Started on Thursday, 6 May 2021, 8:52 PM

State Finished
Completed on Thursday, 6 May 2021, 9:33 PM
Time taken 41 mins 36 secs
Marks 28.00/30.00
Grade 93.33 out of 100.00
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Question 1

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The receivables turnover ratio is defined as

sales divided by receivables

none of these
 receivables divided by sales

receivables plus bad debt allowances

Question 2

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This analysis is usually used to understand operational performance of

the entity to help in making their business decisions.

Select one:

Internal Analysis
 External Analysis

Overall Analysis

External Audit

Question 3

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Total asset turnover, receivables turnover and inventory turnover

ratios measure

Select one:
 profitability

efficacy

efficiency

liquidity

Question 4

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 In this type of analysis you may compare figures from several years,
so you are comparing the amounts in each account from the past up to
the present.

Select one:

internal analysis

vertical analysis

external audit

horizontal analysis

Question 5

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Question text

Amazona company wants to increase its debt to total assets ratio,

which of the following activities could make this possible?

Select one:

Receive donation

Buy equipment for manufacturing purposes

Buy merchandise on account

Make a loan

Question 6
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Which is not a function of financial management?

Select one:

Acquiring Necessary Capital

Cash Management

Forecasting Financial Requirements

 Personnel Management

Question 7

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Its objective is to provide information about the

financial position and the financial performance and
cash flows of an entity that is useful to a wide range
of users in making economic decisions

Select one:

a.

Statement of Operational Performance

b.

Fund Flow Statement

c.
 Financial Statements

d.

Statement Corporate Taxes

Question 8

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Which statement is false

Select one:

With the help of strong financial control devices such as budgetary

control, ratio analysis and cost volume profit analysis, financial
management can improve the profitability position of the business
 Financial management is essential in the business especially in the
corporate sectors.

Effective financial management helps you promote and mobilize

individual and corporate savings

Financial decision will affect the entire business operation because

decisions have indirect relationship with the various department
functions.

Question 9

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 The Merriam Company has determined that its return on equity is 15
percent. Management is interested in the various components that
went into this calculation. You are given the following information:
(total debt)/(total assets) = 0.35 and total assets = 1,000,000. What is
the net income?

Select one:

a.

52,500

b.

428,571

c.

23,333

d.

97,500

Question 10

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The quick ratio is defined as:

Select one:

current assets divided by total debt

current assets divided by current liabilities

assets less inventory, divided by total liabilities

current assets less inventory, less prepaid expenses. The resulting

amount will then be divided by current liabilities
Question 11

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Company A’s ROE is 20 percent, while Company B’s ROE is 15

percent. Which of the following statements can be true?

Select one:

Company A and company B have equal amount of Assets 

Company A and Company B have equal amount of Equity.

Company A and Company B have the same amount of Liability.

  None of these

Question 12

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Lone Star Plastics has the following data:

Gross Sales 100,000
Gross profit margin 6.0% Tax rate 40%
What is Lone Star’s net income after taxes?

Select one:

3,600
 12,000

4,500

24,000

Question 13

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Fana’s American Bakery has a return on assets (ROA) of 10 percent

and a return on equity (ROE) of 14 percent. If total assets is 100,000,
what is the value of its total equity?

Select one:
 71,429

1,400,000

7,143

14,000

Question 14

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 Selzer Inc. has a net profit after taxes worth 62,195.  It has a total
assets worth 3 million, with a debt-to-equity ratio of 0.64. What is the
firm’s return on equity (ROE)? 

Select one:

3.4%

33.4%

71.0%

7.1%

Question 15

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All else being equal, which of the following will increase a company’s
current ratio?

Select one:

An increase in net fixed assets.

None of the statements can increase the current ratio

An increase in accounts receivable.

An increase in accounts payable.

Question 16
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Shepherd Enterprises has a debt-to-equity ratio of 40 percent.  The

company’s total assets is equal to Php 800 million. What is the value
of the company's total liabilities? 

