MCQ With Answer Key 290323

Programme: M.
Com
SEM IV
Subject: Financial Management
Exam: First Half 2021
Module Q.No. Question Option 1 Option 2 Option 3 Option 4 Correct Option Difficulty Level Marks
1. Types of The Liquidity status of certificate of
Financing 1 deposit which is more negotiable is Certificate Liquidity Term Liquidity More Liquidity Less Liquidity More Liquidity Easy 1
consider as_________.
1. Types of The Certificate of Deposit which are
Financing 2 usually negotiable are issued by Banks Financial Market Stock Exchange Business Corporation Banks Average 1
__________.
1. Types of The types of Instruments whoever holds it,
Financing 3 gets the interest and principal amount is Term Insruments Interim Instruments Primary Instruments Bearer Instruments Bearer Instruments Moderate 1
classified as __________.
1. Types of The negotiable deposit certificate are
4 Secondary Market Primary Market Direct Market Indirect Market Secondary Market Difficult 1
Financing traded in ____________.
1. Types of In case of ‘Cash Credit’ advance Both the limit and the Limit is fixed but Both the limit and the
Drawing power is fixed but Limit is fixed but the
Financing 5 drawing power are the drawing power drawing power are Easy 1
limit is variable drawing power is variable
variable is variable Fixed
1. Types of Cash credit is allowed generally against Pledge or
Immovable Pledge or Hypothecation
Financing 6 Hypothecation of movable property Tangible security Average 1
property of goods
goods
1. Types of ___________ is not example of a
7 Bill of Lading Bills of exchange Railway Receits Dock Warrant Bills of exchange Moderate 1
Financing document of title is
1. Types of The term F.O.B. means
8 freight on board. free on board. free of baggage. freight off bins free on board. Difficult 1
Financing
1. Types of A seller or lessor has____________ title if questionable good-faith
9 void voidable voidable Easy 1
Financing the goods were obtained by fraud.
1. Types of A bill of exchange includes
10 An order to pay A request to pay A promise to pay A like to pay An order to pay Average 1
Financing
1. Types of What kind of acceptance is known as when Conditional
11 Qualified acceptance Blank acceptance General acceptance General acceptance Moderate 1
Financing the bill is accepted without any condition? acceptance
1. Types of Prem draws a bill on Shreyash for Rs.
Financing 3000. Prem endorsed it to Rudra. Rudra
12 Prem Kedar Shreyash Rudra Kedar Difficult 1
endorsed it to Kedar.The payee of the bill
will be
1. Types of Private company can accept deposits from
Financing its member or Directors upto not more
13 25 50 75 100 100 Easy 1
than________ % of its aggregate of paid-
up share Capital and free reserves
1. Types of Deposit can be accepted for a minimum of
Financing 14 6 months and maximum for 36 24 12 48 36 Average 1
_____________ months.
1. Types of Company can issue circular or
Financing advertisement for inviting deposits after
15 ___________ days of filing it with 21 30 7 14 30 Moderate 1
Registrar of Companies.
1. Types of in which of the following arrangement

Financing with the bank , a company does not
16 cash credit overdraft letter of credit pledge letter of credit Difficult 1
directly assume the risk of default by its
costomers
1. Types of if an amount of rs 50 crores is borrowed in the reserve bank of the
negotiation between negotiation between lender
Financing 17 the call money market then the interest rate the lender the borrower india as the amount Easy 1
lender and borrower and borrower
is decied by involved is huge
1. Types of which of the following is liability of a
18 treasury bills commercial paper certificate of deposits junk bonds certificate of deposits Average 1
Financing bank
1. Types of
19 Equity capital is known as _____ capital. Creditors Owners Risk Borrowed Risk Moderate 1
Financing
1. Types of
20 Equity shareholders are last _____. Tax benefit No tax benefit claimants Tax payers claimants Difficult 1
Financing
1. Types of
21 Debentures may be convertible into _____. Employees Equity shares Equity shareholders Public Deposits Equity shares Easy 1
Financing
1. Types of Preference Share
22 Bonus shares are given to _____ _____. Equity shareholders Tax benefit Debenture Holders Equity shareholders Average 1
Financing Holders
1. Types of Preference
23 Sweat equity shares are allotted to _____. Employees Dividend owners Employees Moderate 1
Financing shareholders
1. Types of
24 Trade credit is on _____ basis. Employees continuous Appreciation installment continuous Difficult 1
Financing
1. Types of In _____ credit interest is charged on
25 Dividend cash Liquidity loan cash Easy 1
Financing amount actually withdrawn.
1. Types of
26 _____ _____ is converting bill into cash. Preference shares issue Debentures issued Bill Discounting Advances Bill Discounting Average 1
Financing
1. Types of Commercial paper is for ` _____ or in
27 2 lakhs 3 lakhs 5 lakhs 4 lakhs 5 lakhs Moderate 1
Financing multiple of it.
1. Types of
28 _____ is paid out of profit. Liquidity Appreciation Dividend Interest Dividend Difficult 1
Financing
1. Types of
29 _____ is paid out of income. Interest Liquidity Appreciation Appropriation Interest Easy 1
Financing
1. Types of The period of credit in commercial paper
30 7 days to 1 year 14 days to 1 year 7 days to 2 year 5 days to 1 year 7 days to 1 year Average 1
Financing is _____ days to _____ year.
1. Types of _____ overdraft is given to those
31 clean status reduced Extra clean Moderate 1
Financing customers who are having good reputation.
1. Types of
32 _____ is a document of title of goods. R/R P&M Debentures L&B R/R Difficult 1
Financing
1. Types of The person who are in _____ tax bracket
33 lower higher status neutral higher Easy 1
Financing prefers to invest in fax saving securities.
1. Types of _____ is growth in the value of
34 Dividend Appreciation continuous Depreciation Appreciation Average 1
Financing investment.
1. Types of
35 _____ means convertibility into cash. reduces Liquidity Interest Flexibility Liquidity Moderate 1
Financing
1. Types of Investment in immovable property is for
36 Appreciation status Liquidity Stability status Difficult 1
Financing _____.
1. Types of Payment of life insurance premium _____
37 Liquidity reduces Dividend increases reduces Easy 1
Financing tax liability
1. Types of The security on which the rate of dividend
38 Equity shares Preference shares Debentures Public Deposits Equity shares Average 1
Financing is not fixed is
1. Types of
39 The security which is last claimant is Equity shares Preference shares Debentures Public Deposits Equity shares Moderate 1
Financing
1. Types of Following is not a fixed income bearing
40 Equity shares Preference shares Debentures Public deposits Equity shares Difficult 1
Financing security.
1. Types of The rate of dividend on preference share
41 fixed fluctuating Variablr Zero fixed Easy 1
Financing capital is
1. Types of
42 Dividend on share capital has Tax benefit No tax benefit Tax liability Asset No tax benefit Average 1
Financing
Programme: M.Com
SEM IV
1. Types of
43 The security which has controlling right is Preference shares Debentures Equity Shares Public Deposits Equity Shares Moderate 1
Financing
1. Types of Public Deposits can be accepted for a
44 3 years 2 years 5 years 10 years 3 years Difficult 1
Financing maximum period of
1. Types of
45 Private equity funds provide finance for 3 to 8 years 10 to 15 years 15 to 20 years 20 to 25 years 3 to 8 years Easy 1
Financing
1. Types of The Angels keep their investment in the
46 5 to 10 years 10 to 12 years 12 to 18 years 20 to 25 years 5 to 10 years Average 1
Financing company for
1. Types of
47 Following is a liability of a bank Certificate of deposits Treasury Bills Commercial papers Junk Bonds Certificate of deposits Moderate 1
Financing
1. Types of The type of collateral security used for
48 Inventory Property P&M Debentures Inventory Difficult 1
Financing short term loans is
1. Types of Following is not a spontaneous source of
49 Provision for dividend Trade credit Outstanding expenses Bill Payable Provision for dividend Easy 1
Financing short term finance.
1. Types of
50 Insurance is provided in respect of Public Deposit Debentures Term loans Trade credit Public Deposit Average 1
Financing
2. Investment Capital budgeting is a part of working capital
51 capital structure marketing decision investment decision investment Decision Easy 1
Decision ____________. management
2. Investment ___________________is not used in
52 Time Value of Money Net Assets Method Sensitivity Analysis Cash Flows Net Assets Method Average 1
Decision Capital budgeting.
2. Investment long-term
short-term investment medium-term investment Long-term investment
Decision 53 Capital budgeting deals investment dividend decisions Moderate 1
decisions decisions decisions
with____________ decisions
2. Investment
54 reversible unimportant irreversible unplanned irreversible Average 1
Decision Capital budgeting decisions are _______.
