AGARWAL VIDYA VIHAR ENGLISH MEDIUM COLLEGE

TYBCOM SEM-5 BUSINESS ADMINISTRATION

MCQ QUESTION BANK

UNIT-1; CHAPTER 1-FINANCIAL MANAGEMENT

Q1. Raising of adequate funds at the minimum cost & using them effectively in
business is called?
(A) Production management
(B) Financial management
(C) Human resource management
(D) Marketing management

Q2. Financial management is important for?

(A) Success of promotion
(B) Smooth running of enterprise
(C) Finance for expansion
(D) All of the above

Q3. Which of the following is an approach to finance function?

(A) Traditional approach
(B) Too wide approach
(C) Modern (practical) approach
(D) All of the above

Q4. Which approach to finance function is narrow and is concerned only with
raising of finance and ignores its effective utilisation?
(A) Traditional approach
(B) Modern approach
(C) Too Wide approach
(D) None of the above

Q5. Which of the following approach to finance function is the outsider-looking-

in approach & represents an episodic view of finance function?
(A) Traditional approach
(B) Modern approach
(C) Too Wide approach
(D) None of the above

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q6. The traditional approach concentrates mainly on the financial
administration of?
(A) Sole proprietorship
(B) Partnership firm
(C) Joint stock company
(D) Co-operative society

Q7. The traditional approach to finance function places emphasis on which

financial requirements?
(A) Long term
(B) Short term
(C) Medium term
(D) None of the above

Q8. Which approach to finance function is extensive, covers all transactions

connected with cash & is not practical?
(A) Traditional approach
(B) Modern approach
(C) Too Wide approach
(D) None of the above

Q8. A practical approach concerned with raising of funds and their effective
utilisation is called?
(A) Traditional approach
(B) Modern approach
(C) Too Wide approach
(D) None of the above

Q9. The modern approach to finance function lays stress on which financial
decisions?
(A) Investment decisions
(B) Financing decisions
(C) Dividend decisions
(D) All of the above

Q10. Which of the following is an executive finance function?

(A) Cash disbursements
(B) Supervision of bills
(C) Financial planning
(D) To prepare reports

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q11. Which of the following is an incidental finance function?
(A) Negotiation for obtaining funds
(B) Distribution of net profit
(C) Controlling financial performance
(D) Supervision over cash receipts

Q12. Which of the following is an importance of finance function?

(A) Increased tax burden
(B) Increased profit margins
(C) Increased expenditures
(D) Reduced research & development

UNIT-1; CHAPTER 2-FINANCIAL PLANNING

Q13. The process of estimating the fund requirements of a firm and determining
the sources of funds is called?
(A) Financial management
(B) Financial planning
(C) Human resource planning
(D) Capitalisation

Q14. Which of the following factors affect financial planning?

(A) Money market conditions
(B) Stability of earnings
(C) Nature of business
(D) All of the above

Q15. When existing management wants to retain control in their hands, they
will raise more funds through?
(A) Equity shares
(B) Preference shares
(C) Debentures
(D) Both (B) & (C)

Q16. When the rates of tax on company’s profits are very high, the company
prefer to issue?
(A) Equity shares
(B) Debentures
(C) Preference shares
(D) None of the above

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q17. Which is the correct order of the procedure of financial planning?
(A) Obtaining funds, estimating capital requirements, selecting proper source of
funds, determining financial objectives
(B) Determining financial objectives, estimating capital requirements,
selecting proper source of funds, obtaining funds
(C) Estimating capital requirements, determining financial objectives, selecting
proper source of funds, obtaining funds
(D) Selecting proper source of funds, obtaining funds, estimating capital
requirements, determining financial objectives.

Q18. Financial plan prepared for a period of five years or more is termed as?
(A) Long term Financial Plan
(B) Short term Financial Plan
(C) Overall Financial Plan
(D) All of the above

Q19. Financial plan prepared for a maximum period of one year is termed as?
(A) Short term financial plan
(B) Long term financial plan
(C) Overall financial plan
(D) None of these

Q20. On the occasion of promoting & starting a new company, a financial plan
framed covering all types of financial requirements is called?
(A) Short term financial plan
(B) Long term financial plan
(C) Overall financial plan
(D) None of these