Select one:

Php 2,400,000,000

Php 228,571,429

Php 458,428,472
 Php 320,000,000

Question 17

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Which statement is false

Select one:

Financial management is very important in the field of increasing the

wealth of the investors and the business.
 Savings are possible only when the business has higher expenses than
its revenues.

With the help of strong financial control devices such as budgetary

control, ratio analysis and cost volume profit analysis, financial
management can improve the profitability position of the business

The ultimate aim of most businesses is to achieve the maximum

amount of profit leading to the maximization of the wealth of the
investors.

Question 18

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Which of the following alternatives could potentially increase current

ratio?
 Select one:

Bought merchandise using cash available.

none of these

Retired damaged equipment.

Bought merchandise on account

Question 19

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 Question text

Which of the following can increase net profit margin?

Select one:

Sell merchandise with 20% mark-up from the original price

Sell merchandise with 20% discount

none of these

Buy merchandise

Question 20

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Question text

Fama’s French Bakery has a return on assets (ROA) of 10 percent and

a return on equity (ROE) of 14 percent. If equity is equal to 100,000.
What is the value of total assets?

Select one:

1,400

140,000

14,000

1,400,000

Question 21
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Identify what is being described.  The company had a net profit after
taxes worth Php 1,000,000.  The board and the management decided
not to distribute dividends to shareholders instead, it retained its
earnings for the year so that the business can have resources for future
use.

Select one:

Savings Promotion

Proper use of funds

Increasing the value of the firm

 Improvement of profitability 

Question 22

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Stennett Corp.’s CFO has proposed that the company made a new debt
and used the proceeds to buy equipment. Which of the following is
likely to occur if this proposal is adopted? 

Select one:

Return on Assets (ROA) will decline.

 Income will decline.

Gross profit margin will increase.

Inventory turnover will increase.

Question 23

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The current assets and current liabilities of FPL company is 25 and 25

respectively.  Reviewing the past transactions the company purchased
merchandise worth 5 and it was immediately paid.  However, it was
discovered that this transaction was mistakenly recorded as a purchase
on account.  After adjusting the errors, what is the the current ratio?

Select one:
 a.

0.75

b.

0.4

c.

d.

0.5

Question 24

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 FPL Company has cash and cash equivalents worth 10,000; equipment
worth 20,000; accounts receivable worth 15,000; notes receivable
worth 12,000 ; accounts payable worth 10,000 and notes payable
worth 5,000 maturing after one month.  What is the current ratio?

Select one:

1.67

2.47

2.5

3.7

Question 25

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Return on equity is directly affected by

Select one:

net income, number of shares and dividends

total assets and non-financial transactions

number of shares and liabilities and non-accountable transactions

net income and equity

Question 26

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Sexy Corporation’s current ratio is 0.5, while Coke Company’s current

ratio is 1.5. Both firms want to “window dress” their coming end-of-
year financial statements. As part of its window dressing strategy,
each firm will double its current liabilities by adding short-term debt
and placing the funds obtained in the cash account. Which of the
statements below best describes the actual results of these
transactions?

Select one:

The current ratios of both firms will be increased.

Only Sexy Corporation’s current ratio will be increased.

 The current ratios of both firms will be decreased.

The transactions will have no effect on the current ratios.

Question 27

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Identify the function being described: The board of directors and

finance manager decided to offer stocks to the public so that they can
have the resources for business expansion.

Select one:
 Increasing the value of the firm

Acquiring necessary capital

Interrelation with other departments

Savings Promotion

Question 28

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Which is not included in the group

 Select one:

Savings Promotion

Cash Management

Interrelation with Other Departments

Forecasting Financial Requirements

Question 29

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 Question text

Minden Co has current assets that consist of cash: 20,000, receivables:

70,000 and inventory: 90,000. Current liabilities are 75,000. The quick
ratio is 

Select one:

1.2

2.2

3.2

Question 30

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This is concerned with the acquisition, financing, and management of

assets with some overall goal in mind. Its decision function includes
areas such as investment, financing, and asset management decisions

Select one:

Financial Concern

Managerial Accounting

Financial Management
 Financial Accounting

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