2. Investment _______________ is not incorporated in Required Rate of
55 Tax-Effect Time Value of Money Rate of Cash Discount Rate of Cash Discount Moderate 1
Decision capital budgeting. Return
2. Investment ____________________ is not a capital Merger of Plant
56 Inventory level Replacement of an asset Expansion programme Inventory level Easy 1
Decision budgeting decision. capacity
2. Investment A sound capital budgeting technique is
57 accounting profits cash flows interest rate on borrowings book profits cash flows Average 1
Decision based on____________.
2. Investment ________________ is a relevant cost in Allocated
58 Sunk Cost Opportunity Cost Retrospective Cost Opportunity Cost Difficult 1
Decision capital budgeting. Overheads
2. Investment ____________ decisions are based on working capital
59 capital structure marketing decision investment decision investment Decision Difficult 1
Decision incremental cash flows. management
2. Investment ____________ has no effect on project
60 Salvage value Changes in tax rate depreciation amount Rate of cash discount Rate of cash discount Easy 1
Decision cash flows.
2. Investment Cash inflows from a project After-tax operating
61 Cash outflows Capital outlays Cash expenditure After-tax operating profits Average 1
Decision include____________. profits
2. Investment ____________________is not followed in
62 Cash flows principle Accrual principle Interest exclusion principle Post-tax principle Accrual principle Easy 1
Decision capital budgeting.
2. Investment Depreciation is incorporated in cash flows involves an cash
63 is an unavoidable cost reduces tax liability is a liability reduces tax liability Moderate 1
Decision because it _________________. outflow
2. Investment All costs and
All accrued costs and All cash flows be
Decision benefits are All benefits are measured All accrued costs and
64 revenues be calculated in Difficult 1
______________ is not applied in capital measured on cash on after-tax basis revenues be incorporated
incorporated incremental terms
budgeting. basis
2. Investment Evaluation of capital budgeting proposals
Cash flows are Cash flows are Cash flows are more Cash flows are Cash flows are more
Decision 65 is based on cash flows because Average 1
impossible to calculate suggested by SEBI important than book profit suggested by RBI important than book profit
_____________.
2. Investment ________________ is not included in
66 Opportunity Cost Sunk Cost Change in Working Capital Economic cost Sunk Cost Moderate 1
Decision incremental cash flows.
2. Investment A proposal is not a capital budgeting is related to fixed brings short-term involves large capital brings short-term benefits
67 brings long-term benefits Average 1
Decision proposal if it____________. assets benefits only investment only
2. Investment In capital budgeting, sunk cost is excluded
68 of small amount relevant not incremental reversible not incremental Moderate 1
Decision because it is ________.
2. Investment Savings in respect of a cost is treated in
69 an Inflow an Outlay an Outflow being totally ignored an Inflow Average 1
Decision capital budgeting as _______.
2. Investment that limited funds that no fresh investment
that no retained that no external funds can that limited funds are
Decision 70 In capital budgeting, the term Capital are available for is required in current Moderate 1
earnings are available be raised available for investment
rationing implies_________. investment year
2. Investment implicitly assumes that implicitly assumes that the
implicitly assumes that the
Decision A weakness of the internal rate of return the firm is able to firm is able to reinvest
does not consider the is expressed as firm is able to reinvest
71 (IRR) approach for determining the reinvest project cash project cash flows at the Difficult 1
time value of money percentage project cash flows at the
acceptability of investments is that it flows at the project's project's internal rate of
firm's cost of capital
_______________. internal rate of return return
2. Investment a project takes to pay
over which the project
Decision back the loan taken to equal to the useful a project takes to recover a project takes to recover
72 will be getting operating Average 1
The payback period is the purchase the capital life of the machines its initial cash outflow its initial cash outflow
cash outflows
period_______________________. assets.
2. Investment PV of cash inflows PV of cash inflows PV of cash inflows PV of cash inflows
PV of cash inflows divided
Decision 73 Profitability Index is calculated as , Less Cost of Plus PV of cash multiply by PV of cash divided by PV of cash Moderate 1
by PV of cash outflows
__________________________. Investment outflows outflows outflows
2. Investment ___________________ methods can be
Decision 74 used for evaluating capital budget Ratio Analysis Common-size NPV Trend Analysis NPV Easy 1
decisions.
2. Investment The number of years taken by a project to
Decision 75 recover the initial investment is payback period investment period profit period project period payback period Average 1
called_____ .
2. Investment In payback period method, the annual cash Net income before Net income before Net income after tax and Net income before
76 Net income after tax Moderate 1
Decision inflow means_____. tax depreciation but after tax depreciation depreciation but after tax
2. Investment In payback period method, the project
gives highest tax
Decision 77 which________ to cover cost of takes short period takes very long period is having longer life takes short period Average 1
liability
investment is accepted for investment.
2. Investment NPV stands for
78 New Present Value Net Present Value Net Project Value Net Profit Value Net Present Value Easy 1
Decision _________________________.
2. Investment Under _______ , if the present value of
Decision future cash flow is higher than the initial Discounted Pay Internal rate of return
79 Payback period method Net Present Value method Net Present Value method Average 1
cash outlay; the project is selected Back method method
otherwise rejected.
2. Investment Salvage value of fixed Salvage value of fixed
Decision Excess of book Working capital assets less any income assets less any income tax
Excess of salvage
80 value over salvage requirement in the first tax payable on the payable on the excess of Difficult 1
value over book value
Net salvage value of fixed assets is equal value year excess of salvage value salvage value over book
to _______. over book value value
2. Investment The IRR is the same as discount rate at which NPV discount rate at which
81 ARR Payback period NPV Moderate 1
Decision ___________________. is zero NPV is Zero
2. Investment The project with positive Net Present
82 accepted rejected indifference ignored accepted Easy 1
Decision Value is_______.
Programme: M.Com
SEM IV
2. Investment The project with negative Net Present
83 accepted rejected indifference considered rejected Easy 1
Decision Value is_______.
2. Investment The project with the ___________payback
84 longer shorter lengthy protracted shorter Easy 1
Decision period should be considered.
2. Investment Capital budgeting decisions involves
85 greater risk limited risk no risk risk free greater risk Easy 1
Decision _________.
2. Investment The project having Profitability Index
86 greater than 1 less than 1 zero negative greater than 1 Easy 1
Decision _________should be accepted.
2. Investment The project having Profitability Index
87 greater than 1 less than 1 greater than 2 greater than 3 less than 1 Easy 1
Decision _________should be rejected.
2. Investment Profitability Index is also called the
88 Benefit-Cost ratio Gross Profit ratio Net Profit ratio Pay-Back ratio Benefit-cost ratio Average 1
Decision _______________________.
2. Investment IRR stands for Investment Rate of Internal Rate of
89 Increasing Rate of Return Interest rate of Return Internal Rate of Return Average 1
Decision _______________________. Return Return
2. Investment Cash inflows for capital budgeting Accounting Profit - Accounting Profit - Accounting Profit + Accounting Profit - Tax Accounting Profit - Tax +
90 Moderate 1
Decision decisions mean ___________________. Depreciation + Tax Depreciation - Tax Depreciation - Tax + Depreciation Depreciation
2. Investment Cost of Assets (+)
Cost of Assets (+)
Decision Installation Cost of Assets (+) Cost of Assets (-) Cost of Assets (+)
Installation expenses (-
91 expenses (+) Installation expenses (+) Installation expenses (-) Installation expenses (+) Difficult 1
)Salvage ( - )Working
Initial cash outflows includes Salvage (+) Working Capital Working Capital Working Capital
Capital
___________________. Working Capital
2. Investment Under capital rationing situation, the
Accounting Rate of Profitability Index Discounted Pay Back
Decision 92 method used to rank the indivisible Payback period method Profitability Index Method Moderate 1
Return Method Method method
projects are _______.
2. Investment Capital budgeting decisions are useful in
93 project evalution raising of funds paying taxes paying dividends project evalution Average 1
Decision case of ________________.
2. Investment A firms decision to buy semi-automatic
Decision 94 machine or fully automatic machine is an Expansion Diversification Mutually exclusive Development Mutually exclusive Average 1
example of ___________ project.
2. Investment In the last year of the project, salvage
Decision 95 value recovered of machine is added deducted multiply ignored added Easy 1
____________to cash inflows.
2. Investment In the last year of the project, recovery of
Decision 96 working capital is ____________ to cash deducted added multiply ignored added Easy 1
inflows.
2. Investment In the first year of the project, salvage
Decision value of machine is ____________ from
97 added deducted multiply ignored deducted Average 1
the cost of machine for calculating
depreciation.
2. Investment In the first year of the project, investment
Decision 98 in working capital is ______ to capital added deducted multiply ignored added Average 1
outlays.
2. Investment Depreciation cost is a
99 cash cost cash expense non-cash cost cash outflow non-cash cost Easy 1
Decision ___________________.
2. Investment Under Straight line method, depreciation is
Decision 100 charged on __________ of the fixed original cost reducing balance WDV diminishing balance original cost Average 1
assets.