Q21. Which of the following is NOT a guiding principle of sound financial

planning?
(A) Flexibility
(B) Liquidity
(C) Foresight
(D) Costly

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q22. Which of the following is a limitation of financial planning?
(A) Flexible attitude of management
(B) Efficient communication system
(C) Lack of coordination
(D) Accurate decision-making

UNIT-1; CHAPTER 3-CAPITALISATION

Q23. The total amount of a company’s capital or the total value of its capital
stock is called?
(A) Financial management
(B) Capitalisation
(C) Capital structure
(D) Working capital

Q24. Which of the theory of capitalisation is useful particularly to a newly

established company where the capitalisation is arrived at by totalling the cost
of fixed assets, regular working capital & the promotion expenses?
(A) Cost theory
(B) Earning theory
(C) Present market value of assets theory
(D) All of the above

Q25. In which of the theory of capitalisation, value of business is estimated on

the basis of the flow of its expected earnings?
(A) Cost theory
(B) Earning theory
(C) Present market value of assets theory
(D) All of the above

Q26. As per which theory, the present values of company’s existing assets are
determined & from the total market value of these assets, the total liabilities are
deducted?
(A) Cost theory
(B) Earning theory
(C) Present market value of assets theory
(D) All of the above

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q27. A situation in which the amount of capital is much more than the
requirements of business, it is called?
(A) Under capitalisation
(B) Over capitalisation
(C) Optimum capitalisation
(D) Imbalanced Capitalisation

Q28. When the real value of shares is less than its book value, the company is
said to be?
(A) Under capitalised
(B) Over capitalised
(C) Fully capitalised
(D) Not capitalised

Q29. In case of over-capitalisation, the real value is …………….than its book value?
(A) More
(B) Less
(C) Equal
(D) Higher

Q30. Which of the following is a cause of over-capitalisation?

(A) Promotion during depression
(B) Low promotional expenses
(C) Liberal dividend policy
(D) Defective financial plan

Q31. The effects of over-capitalisation can be examined on?

(A) Company
(B) Shareholders
(C) Society
(D) All of the above

Q32. Identify the remedy for over-capitalisation from the following:

(A) Reduction of share value
(B) Ploughing back of profits
(C) Reorganisation of capital structure
(D) All of the above

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q33. When the real value of shares is higher than its book value, the company
is said to be?
(A) Under capitalised
(B) Over capitalised
(C) Fully capitalised
(D) Not capitalised

Q34. Which of the following is a cause of under-capitalisation?

(A) Promotion during inflation
(B) Purchase of assets at high prices
(C) Conservative dividend policy
(D) Unexpected loss

Q35. The effects of under-capitalisation can be examined on?

(A) Company
(B) Shareholders
(C) Society
(D) All of the above

Q36. If at the time of establishment, total value of assets of the company is not
equal to share capital it has issued, the difference is known as?
(A) Capital
(B) Watered capital
(C) Over capital
(D) Under capital

UNIT-1; CHAPTER 4-CAPITAL STRUCTURE

Q37. The make-up of capitalisation i.e. the types of securities to be issued and
the relative proportion of each type of security is called?
(A) Capitalisation
(B) Capital structure
(C) Financial plan
(D) Financial management

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q38. Which of the following is one of the essential characteristics of an ideal
capital structure?
(A) Sound
(B) complicated
(C) Rigid
(D) Inconsistent

Q39. Which of the following factor affects capital structure?

(A) Capital requirement
(B) Retaining control
(C) Nature of assets of company
(D) All of the above

Q40. Which of the following type of capital structure is preferred when a

company’s business is risky and its earnings are highly unstable?
(A) With Equity shares only
(B) With Equity & Preference shares
(C) With Equity shares & Debentures
(D) With Equity shares, Preference shares & Debentures

Q41. Which of the following is the most economical & complicated pattern of
capital structure?
(A) With Equity shares only
(B) With Equity & Preference shares
(C) With Equity shares & Debentures
(D) With Equity shares, Preference shares & Debentures

Q42. An arrangement under which a company uses funds carrying fixed interest
or dividend in such a way as to increase the rate of return on equity shares is
known as?
(A) Trading on Equity
(B) Capital gearing
(C) Financial leverage
(D) All of the above

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q43. When the proportion of equity share capital is more than the proportion
of preference share capital & debentures it is known as?
(A) Trading on thin equity
(B) Trading on thick equity
(C) Trading on Debentures
(D) None of these

Q44. When the proportion of equity share capital is less than the proportion of
preference share capital & debentures it is known as?
(A) Trading on thin equity
(B) Trading on thick equity
(C) Trading on Debentures
(D) None of these

Q45. Which of the following is an advantage of trading on equity?

