. |
Which one is the principle of capital structure? |
A. | Risk principle |
B. | Cost principle |
C. | Control principle |
D. | All of these |
Answer» E. | |
41. |
In not-for-profit organisations, excess of expenditure over income is called— |
A. | Loss |
B. | Profit |
C. | Deficit |
D. | Surplus |
Answer» D. Surplus | |
42. |
In non-trading concerns, excess of income over expenditure is called— |
A. | Profit |
B. | Surplus |
C. | Loss |
D. | Deficit |
Answer» C. Loss | |
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 | |
44. |
Income and Expenditure Account generally indicates— |
A. | Surplus/Deficit |
B. | Cash Balance |
C. | Capital Fund |
D. | Net Profit/Loss |
Answer» B. Cash Balance | |
45. |
Receipts and Payments Account usually indicates— |
A. | Surplus |
B. | Capital Fund |
C. | Debit Balance |
D. | Credit Balance |
Answer» D. Credit Balance | |
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 | |
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 | |
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 | |
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 | |
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 | |