2. Investment A project which is expected to generate
Decision cash inflows of Rs. 5,000 each for next
101 five years, if the cost of the project is Rs. 2 years 2.5 years 3.5 years 4 years 2.5 years Difficult 1
12,500 then the payback period for the
project is _____________.
2. Investment A project has Rs. 4,00,000 as cost of
Decision investment and it generates the following
cash inflows over its five years' life - i.e.
102 2 years 2.5 years 3 years 3.5 years 3 years Difficult 1
Rs.1,25,000 , Rs.1,40,000 , Rs. 1,35,000 ,
Rs.1,20,000 and Rs.1,25,000 respectively.
The payback period is ________.
2. Investment A project having cost Rs.2,00,000 and its
Decision Present Value (PV) of cash inflows is Rs.
103 -60,000 4,60,000 2,60,000 60,000 60,000 Difficult 1
2,60,000 then the Net Present Value is Rs.
_________.
2. Investment A project having cost Rs.3,00,000 and its
Decision Present Value (PV) of cash inflows is Rs.
104 -40,000 40,000 5,60,000 2,60,000 -40,000 Difficult 1
2,60,000 then the Net Present Value is Rs.
_________.
2. Investment ___________ shows how much present
Accounting Rate of Profitability Index Discounted Pay Back
Decision 105 value of cash inflows is generated for Payback period method Profitability Index Method Difficult 1
Return Method Method method
every one rupee invested.
2. Investment A project which is expected to generate
Decision cash inflows of Rs. 10,000 each for next
106 five years, if the cost of the project is Rs. 0.67 1.33 1.67 1.87 1.67 Difficult 1
6,000 then Profitability Index for the
project is ________.
2. Investment ___________is a part of investment Working capital
107 Capital budgeting Marketing Management Capital Structure Capital budgeting Easy 1
Decision decision. Management
2. Investment Decision criterion with respect to Profitability index is Profitability index Profitability index is equal Profitability index is Profitability index is
108 Average 1
Decision profitability index to accept project if? equal to or less than 1 is greater than 1 to 1 less than 1 greater than 1
2. Investment __________ requires additional funds to
Decision invest in fixed assets to expand the
Research and
109 production facilities in the view of the Diversification Replacement Expansion Expansion Moderate 1
Development
increase in demand for their product in
near future.
2. Investment All else equal
All else equal project's
Decision Assume that a project has normal cash All else equal project's project's NPV All else equal project's All else equal project's
MIRR is unaffected by
110 flows that is negative intial cash flow and IRR increases as the increases as the MIRR is unaffected by NPV increases as the cost Difficult 1
increase in cost of
all are cashflows are positive. Which of cost of capital declines cost of capital changes in cost of capital of capital declines
capital
the following statement is most correct? declines
2. Investment Process that involves decision making with Material management
111 Valuation Breakeven analysis Capital budgeting Capital budgeting Easy 1
Decision respect to investment in fixed asset? decision
2. Investment If you have to judge a project from its
NPV cannot judge Information is not
Decision 112 NPV, you will select the one with Lowest NPV Highest NPV Highest NPV Average 1
the project enough
the______________?
2. Investment Capital Budgeting decision are based on
113 Decremental Assets Incremental Assets Incremental cash flow Incremental profit Incremental cash flow Moderate 1
Decision ___________.
Programme: M.Com
SEM IV
2. Investment The NPV method The NPV method
Decision assumes that cash assumes that cash The NPV method assumes The NPV method assumes
flows will be flows will be that cash flows will be that cash flows will be
The NPV method does
reinvested at cost of reinvested at risk reinvested at cost of reinvested at cost of
114 not consider the Difficult 1
capital, while IRRfree rate, while IRR capital, while IRR method, capital, while IRR method,
inflation premium
method, assumes method, assumes assumes reinvestment at assumes reinvestment at
Which of the following statement is most reinvestment at the reinvestment at the risk free rate the IRR
correct ? IRR IRR
2. Investment Highest payback
115 Lower payback period Normal payback period Average payback period Lower payback period Easy 1
Decision Projects with __________ are preferred. period
2. Investment Criteria that measures how quickly project Accounting of Average
116 Payback period Benefit - cost ratio Internal Rate of Return Payback period Average 1
Decision will return its original investment is? Rate of Return
2. Investment That limited funds That no fresh
That no retained That no external funds can That limited funds are
Decision 117 In capital budgeting, the term Capital are available for investment is required in Moderate 1
earnings available be raised available for investment
Rationing implies: investment current year
2. Investment The cash flow are
Decision extended over a The cash flow are
You have determined the profitability of a longer period of extended over a longer
The discount rate The discount rate
118 planned project by finding the present time but the The discount rate decreases period of time but the Difficult 1
increases decreases
value of all cash flows from that project to amount of the cash amount of the cash flow
look more appealing in terms of present flow remains the and rate remains same
value of those cash flows? same
2. Investment Long term investment decision is also Working capital Marketing
119 Capital Structure Capital budgeting Capital budgeting Easy 1
Decision known as _____________ Management Management
2. Investment Which of the following does not effect Depreciation Method of Project Method of Project
120 Salvage Value Tax Rate Change Average 1
Decision cash flows proposal? Amount Financing Financing
2. Investment Two mutually exclusive projects with
Equivalent Annuity
Decision 121 different economic lives can be compared Internal Rate of Return Profitability Index Net Present Value Equivalent Annuity Value Moderate 1
Value
on the basis of
2. Investment When cost of capital of a project is equal The NPV will be Benefit cost ratio will be
122 The NPV will be zero The NPV will be negative The NPV will be zero Difficult 1
Decision to its IRR __________ positive zero
2. Investment NPV of project W, X, Y & Z is [ Rs. 5,000
Decision ], Rs. 38,000, Rs. 40,000 and Rs. 32,000
123 W X Y Z W Easy 1
respectively. The project which is to be
rejected ____________.
2. Investment Which element of the basic NPV equation No fraction for
124 Denominator Numerator Fraction Denominator Average 1
Decision is adjusted by the RADR? calculation
2. Investment Requirement of Working capital in capital
125 Cash Outflow Cash Inflow Cost of Capital Not Accounted Cash Outflow Moderate 1
Decision budegeting is treated as _________.
2. Investment The following is not a Discounted cash Internal Rate of Accounting of Average Accounting of Average
126 Net Present Value Profitability Index Difficult 1
Decision flow technique: Return Rate of Return Rate of Return
2. Investment __________ is not a feature of Capital
127 Reversible Irreversible Important Planned Reversible Easy 1
Decision Budgeting Decisions.
2. Investment With limited finance and a number of
Internal rate of
Decision project proposals at hand, select that The maximum net Profitability index is The maximum payback The maximum net present
128 return is greater Average 1
package of projects which present value greater than unity period value
than cost of capital
has___________
2. Investment ___________ method doesnot take into
Accounting of Average
Decision 129 account the profit of the entire life of the Net Present Value Payback period Profitability Index Payback period Moderate 1
Rate of Return
project?
2. Investment Which of the following variables is not
130 Initial Cash Flows Discount Rate Terminal Inflows Life of the Project Life of the Project Difficult 1
Decision known in Internal Rate of Return ?
2. Investment Expected Value of Cashflow, EVCF Most likely Arithmetic Average Geometric Average
131 Certain to occur Most likely Cashflows Easy 1
Decision is___________. Cashflows Cashflow Cashflow
2. Investment In Certainty-equivalent approach, adjusted Accounting of Average Internal Rate of
132 Hurdle Rate risk free rate risk free rate Average 1
Decision cash flows are discounted at _________. Rate of Return Return
2. Investment Discounted cash flow criteria for
Discounted Pay Accounting of Average Accounting of Average
Decision 133 investment appraisal do not Net Present Value Internal Rate of Return Moderate 1
Back method Rate of Return Rate of Return
include_______
2. Investment According to Charles T. Horngreen,
Decision defined capital budgeting as " Long term making proposed financing proposed making and financing checking financing making and financing
134 Difficult 1
planning for capital outlay capital outlay proposed capital outlay proposed capital inflows proposed capital outlay
_________________________________ "
2. Investment Risk in Capital budgeting is similar to Uncertainty of Cash Probability of Cash Variability of Cash
135 Certainty of Cash flows Variability of Cash flows Easy 1
Decision _________________. flows flows flows
2. Investment Which of the following capital budgeting
Decision techniques takes into account the Accounting of Average Accounting of Average
136 Net Present Value Payback period Profitability Index Average 1
incremental accounting income rather than Rate of Return Rate of Return
cash flows ____________.
2. Investment The IRR (internal rate of return) method is not shown as a ignores the size of always provides only one is based on accounting ignores the size of each of
137 Moderate 1
Decision used to compare two investment projects: percentage each of the projects IRR for each project profits the projects
2. Investment _________method considers time value of
Accounting of Average
Decision 138 money for taking capital budgeting Net Present Value Payback Period Recoupment period Net Present Value Difficult 1
Rate of Return
decisions.