(A) Increased earnings per share
(B) Flexible capital structure
(C) Control maintained
(D) All of the above

UNIT-1; CHAPTER 5-WORKING CAPITAL

Q46. The funds invested in fixed or permanent assets is called?
(A) Working capital
(B) Fixed capital
(C) Business capital
(D) Variable capital

Q47. The capital invested in current assets is called?

(A) Working capital
(B) Floating capital
(C) Circulating capital
(D) All of the above

Q48. That part of working capital which is used to tide over some unforeseen
events such as strikes, natural calamities, sudden increase in demand is called?
(A) Seasonal working capital
(B) Special working capital
(C) Permanent working capital
(D) Variable working capital

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q49. The part of working capital which is required to meet the seasonal needs
of the business is?
(A) Initial working capital
(B) Regular working capital
(C) Seasonal working capital
(D) Special working capital

Q50. That part of working capital which is permanently locked up in current

assets is called?
(A) Permanent working capital
(B) Regular working capital
(C) Seasonal working capital
(D) Special working capital

Q51. The necessary funds to be supplied by the owners themselves in the initial
years is called?
(A) Permanent working capital
(B) Initial working capital
(C) Seasonal working capital
(D) Special working capital

Q52. The working capital required to continue the regular business operations
is called?
(A) Initial working capital
(B) Regular working capital
(C) Seasonal working capital
(D) Special working capital

Q53. That part of working capital which is required to meet the seasonal needs
as well as special needs of the business is called?
(A) Initial working capital
(B) Regular working capital
(C) Variable working capital
(D) Special working capital

Q54. Which of the following is a characteristic of working capital?

(A) Long-term needs
(B) Circular movement
(C) Risky
(D) Stagnant

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q55. Which of the following factor affects working capital requirements?
(A) Nature & volume of business
(B) Business fluctuations
(C) Length of manufacturing cycle
(D) All of the above

Q56. The time that elapses from the purchase & use of raw materials to the
production of finished goods is called?
(A) Marketing cycle
(B) Manufacturing cycle
(C) Distribution cycle
(D) Resource cycle

Q57. Which of the following is NOT the component of working capital?

(A) Cash/Bank
(B) Plant & Machinery
(C) Debtors/Receivables
(D) Inventory

Q58. Identify the motives for holding cash:

(A) Transactions motive
(B) Precautionary motive
(C) Speculative motive
(D) All of the above

Q59. What is the objective of maintaining receivables?

(A) To achieve growth in sales
(B) To increase profits
(C) To meet competition
(D) All of the above

Q60. Raw materials, finished goods, Work-in-progress, etc. are the types of?
(A) Cash
(B) Receivables
(C) Inventory
(D) None of these

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q61. A planned method to determine which items to purchase, how much to
purchase and how much to keep in stock so that the costs of purchase & storage
both are minimised without adversely affecting either production or sales is
called?
(A) Cash control
(B) Inventory control
(C) Receivables control
(D) None of them

Q62. Identify the functions of inventory control:

(A) Protection against uncertainties
(B) Continuous production for seasonal goods
(C) Getting quantity discounts
(D) All of the above

Q63. The cheapest and the most convenient method of securing working capital
is?
(A) Shares & debentures
(B) Commercial banks
(C) Retained profit earnings
(D) Cash credit

Q64. When a commercial bank makes an advance of fixed amount for a fixed
period, it is called?
(A) Loan
(B) Overdraft
(C) Cash credit
(D) None of these

Q65. To meet the temporary needs of fund of the business enterprises, the
commercial banks permit to overdraw their current accounts which is known
as?
(A) Loan
(B) Overdraft
(C) Cash credit
(D) None of these

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q66. A type of advance wherein banks permit their customers to borrow money
up to a particular limit is known as?
(A) Loan
(B) Overdraft
(C) Cash credit
(D) None of these

Q67. A short term promissory note sold by highly rated companies for their
working capital needs is called?
(A) Certificate of deposits
(B) Commercial paper
(C) Commercial bill
(D) Commercial banks

Q68. What from the following is true for commercial paper?