2. Investment Which of the following techniques does
Simple Payback Discounted Payback
Decision 139 not take into account the time value of Net Present Value Internal Rate of Return Simple Payback Period Easy 1
Period Period
money?
2. Investment The difference between the present value
Decision of cash inflows and the present value of net present value of the net future value of net salvage value of the net historical value of net present value of the
140 Average 1
cash outflows associated with a project is project the project project the project project
known as_________
2. Investment Future Value of
Decision Scrap Value and Cash Cash Inflow and Present Value of cash Scrap Value and Cash Present Value of cash
141 Moderate 1
Profitability Index shows proportion Inflow Present Value of Inflow and Outflow Outflow Inflow and Outflow
between _____ and _____. cash Outflow
2. Investment PV of cash inflow of a project is Rs.
Decision 142 2,40,000 and investment is Rs. 2,00,000. 2 8.33 1.67 1.2 1.2 Difficult 1
The PI is ____________
2. Investment the time required to the time required to the time required to
the time required to the time required to pay to
Decision 143 Payback period takes into consideration recover the original receive money from recover the original Easy 1
depreciate asset creditor
____________________ investment debtor investment
2. Investment The capital budgeting method which uses
144 payback ARR NPV IRR ARR Average 1
Decision accrual accounting _____________
2. Investment The capital budgeting method which does
Decision 145 not consider investments profitability payback ARR NPV IRR payback Moderate 1
is___________
Programme: M.Com
SEM IV
2. Investment LMN. Ltd. is considering acquiring a
Decision plant. The purchase price is Rs. 12,00,150.
The company believes that the net cash
146 inflow of Rs. 2,00,025 will be generated 4 years 2 years 3 years 6 years 6 years Difficult 1
every year. The plant will have to be
replaced in eight years. The payback
period is ____________
2. Investment If present value of cash outflow is equal to
Decision 147 present value of cash inflow, the net positive negative zero one zero Easy 1
present value will be ____________
2. Investment If present value of total cash outflow is Rs.
Decision 15,000 and present value of total cash
148 Rs. 1000 [ Rs. 1000 ] Nil Rs. 2000 [ Rs. 1000 ] Average 1
inflow is Rs.14,000, what is the NPV of
the project?
2. Investment NPV of project W, X, Y & Z is Rs.
Decision 25,000, Rs. 38,000, Rs. 40,000 and Rs.
149 W X Y Z Y Moderate 1
32,000 respectively. The most profitable
project is ____________
2. Investment Capital budgeting
Capital budgeting Business expansion Sunk cost is revalant Sunk cost is revalant cost
Decision decision affect the
150 decision are decision in a capital cost considering capital considering capital Difficult 1
Which of the following statement is not future stability of
irreversible expenditure decision budgeting budgeting
true for capital budgeting? the firm
2. Investment A project whose acceptance prevents the
an independent a mutually exclusive a mutually exclusive
Decision 151 acceptance of another project is known a dependent project a rational project Average 1
project project project
as__________
2. Investment A project whose acceptance requires the
an independent
Decision 152 acceptance of another project is known as a dependent project an essential project a rational project a dependent project Easy 1
project
_____________.
2. Investment A project costs Rs. 16,000.The estimated
Decision annual cash inflows during its 3 year life
153 are Rs. 6,000, Rs. 7,000 and Rs. 6,000 2 years 3 years 2.5 years 3.5 years 2.5 years Moderate 1
respectively. What will be the pay-back
period?
2. Investment Cash flows and Net present value
Average rate of return Cash flow are profit before Average rate of return is
Decision 154 Which of the following statement is false accounting profit method is based on cash Difficult 1
is based on cash flow depreciation but after tax based on cash flow
for capital budgeting? are same flow
2. Investment Which of the following is not considered Acquisition of long Replacement of an existing
155 Expansion programme Inventory control Inventory control Difficult 1
Decision in capital budgeting decision? term assets asset
2. Investment an investment
an investment decision
Decision decision first an investment decision
first determines what
investment decisions determines what a financing decision first first determines what
assets the firm will
relate to assets that the assets the firm will determines what financial assets the firm will invest
invest in, while a
firm has invested in, invest in, while a assets the firm will invest in, while a financing
156 financing decision Difficult 1
while financing financing decision in, while an investment decision considers how the
considers how the
decisions relate to the considers if the decision considers how the investments under
investments under
firm's financial assets. existing funds will be invested consideration are to be
consideration are to be
An investment decision differs from a investments should funded.
funded.
financing decision in that: be refinanced.
2. Investment For a Project LM the intial investment was
Decision Rs. 100000 where as the Net Present
157 1.1 0.91 0.1 1 1.1 Difficult 1
Value was Rs. 10000? You are required to
calculate the profitability Index.
2. Investment If the initial outlay of the project is Rs.
Decision 10000 and the total of discounted inflows
158 is Rs. 12938 wheres if discounting factor Rs. 2938 Rs. 5000 Rs. 12938 Rs. 15000 Rs. 2938 Moderate 1
is not considered the inflow amounts to
Rs. 15000. Find NPV.
2. Investment A project costs Rs. 24,000.The estimated
Decision annual cash inflows during its 4 year life
159 2 years 4 years 3 years 3.5 years 3 years Difficult 1
are Rs. 8,000 each year. What will be the
pay-back period?
2. Investment An average investment of a project costs
Decision Rs. 2,00,000.The estimated annual profit
160 for 2 years are Rs. 20,000 and Rs. 30,000 12% 12.50% 25% 10% 12.50% Difficult 1
respectively. What will be the Accounting
of Average Rate of Return ?
3. Management of ______ is excess of current assets over
161 Working capital Fixed capital Quick assets Quick liabilities Working capital Easy 1
Working Capital current liabilities
3. Management of Amount of working capital ______ with
162 Remains constant Increases Decreases does not affect Increases Average 1
Working Capital increase in current assets
163 Remains constant Increases Decreases does not affect Increases Average 1
Working Capital decrease in current liabilities
3. Management of Working capital calculated on the basis of Seasonal working Cash Working Balance sheet working Permanent working
164 Cash Working Capital Average 1
Working Capital cash cost is called as ______. capital Capital capital capital
3. Management of Long operating cycle needs
165 Higher Lower Constant fluctuating Higher Moderate 1
Working Capital ______working capital
3. Management of Long credit period for debtors
166 Decreases Increases Does not affect sometimes affect Increases Moderate 1
Working Capital _______working capital requirements.
3. Management of Delay in payment of expenses
167 Decreases Increases Does not affect sometimes affect Decreases Moderate 1
Working Capital ______working capital requirements.
3. Management of Large organisation needs ______working
168 Higher Lower Constant fluctuating Higher Average 1
Working Capital capital as compared to small organisation.
3. Management of ______is a source of working capital.
169 Mortgage loan Trade credit Term loan Equity capital Trade credit Moderate 1
Working Capital
3. Management of Current assets Rs.6,00,000. Current
Working Capital liabilities Rs.2,00,000. Margin of safety at
170 640000 440000 660000 460000 460000 Difficult 1
10% on Gross current assets. Working
capital will be Rs. ________.
3. Management of ______ is the ability of converting an
171 Efficiency Profitability Liquidity Leveraging Liquidity Easy 1
Working Capital investment into cash.
3. Management of In cash management, CD stands for _____. Certificate of Corporation for
172 Compact Disk Corporate Deposit Certificate of Deposit Average 1
Working Capital Deposit Deposits
3. Management of Maximum maturity period for commercial
173 91 days 6 months 1 year 3 years 1 year Average 1
Working Capital paper is ______.
3. Management of Treasury bills are useful for ________term
174 Short Medium Long Permanent Short Average 1
Working Capital financing.
3. Management of ______model suggest that cash should be
Working Capital 175 managed in the same way like inventory Baumol’s model Miller Orr model Water model Cash Holding model Baumol’s model Moderate 1
management.
Programme: M.Com
SEM IV
3. Management of Miller Orr cash management model was
176 1961 1952 1966 1962 1966 Moderate 1
Working Capital introduced in the year ______.
3. Management of _______ is not a motive of holding cash.
177 Capital investments Transaction motive Speculative motive Precautionary motive Capital investments Moderate 1
Working Capital
3. Management of Risk of failure in repayment of debt is
178 Interest Rate Risk Default risk Credit Risk Market risk Default risk Difficult 1
Working Capital ________.
3. Management of Holding cash for gain from future
179 Transaction Precautionary Speculative Investment Speculative Moderate 1
Working Capital uncertain event is ______motive.
3. Management of Security of indebtedness issued by public
180 Debenture Preference share Equity share Public deposit Debenture Moderate 1
Working Capital company is ______.
3. Management of __________ is the technique of monitoring
181 Ageing schedule Fund flow Cash flow Cash management Ageing schedule Average 1
Working Capital accounts receivables
3. Management of ________ sales results in accounts
182 Credit Direct Cash Branch office Credit Average 1
Working Capital receivable.
3. Management of Accounts receivable include ________.
183 Debtors Bills receivable Debtors & Bills receivable Debtors & Bills payable Debtors & Bills receivable Easy 1
Working Capital
3. Management of _____is issued by banks on behalf of
184 Debit note Credit note Letter of credit Invoice Letter of credit Moderate 1
Working Capital customers to the suppliers.
3. Management of Consignment refers to___________. Supply of goods for Supply of goods on Supply of goods on
185 Supply of goods by sample Supply of goods for sale Average 1
Working Capital sale approval. approval or return basis
3. Management of Longer credit period allowed to customers
186 Reduces Increases does not affect Defaults Increases Moderate 1
Working Capital ______possibility of bad debts
3. Management of Fixed cost Rs.18,00,000, Variable cost Rs.
Working Capital 6,00,000. Credit period 1 month. ROI
187 432000 36000 200000 72000 36000 Difficult 1
18%. The cost of investment in debtors
will be Rs._______.
3. Management of Existing Sales Rs.15,00,000 if credit
Working Capital allowed is 2 months. Default risk is 2%.
188 Increase in credit period by 1 month will 7500 5000 30000 60000 60000 Difficult 1
double the sales volume. Revised default
cost = _________.
double the sales volume. Revised value of
debtors = _________.
3. Management of EOQ stands for ____________. Efficient Order
190 Efficient Order Quality Economic Order Quantity Economic Order Quality Economic Order Quantity Easy 1
Working Capital Quantity
3. Management of In ABC analysis, ______items have
191 A B C A&B C Average 1
Working Capital minimum control and records.
3. Management of ______indicates the items which are
192 F S N S&N F Average 1
Working Capital frequently used.
3. Management of As per VED analysis, _____type of items
193 V N D S V Average 1
Working Capital should be always maintained in inventory.
3. Management of EOQ considers _____consumption of
194 Monthly Weekly Annual Batch wise Annual Moderate 1
Working Capital inventory.
3. Management of Annual consumption 1,00,000 units @ Rs.
Working Capital 5 per unit. Storage cost Re.1 p.a., Order
195 100 200 50 500 50 Difficult 1
cost Rs.20 per order. Number of orders as
per EOQ = _______.
3. Management of Cost of goods sold Rs.4,00,000. Average
Working Capital 196 stock 25,000. Material turnover ratio will 12 16 6.25 8 16 Moderate 1
be ________ times.
3. Management of Opening stock Rs.70,000. Closing stock
197 180000 70000 90000 110000 90000 Easy 1
Working Capital Rs.1,10,000. Average stock = _______.
3. Management of Opening stock Rs.1,00,000. Average stock
198 30000 160000 70000 230000 160000 Average 1
Working Capital Rs.1,30,000. Closing stock =________
3. Management of Material turnover ratio 10 times, Opening
Working Capital 199 stock 50,000, Closing stock 30,000. Cost 800000 300000 400000 500000 400000 Difficult 1
of goods sold =_______.
3. Management of Which of the following uses amounts from Inventory Turnover
200 Current Ratio Quick Ratio Working Capital Inventory Turnover Ratio Average 1
Working Capital more than one financial statement? Ratio
3. Management of “Working capital is the excess of current
201 H.G.Guthmann Adam smith Alfred marshal F.W.Taylor H.G.Guthmann Moderate 1
Working Capital asset over current liabilities “ given by _
3. Management of The circular flow concept of working
202 Operating cycle Production cycle Business cycle Trade Cycle Operating cycle Easy 1
Working Capital capital is based upon ______________
3. Management of Which aspect not concern of working Fixed assets
203 Inventory management Cash management Receivable management Fixed assets management Average 1
Working Capital capital management ? management
3. Management of The amount of current assets that varies
Working Capital 204 with seasonal requirements is refered to as Permanent Net Temporary Gross Temporary Moderate 1
_______working capital.
3. Management of Working Capital Turnover Ratio measure
205 fixed assets purchase sales stock stock Average 1
Working Capital the relationship of working capital with :
3. Management of Working capital management is managing short term asstes and short term asstes and
206 long term assets long term liabilities only short term assets Moderate 1
Working Capital ____________ liabilities liabilities
3. Management of The amount needed to compute a
Working Capital 207 company’s working capital come from profit and loss account income statements cash flow statement balance sheet balance sheet Average 1
which financial statements ?
3. Management of The operating cycle for most companies
208 shorter longer better worst shorter Average 1
Working Capital will be _______ than 1 year.
3. Management of _______________ refers to idle funds shortage of working excess working
209 variable working capital fixed working capital excess working capital Moderate 1
Working Capital which earns no return capital capital
3. Management of Concept of Maximum Permissible Bank
210 Kannan Committee Chore Committee Nayak Committee Tandon Committee Tandon Committee Difficult 1
Working Capital finance was introduced by
3. Management of Net current assets= Current assets -
211 Current liabilities Working capital Gross current assets Gross currrent liabilities Current liabilities Easy 1
Working Capital _________.
212 Remains constant Increases Decreases does not affect Decreases Average 1
Working Capital decrease in current assets
3. Management of Net working capital = ____________ Current assets + Current assets - Current liabilities - Current assets - Current
213 Current assets Average 1
Working Capital current liabilities Current liabilities current assets liabilities
3. Management of ____working capital required to meet
214 Temporary Permanent Seasonal Current Seasonal Average 1
Working Capital seasonal requirements of the business.
3. Management of Excess of current assets over current Negative working Positive working
215 Neutral working capital Zero working capital Positive working capital Average 1
Working Capital liabilities is _____________. capital capital
3. Management of Short operating cycle needs
216 Higher Lower Constant fluctuating Lower Moderate 1
Working Capital ______working capital
3. Management of Long credit period from creditors
Working Capital _______working capital requirements.
3. Management of Advance payment of expenses
218 Decreases Increases Does not affect sometimes affect Increases Moderate 1
Working Capital ______working capital requirements.
Programme: M.Com
SEM IV
3. Management of Lag in payment of overheads ______
Working Capital working capital requirement.
3. Management of Increase in holding period of
Working Capital 220 stock_______ requirement of working Decreases Increases Does not affect sometimes affect Increases Moderate 1
capital.
221 640000 440000 660000 460000 440000 Difficult 1
10% on Net current assets. Working
3. Management of ______ securities are considered as safest
222 Corporate deposits Debentures Gilt edged securities Equity shares Gilt edged securities Average 1
Working Capital securities in India
3. Management of Maximum maturity period for Treasury
223 182 days 364 Days 1 year 3 years 364 Days Average 1
Working Capital bills can be _____.
3. Management of Commercial papers are issued _______ to
224 At par At discount At premium at Market value At discount Average 1
Working Capital face value.
3. Management of Treasury bills are _____ instrument.
225 Risky Moderately risky Highly risky Risk free Risk free Average 1
Working Capital
3. Management of _____model aims at maintaining optimum
226 Baumol’s model Miller Orr model Water model Cash Holding model Baumol’s model Moderate 1
Working Capital cash balance at minimum total cost.
3. Management of ______model applies EOQ for cash
227 Baumol’s model Miller Orr model Water model Cash Holding model Baumol’s model Moderate 1
Working Capital management.
3. Management of Miller Orr cash management model deals Optimum cash
228 Optimum inventory Optimum receivable Maximum Cash Optimum cash balance Moderate 1
Working Capital with _______, balance
3. Management of ______ is recently developed payment Electronic fund
229 Cheque payment Cash payment Bill of exchange Electronic fund transfer Moderate 1
Working Capital method used in cash management. transfer
3. Management of Risk of ability of repayment is ________.
230 Interest Rate Risk Default risk Credit Risk Market risk Credit Risk Difficult 1
Working Capital
3. Management of Holding cash for routine cash operations is
231 Transaction Precautionary Speculative Investment Transaction Average 1
Working Capital ______motive.
3. Management of ______cost is not concerned with
232 Ordering cost Collection cost Defaulting cost Financing cost Ordering cost Average 1
Working Capital receivable management.
3. Management of Credit evaluation is a part of ________
233 Receivable Payable Inventory Cash Receivable Average 1
Working Capital management.
3. Management of In Accounts receivable, DSO stands for Default Sales Debtors Sales
234 Distict Sales Office Days Sales Outstanding Days Sales Outstanding Moderate 1
Working Capital ________. Outstanding Outstanding
3. Management of Classification of debtors into age brackets
235 Character Ageing Collection Recovery Ageing Moderate 1
Working Capital is called ________ schedule.