(A) Issued on discount & payable at face value
(B) Regulated by RBI
(C) Unsecured instrument
(D) All of the above

Q69. The receipts issued by banks acknowledging fixed deposits for a specific
period of time are called?
(A) Certificate of deposits
(B) Commercial paper
(C) Commercial bill
(D) Commercial banks

Q70. Under which source of working capital, to provide short term liquidity to
banks, the bills are rediscounted at the bank rate or at some specified rates?
(A) Certificate of deposits
(B) Commercial paper
(C) Commercial bills market
(D) Commercial banks

Q71. An outright sale of receivables of an organisation to a financial institution

called the 'factor' who specialises in the management of trade credit is called?
(A) Certificate of Deposits
(B) Factoring
(C) Trade creditors
(D) Commercial Paper

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q72. A credit granted by suppliers of raw materials or finished goods for a usual
duration of 30 to 90 days is called?
(A) Factoring
(B) Trade credit
(C) Commercial bills
(D) Public deposits

Q73. Deposits accepted directly from the members of the public for periods
varying from 6 months to 3 years at rates of interest ranging from 10 to 15 % is
called?
(A) Certificate of deposits
(B) Trade credit
(C) Commercial bills
(D) Public deposits

UNIT-2 SOCIAL RESPONSIBILITIES OF BUSINESS

Q74. An obligation of a business firm to manage the business so as to achieve
business objectives & to promote welfare of the society as a whole, keeping in
view the interests of various groups of the society is called?
(A) Social management
(B) Social Welfare
(C) Social responsibility
(D) Social interest

Q75. Which of the following is an argument for social responsibility of business?

(A) Profit maximisation
(B) Lack of social skills
(C) Recognition of human element
(D) Lack of accountability

Q76. Who from the following holds that interests of the individual coincides with
the interests of the society?
(A) Karl Marx
(B) Adam Smith
(C) Milton Friedman
(D) Peter Drucker

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q77. Which of the following is an argument against social responsibility of
business?
(A) Profit maximisation
(B) Growth of trade unions
(C) Development of education
(D) Threat of public regulation

78. Who from the following have opposed social responsibility & criticized the
involvement of business to social responsibility?
(A) Adam Smith
(B) Milton Friedman
(C) Peter Drucker
(D) Both (B) & (C)

Q79. Who is referred as “the king” in a market-based economy?

(A) Customers
(B) Employees
(C) Investors
(D) Community

Q80. To establish fair prices, prompt service, meet the needs, etc. is the
responsibility of the business towards?
(A) Customers
(B) Employees
(C) Shareholders
(D) State

Q81. The basic responsibilities towards consumers may be summed up in 5 R’s

that includes?
(A) Right quality
(B) Right quantity
(C) Right time
(D) All of the above

Q82. Fair remuneration, Job security, Proper working conditions, etc. is the
responsibility of the business towards?
(A) Customers
(B) Employees/Workers
(C) Shareholders
(D) State

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q83. To ensure safety of investment, highest long-term return, steady capital
appreciation, industrial democracy, etc. shows responsibilities of business
towards which interest group?
(A) Employees
(B) Customers
(C) Investors/Shareholders
(D) State

Q84. Developing healthy & co-operative relationships, fair trade practices

regarding prices, quality, delivery, payment & service is a social responsibility of
business towards?
(A) Customers
(B) Employees
(C) Inter-Business
(D) Investors

Q85. Helping the local civic administration, promote cultural enrichment, aiding
educational institutions, encourage sports, etc. is the social responsibility of
business towards?
(A) Customers
(B) Community
(C) Inter-Business
(D) Investors

Q86. Maintaining impartiality towards political affairs & observing all laws of
land is the responsibility of business towards?
(A) Customers
(B) Employees
(C) State
(D) Investors

Q87. Which of the following is NOT the social responsibility of the business?
(A) To provide Quality products
(B) To destroy the environment
(C) To generate the employment
(D) Fair trade practices

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
 UNIT-3; CHAPTER-1 OFFICE AND OFFICE MANAGEMENT
Q88. The place where clerical work & any other types of related activities are
performed is called?
(A) Office
(B) Department
(C) Organisation
(D) Enterprise

Q89. An office is also regarded as ……….. for an organisation?