3. Management of Increase in accounts receivable_______. Increases default Decreases default Increases working
236 Decreases working capital Increases working capital Difficult 1
Working Capital period period capital
Working Capital 4,00,000. Credit period 3 months. ROI
237 120000 480000 600000 240000 120000 Difficult 1
will be Rs._______.
double the sales volume. Revised sales
volume = _________.
3. Management of The cost incurred to collect the dues from
239 Collection cost Administrator cost Default cost Interest cost Collection cost Easy 1
Working Capital customers is called as______.
debtors = _________.
3. Management of VED analysis stands for ______. Vital, Essential, Virtual, Essential, Variable, Essential,
241 Vital, Exclusive, Desirable Vital, Essential,Desirable Average 1
Working Capital Desirable Descriptive Diversified
3. Management of In FSN analysis, _______items have more
242 F S N S&N F Average 1
Working Capital turnover.
3. Management of In ABC analysis, ______items have costly
243 A B C A&B A Average 1
Working Capital items.
3. Management of EOQ provides ______level of inventory.
244 Maximum Minimum Optimum Reasonable Optimum Moderate 1
Working Capital
3. Management of Carrying cost of inventoty is called as
245 Order cost Storage cost Material cost Interest cost Storage cost Easy 1
Working Capital ______.
3. Management of Annual consumption 1,00,000 units @Rs.
Working Capital 246 10 per unit, Storage cost 10% p.a., Order 4000 2000 10000 5000 2000 Difficult 1
cost Rs.20 per order. EOQ =_______.
3. Management of Opening stock is 40,000, Closing stock is
Working Capital 247 30,000, Purchases 3,50,000. Material 10 times 20 times 30times 5 times 10 times Difficult 1
Turnover is________.
Working Capital 248 stock 25,000. Material turnover ratio will 12 16 20 2 20 Moderate 1
be ________ times.
3. Management of Opening stock Rs.50,000. Closing stock
249 140000 50000 70000 90000 70000 Easy 1
Working Capital Rs.90,000. Average stock = _______.
3. Management of Opening stock Rs.1,20,000. Average stock
250 280000 200000 40000 140000 200000 Moderate 1
Working Capital Rs.1,60,000. Closing stock =________
Working Capital 251 stock 60,000, Closing stock 40,000. Cost 1200000 480000 600000 720000 600000 Difficult 1
of goods sold =_______.
252 500000 240000 60000 120000 60000 Difficult 1
will be Rs._______.
3. Management of Which of the following amounts will be
The Total Amount of The Total Amount The Total Amount of The Total Amount of The Total Amount of
Working Capital 253 used in both the calculation of the current Average 1
Current Assets of Liabilities Assets Current Liabilities Current Liabilities
ratio and the quick ratio?
3. Management of Which of the following is another name
254 Acid Test Ratio 2:1 Ratio Current Ratio Working Capital Ratio Acid Test Ratio Easy 1
Working Capital for the quick ratio?
3. Management of A company has current assets of Cash of
Working Capital Rs.40,000; Accounts Receivable of Rs.
80,000; and Inventory of Rs.60,000. The
255 total of its current liabilities is Rs.120,000 2 1 3 0.02 1 Moderate 1
and the total amount of its liabilities is Rs.
290,000. Given this information, the
company’s quick ratio is ____ : 1
Programme: M.Com
SEM IV
3. Management of During a recent year, a company's
Working Capital accounts receivable had an average
balance of Rs.60,000 and its sales on credit
256 3.5 times 2 times 6 times 9 times 9 times Difficult 1
were Rs.540,000. The company’s
receivable turnover ratio for the year
was _________times.
3. Management of During a recent year, a company's
Working Capital accounts receivable turnover ratio was 13.
257 The company's average collection period 28 days 29 days 14 days 24 days 28 days Difficult 1
for the year was _____________days.
(Rounded to the nearest whole day.)
3. Management of During a recent year, a company had an
Working Capital average inventory balance of Rs.200,000;
its sales were Rs.10,00,000; and its cost of
258 85 days 90 days 110 days 100 days 90 days Difficult 1
goods sold was Rs.8,00,000. Using a 360-
day year, the days’ sales in inventory for
the year averaged _________ days.
cost = _________.
3. Management of Annual consumption 1,000 units @Rs.10
Working Capital per unit, Storage cost 10% p.a., Order cost
260 2 1 5 10 5 Difficult 1
Rs.20 per order. Number of orders as per
EOQ =_______.
3. Management of Gross working capital= _______
261 Current liabilities Working capital Gross current assets Gross currrent liabilities Gross current assets Average 1
Working Capital
262 Remains constant Increases Decreases does not affect Decreases Average 1
Working Capital increase in current liabilities
3. Management of ________working capital does not change
263 Temporary Permanent Seasonal Current Permanent Average 1
Working Capital with market conditions.
3. Management of Working capital decided on the basis of
Seasonal working Cash Working Balance sheet working Permanent working Balance Sheet Working
Working Capital 264 current assets & Current Liabilities is Average 1
capital Capital capital capital Capital
_____.
3. Management of Excess of current liabilities over current Negative working Positive working
265 Neutral working capital Zero working capital Negative Working Capital Average 1
Working Capital assets is _____________. capital capital
3. Management of Service organisation needs
Working Capital 266 ______workiing capital as compared to Higher Lower Constant fluctuating Lower Moderate 1
manufacturing concern.
3. Management of For working capital, finished goods are
267 Market price Selling price Factory cost Cost of production Cost of production Moderate 1
Working Capital valued at ______.
3. Management of Advance from customers______ the
Working Capital requirement of working capital.
3. Management of Provision for contingency is _____ to net
Working Capital 269 current assets to get working capital Added Deducted Not included Sometimes included Added Average 1
requirement.
Working Capital 270 liabilities Rs.2,10,000. Working capital 540000 210000 750000 330000 330000 Easy 1
will be Rs. ________.
271 640000 440000 560000 460000 560000 Difficult 1
10% on Gross current assets. Working
3. Management of Treasury bills can be issued for ______
272 91 181 361 365 91 Average 1
Working Capital days.
3. Management of Holding cash increases _______of the
273 Net worth Profitability Liquidity Credit position Liquidity Moderate 1
Working Capital business.
3. Management of Commercial papers are regulated in India
274 SBI RBI SEBI IRDA RBI Average 1
Working Capital by _______.
3. Management of On maturity of Treasury bills, repayment
275 Principal Interest Principal plus interest Market value Principal plus interest Average 1
Working Capital of ______amount is guaranteed.
3. Management of _____model assumes that, movement in
276 Baumol’s model Miller Orr model Water model Cash Holding model Miller Orr model Moderate 1
Working Capital cash balance occur randomly.
3. Management of Baumol’s cash management model was
277 1961 1952 1966 1962 1952 Moderate 1
Working Capital introduced in the year ______.
3. Management of ____ can be considered for security as
278 Equity shares Treasury bills Debentures Preference shares Treasury bills Moderate 1
Working Capital substitute for cash
3. Management of The uncertainty about expected regular
Working Capital 279 return from a marketable security is Interest Rate Risk Default risk Credit Risk Market risk Interest Rate Risk Difficult 1
_______
3. Management of Holding cash for future contingency is
280 Transaction Precautionary Speculative Investment Precautionary Moderate 1
Working Capital ______motive.
3. Management of Security of indebtedness issued by
281 Bond Preference share Equity share Public deposit Bond Moderate 1
Working Capital government is ______.
3. Management of ______method uses internet for fund Electronic fund
282 Cheque payment Cash payment Bill of exchange Electronic fund transfer Easy 1
Working Capital transfer across bank accounts. transfer
3. Management of Ageing of debtors is used to Debtors
283 Debtors defaulting Debtos collection Debtos receivable Debtors outstanding Average 1
Working Capital measure_______, outstanding
3. Management of Shipping the goods to an agent for sale is
284 Branch Consignment Credit Cash Consignment Moderate 1
Working Capital ______sale.
3. Management of Defaulting cost is outcome of ________.
285 Bills receivable Bad Debts Credit sales Cash Sales Bad debts Average 1
Working Capital
3. Management of 2/10 Implies 2% Cash discount allowed 2% Cash discount allowed
Payment within 10 2% penalty if amount is
Working Capital 286 2 % Cash discount for payment within 10 for payment within 10 Difficult 1
days not paid within 10 days
days. days.
3. Management of The cost incurred due to default in
287 Default cost Capital cost Recovery cost Credit cost Default cost Moderate 1
Working Capital payment is called as ______.
288 300000 450000 75000 150000 75000 Difficult 1
will be Rs._______.
double the sales volume. Existing default
cost = _________.
Programme: M.Com
SEM IV
double the sales volume. Current value of
debtors = _________.
cost = _________.
debtors = _________.
3. Management of In ABC analysis, ______items have tight
293 A B C A&B A Average 1
Working Capital control and accurate records.
3. Management of In FSN analysis, _______items have
294 F S N S&N N Average 1
Working Capital negligible turnover.
3. Management of In ABC analysis, ______items are huge in
295 A B C A&B C Average 1
Working Capital quantity but less in value.
3. Management of EOQ does not include _______.
296 Order cost Storage cost Material cost Interest cost Interest cost Moderate 1
Working Capital
3. Management of Annual consumption 1,00,000 units @ Rs.
Working Capital 6 per unit. Storage cost Re.1 p.a., Order
297 4000 2000 10000 5000 2000 Difficult 1
cost Rs.20 per order. EOQ = ________
units.
3. Management of Annual consumption 1,000 units @Rs.10
Working Capital 298 per unit, Storage cost 10% p.a., Order cost 1000 500 200 2000 200 Difficult 1
Rs.20 per order. EOQ =_______.
3. Management of Material turnover ratio = Cost of goods
299 Opening stock Closing stock Average Stock Purchases Average Stock Average 1
Working Capital sold / ________.
3. Management of Opening stock Rs.80,000 and Closing
Working Capital 300 stock Rs.1,00,000. Average stock = 180000 80000 90000 100000 90000 Easy 1
_______.
Working Capital 301 stock 40,000. Material turnover ratio will 12 15 10 20 15 Difficult 1
be ________ times.
3. Management of Opening stock Rs.80,000 and Average
Working Capital 302 stock Rs.1,00,000. Closing stock 90000 120000 20000 180000 120000 Moderate 1
=________
Working Capital 303 stock 20,000 and Closing stock 30,000. 500000 400000 600000 1000000 500000 Difficult 1
Cost of goods sold =_______.
3. Management of If a company has current assets of Rs.
Working Capital 460,000 and current liabilities of Rs.
304 23 10 2.3 0.23 2.3 Difficult 1
200,000 the company's current ratio
is _____________ : 1
3. Management of How will the total amount of a company's
The Total Decreases The Total Increases The Total Remains the The Total Increases By The Total Remains the
Working Capital 305 working capital change when a Rs.10,000 Difficult 1
By Rs.10,000 By Rs.10,000 Same Rs.5,000 Same
account receivable is collected?
3. Management of How will the total amount of a company's
The Total Decreases The Total Increases The Total Increases By Rs. The Total Remains the The Total Remains the
Working Capital 306 working capital change when the company Difficult 1
By Rs.8,000 By Rs.6,000 8,000 Same Same
pays Rs.8,000 of its accounts payable?
3. Management of How will a company's liquidity change
Its Liquidity
Working Capital 307 when some of its products are sold from Its Liquidity Decreases Its Liquidity Is Unchanged Its solvency affects Its Liquidity Increases Difficult 1
Increases
inventory?
3. Management of Transaction motive for holding cash is for
308 Daily to day operations Dividend payment Acquisition of asset Liquidity Daily to day operations Average 1
Working Capital ___________.
3. Management of When cash is received against overdraft There is an increase
There is an increase in There is decrease in Net There is no effect in There is an increase in
Working Capital 309 from bank ? in Gross Working Difficult 1
Net Working Capital Working Capital Gross Working Capital Gross Working Capital
Capital
3. Management of _______________ will ensure high return adequate working surplus working
310 shortage of working capital excess working capital adequate working capital Average 1
Working Capital on investment. capital capital
3. Management of _________ in accounts receivable
311 Increase decrease conversion change Increase Moderate 1
Working Capital increases working capital.
3. Management of Working capital finance is not raised from
312 Bank overdraft Cash credit Bill finance Equity share Equity share Difficult 1
Working Capital __________
3. Management of The organization which allows longer
Lesser working Moderate working
Working Capital 313 period of credit to debtors requires More working capital No working capital More working capital Moderate 1
capital capital
__________.
3. Management of Seasonal Working Capital is Fluctuating in
314 Permanently required Temporaryly required Not required More working capital Easy 1
Working Capital ____________. nature
3. Management of Average holding period
Working Capital 315 of___________decides requirement of current liabilities current assets fixed assets fixed liabilities current assets Average 1
working capital.
3. Management of Provision for contingency is added to
316 net current asset current asset current liabilities fixed capital net current asset Moderate 1
Working Capital ____________ to get working capital.
3. Management of ABC analysis is a techniques of
317 creditors Inventory receipts payment Inventory Moderate 1
Working Capital controlling ___________.
3. Management of __________rate of stock turnover
318 Higher lower Constant variable Higher Difficult 1
Working Capital improves liquidity.
3. Management of Inadequate investment in current assets
319 low liquidity no profitability low profitability high solvency low liquidity Moderate 1
Working Capital results in ____________.
3. Management of Higher cash and bank balance increases increases operating decreases operating
320 decreases profitability decreases profitability Difficult 1
Working Capital __________. profitability efficiency efficiency
3. Management of Longer the process period ____________. lesser will be the larger will be the minimum will be the moderate will be the larger will be the working
321 Average 1
Working Capital working capital working capital working capital working capital capital
3. Management of Excessive investment in current assets
322 Excess profitablity no profitability low profitability high profitablity low profitability Difficult 1
Working Capital results in ___________.
3. Management of Purchase of Material Rs. 90,000 , Opening
Working Capital stock of material Rs.25,000, Closing stock
323 Rs.95000 Rs.115000 Rs.160000 Rs.100000 Rs.100000 Difficult 1
of material Rs. 15,000. Cost of material
consumption ?
3. Management of Find out working capital if, creditors Rs.
Working Capital 15,626 , outstanding wages Rs. 2,605 ,
outstanding overhead Rs. 1,042 , total
current assets Rs. 1,19,281.
Programme: M.Com
SEM IV
3. Management of The model which suggest that cash should
Working Capital 325 be managed in the same way as inventory Baumol's model Miller Orr model Water model CAP model Baumol's model Difficult 1
is _____________.
3. Management of Availability of cash in future after
Working Capital 326 considering the financial commitment is Cash flow Liquidity Solvency Cash rich Liquidity Average 1
known as __________.
3. Management of Calculate Cash closing balance for the
Working Capital month of March if opening balance Rs.
327 150,000 , cash sales Rs. 3,20,000 , Rs.195000 Rs.200000 Rs.186000 Rs.397000 Rs.195000 Difficult 1
collection from debtors Rs. 240,000, Total
payments Rs. 5,15,000.
3. Management of Permanent working capital is Minimum working
Seasonable in Permanently blocked up in Permanently blocked up Minimum working capital
Working Capital 328 _______________. capital required at all Easy 1
nature stock in debtors required at all the time
the time
3. Management of Sale of goods on cash Reduces working Increases working Nullifies working capital No effect on working Reduces working capital
329 Average 1
Working Capital basis________________. capital requirement capital requirement requirement capital requirement
3. Management of Balance Sheet working capital is Book values of Current Book values of Current
Market value of
Working Capital calculated on the basis of Assets and Current Fair value of current assets Assets and Current
330 Current Assets and Fixed Assets Difficult 1
_______________. Liabilities as per and Current Liabilities Liabilities as per Balance
Current Liabilities
Balance Sheet Sheet
4. Financial A budget that gives a summary of all the
331 Capital budget Flexible budget Master budget Fixed budget Master budget Easy 1
Planning functional budgets is known as
4. Financial A budget designed to remain unchanged
Planning 332 irrespective of level of capacity or volume Fixed Budget Flexible budget Master budget Cash Budget Fixed Budget Easy 1
is called ___
4. Financial A budget designed to study change in
Planning relation to the level of activity attained by
333 Fixed Budget Flexible budget Master budget Cash Budget Flexible budget Easy 1
recognising the difference between fixed,
semi-fixed and variable cost is called ___
4. Financial ____is a graphical technique of separating
Planning fixed and variable components of mixed
334 Scatter graph method Least squares Simultaneous equations Range method Scatter graph method Easy 1
cost by plotting activity level along x-axis
and corresponding total cost along y-axis.
4. Financial
335 Indefinite period Definite period Period of one year six months Definite period Easy 1
Planning Budget is prepared for a ___
4. Financial
336 Key factor abnormal factor linking factor normal factor key factor Easy 1
Planning The scare factors is also known as __
4. Financial Budgetary control system acts as a friend,
337 management share holder creditor employees management Easy 1
Planning philosopher and guide to the ___
4. Financial ____ may be regarded as a summary
338 Production Budget master budget. Cash Budget Sales Budget Master budget Easy 1
Planning budget.
4. Financial _______ budget co-ordinates the activities
Planning 339 of various functional areas of the Purchase Production Sales Master Master Easy 1
organisation
4. Financial __________ budget refers to the
Planning 340 estimation of sales revenue & sales Purchase Sales Flexible Fixed Sales Easy 1
overheads for a particular period
4. Financial Estimates of future estimates of future estimates of future
341 estimates of future sales estimates of future sales Easy 1
Planning Sales budget shows ___________ . production stocks purchase
4. Financial _________________ is the summery of all
342 Master Purchase Sales Production Master Easy 1
Planning financial budgets.