(A) Brain
(B) Control center
(C) Memory center
(D) All of the above

Q90. The technique of planning, organising, coordinating & controlling office

activities with a view to achieve business objectives & is concerned with efficient
& effective performance of office work is?
(A) Office management
(B) Record keeping
(C) Filing
(D) Record management

Q91. Which of the following is an importance of office management?

(A) Interrupted flow of work
(B) Office inefficiency
(C) Optimum use of resources
(D) Maximisation of costs

Q92. Which of the following is a type of business mail?

(A) Incoming mail
(B) Outgoing mail
(C) Interdependent mail
(D) All of the above

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q93. The register that records all the particulars of the letters received to
maintain a permanent record is called?
(A) Outward mail register
(B) Inward mail register
(C) Outgoing mail register
(D) Register

UNIT-3; CHAPTER-2 MANAGEMENT OF RECORDS AND

FILING
Q94. Which of the following is an objective of record management?
(A) Decrease efficiency
(B) Improper decision making
(C) Facilitate comparison
(D) Lack of evidence

Q95. What is described as the core of record management?

(A) Filing
(B) Office
(C) Records
(D) Data

Q96. The process of arranging and storing records in such a way so that they can
be located easily when required is called?
(A) Office management
(B) Filing
(C) Record management
(D) Data processing

Q97. Hard disks were invented in the?

(A) 1940s
(B) 1950s
(C) 1960s
(D) 1970s

Q98. The main and usually target data storage device in a computer is?
(A) Hard disks
(B) Pen drive
(C) Optical disk storage
(D) Cloud storage
TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi
MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q99. A small portable memory card that plugs into a computer’s (laptop’s) USB
port and functions as a portable hard drive is called?
(A) Hard disks
(B) Pen drive
(C) Optical disk storage
(D) Cloud storage

Q100. The most commonly device used for storing music, video and data which
does not allow any modification or deletion of record images is?
(A) Hard disks
(B) Pen drive
(C) Optical disk storage
(D) Cloud storage

Q101. FULL FORMS:

CD-ROM – Compact Disc of Read Only Memory
DVD – Digital Versatile Disc
WORM Discs – Write Once Read Many Discs

Q102. A place other than personal computer that users can use to store their
data online is called?
(A) Hard disks
(B) Pen drive
(C) Cloud storage
(D) Memory card

Q103. The service introduced by Indian Government for keeping the physical
records in digital form is?
(A) Memory card
(B) Digital locker
(C) Cloud storage
(D) Pen drive

Q104. An electronic flash memory storage disk commonly used in consumer

electronic devices such as digital cameras, MP3 players, mobile phones and
other small portable devices is?
(A) Memory card
(B) Digital locker
(C) Cloud storage
(D) Pen drive

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q105. Which of the following is an advantage of computer data records?
(A) More paperwork
(B) Limited storage
(C) Well organised
(D) Late sorting

Q106. Which of the following is a disadvantage of computer data records?

(A) Security
(B) Problem of backup
(C) Useful for illiterate person
(D) Lifetime storage

Q107. One type of documentary file which includes text, images, etc. which can
be easily stored in the computer or laptop or other e-devices is?
(A) Word file
(B) System file
(C) Text file
(D) Multimedia file

Q108. Document files are also known as?

(A) System file
(B) Word file
(C) Data file
(D) Text file

Q109. Which type of E-file cannot be easily read & can be read with the help of
only computer software & computer technology?
(A) Document file
(B) Binary file
(C) Word file
(D) Master file

Q110. The file stored on magnetic disk is?

(A) Document file
(B) Disk file
(C) Word file
(D) Master file

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher
Q111. One kind of digital file system in which information or records can be read
only but no changes can take place is?
(A) Document file
(B) Binary file
(C) Read only file
(D) Master file

Q112. A permanent file and its use is on permanent basis is?

(A) Back-up file
(B) Master file
(C) Disk file
(D) Binary file

Q113. One kind of digital filing system in which information or records are stored
in the form of back up is?
(A) Back-up file
(B) Master file
(C) Disk file
(D) Binary file

Q114. A limitation of computerised filing is?

(A) Speed of access
(B) Portability
(C) Problem of data security
(D) Easy finding of information

ALL THE BEST

TYBCOM SEM-5 BUSINESS ADMINISTRATION Ms. Shivangi K. Sethi

MCQ QUESTION BANK Mcom, NET, GSET, PG Teacher