4. Financial __________ budget is also known as a
343 Master Cash Flexible Fixed Master Easy 1
Planning comprehensive plan for the company.
4. Financial In large organisation the task of
Planning 344 administration of budget is performed by Budget officer only Budget Committee Accountant Sales manager Budget Committee Easy 1
________.
4. Financial Budget relating to key factor should be
345 Last First After cash budget After master budget First Easy 1
Planning prepared ______.
4. Financial __________ is a statement of expected
346 Budget Mission Objectives Rules Budget Easy 1
Planning results expressed in numerical term.
4. Financial
347 Purchase budget Sales budget Cash budget Overhead budget Sales budget Easy 1
Planning Production budget is dependent on:
4. Financial R & D budget and capital expenditure
348 Short term budget long term budget current budget labour budget long term budget Easy 1
Planning budget are examples of
4. Financial The receipts from issue of shares, issue of
Receipts from Non- Receipts from Receipts from capital Receipts from capital
Planning 349 debentures ans sale of fixed investments Cash Payment Easy 1
Business operations Business operations transaction transaction
are
4. Financial Zero base budgets starts with the basic
Planning 350 premises that the budget for the next year Zero one hundred ten Zero Easy 1
is
4. Financial
351 Management Government Political parties Creditors Management Easy 1
Planning Zero base budget is a tool in the hands of
4. Financial ____________invovles a careful Research &
Performance Management information
Planning 352 differentiation between fixed and variable Flexible budgeting development cost Flexible budgeting Easy 1
budgeting system
expenses. budgeting
4. Financial A cost which is partly fixed and partly
353 fixed cost variable cost semi-variable cost prime cost semi-variable cost Average 1
Planning variable is called __
4. Financial A factor budget which influences all other Structural equation
354 key exploratory confirmatory key Average 1
Planning budgets is called ___factor modeling
4. Financial Can be used to determine
Reflects controllable Shows forecasted contains the operating contains the operating
Planning 355 manufacturing cost Average 1
costs only and actual results budget budget
The master budget __ variances
4. Financial
356 action reaction business environment action Average 1
Planning Budget is a written plan of
4. Financial The fixed cost at 75% capacity is Rs.
357 Rs.25000 Rs.50000 Rs.30000 Rs.40000 Rs.50000 Average 1
Planning 50000, then fixed cost at 65% will be ___
4. Financial At 80% capacity the varibale cost per unit
Planning 358 was Rs.5 per unit. So for 100% capacity Rs.5 per unit Rs.6 per unit Rs. 7 per unit Rs. 8 per unit Rs.5 per unit Average 1
the variable cost per unit will be ___
4. Financial The object of budgetary control is
359 planning forecasting organising directing planning Average 1
Planning __________
4. Financial Master budget Production Budget
360 Cash Budget only Capital Budget only All functional budgets All functional budgets Average 1
Planning includes________________ only
4. Financial ___________ budget is a major planning
361 Purchase Sales Production Master Master Average 1
Planning device for an organisation.
4. Financial ___________ budgets are subsidiary to
362 Functional Fixed Flexible Cash Functional Average 1
Planning master budget.
Programme: M.Com
SEM IV
4. Financial _______ budget is a forecast of expected
Planning units a company intends to sell over a
363 Fixed Purchase Sales Cash Sales Average 1
period of time and the revenue it should
generate form it
4. Financial Budget officer act as a ____________ of
364 Member Secretary President Advisor Secretary Average 1
Planning the budget committee.
4. Financial The __________ factor is also known as
365 Most scarce least scarce most liked plentiful Most scarce Average 1
Planning key factor.
4. Financial It is no way related with
Budget can be It provides a base for
Planning Budget is prepared for the management plans and Budget can be expressed
366 expressed in form measuring the success Average 1
an indefinite period policies to be pursued in in form of physical unit
of physical unit of expected result
Which of the following statement are true future
4. Financial If the activity level is reduced from 60% to will increase by
367 will decrease by 10% per unit will decrease per unit will increase per unit will increase Average 1
Planning 40% the fixed cost 10%
4. Financial Cash payment for
Cash payment for Cash payment for business Cash payment for non-
Planning 368 The payment of Tax, Interest & Dividend non-operating Cash receipt Average 1
capital transaction operation operating expenses
are examples of expenses
4. Financial Which budget is made to change as per the Research and development Capital expenditure
369 Fixed budget Flexible budget Flexible budget Average 1
Planning levels of activity attained budget budget
4. Financial Flexible budgeting is used when the
Planning 370 supply of material and labour required for Fixed uncertain certain zero uncertain Average 1
production is __________
4. Financial Which budget hepls in fixing the Capital expenditure
371 Labour budget Purchase budget Current budget Purchase budget Average 1
Planning maximum and minimum order quantity budget
4. Financial In order to estimate the cash inflow from
Planning cash sales, the total sales forecast should
372 Dividend Credit sales Interest Investment Credit sales Average 1
be divided between the cash sales and
___________.
4. Financial _________is the length of time for which a
373 Best budget Budget period slow budget Basic budget Budget period Average 1
Planning budget is prepared.
4. Financial ________shows the planned outlay on
Capital expenditure
Planning 374 fixed assets to be acquired during the Labour budget Performance budget Flexible budget Capital expenditure budget Moderate 1
budget
budget period.
4. Financial A budget is a detailed plan prepared for
375 past period current period future period Concurrent period future period Moderate 1
Planning ___
4. Financial Comparing actual results to a budget based
Planning 376 on actual activity for the period is possible monthly budget. master budget. rolling budget flexible budget flexible budget Moderate 1
with the use of a _
4. Financial used when the mix of
a budget for a single a budget that a budget for a single level
Planning 377 used only for fixed costs. products does not Moderate 1
level of activity. ignores inflation of activity.
A fixed budget is ___ change
4. Financial The part of master budget , which covers
Planning the capital expenditures, budgeted
378 financial budget capital budget cash flow budget balanced budget financial budget Moderate 1
statement of cash flows and balance sheets
are classified as __
4. Financial
379 Master Budget Functional Budget Fixed budget current budget Master Budget Moderate 1
Planning _______also known as subsidiary budgets.
4. Financial __________ contains the picture of total
Planning plans during the budget period and it
380 Master Budget Functional Budget Fixed budget current budget Master Budget Moderate 1
comprises information relating to sales,
profit, cost, production etc.
4. Financial Production at 60% activity is Rs 600 units,
Planning 381 if flexible budget needs to be calculated at 800 600 1200 1000 800 Moderate 1
80% activity what will be units produced?
4. Financial ________is a budget of income or
Research &
Planning 382 expenditure appropriate to,or the Functional budget Labour budget Capital Expenditure budget Functional budget Moderate 1
development budget
responsibility of, a particular function.
4. Financial A company estimates the following
Planning expenditure for the month of April 2021
Direct material Rs. 100,000
Direct labour Rs. 200,000
Factory overheads 30% of wages
Administration and selling overheads 20%
383 Rs. 540,000 Rs. 640,000 Rs. 780,000 Rs 960,000 Rs.540,000 Moderate 1
of works cost
The company sells goods at the profit at
20% on sales.
The budgeted sales for the month of April
2021 is __________

Planning expenditure for the month of August2020.
Direct wages Rs. 40,000
Factory overheads
20% of prime cost
Administration overheads are
384 50% of factory overheads Rs 88,750 Rs. 75,000 Rs. 71,000 Rs.90,000 Rs88,750 Moderate 1
Selling and distribution overheads are
10% of works cost
The company sells goods at 20% profit on
sales
The budgeted sales for the month of
August 2020 Is ________________
4. Financial A document which sets out the

Planning responsibilities of the person engaged in,
385 the routine of, and the forms & records Fixed Budget Flexible Budget Budget Manual Master Budget Budget Manual Moderate 1
required for budgetary control known as
_____
4. Financial ________ is formed with the heads of all
Planning departmental which is made responsible
386 Budget officer Budget Committee Budget Manual Quality Circle Budget Committee Moderate 1
for preparation & implementation of
budgets.
Programme: M.Com
SEM IV
Planning expenditure for the month of January
2021.
387 Overheads 50% of prime cost Rs. 900,000 Rs.750,000 Rs. 10,00,000 Rs.850,000 Rs.900,000 Moderate 1
The company sales goods at the profit of
20% on cost.
January 2021 is ______________
4. Financial _______ budget has to be prepared before

388 Sales Cash Capital Expenditure Purchase Sales Moderate 1
Planning production budget.
4. Financial _________ is set of rules & instructions
Accounting
Planning 389 used by large organisation to prepare their Budget Manual Working Papers Bye-laws Budget Manual Moderate 1
Standards
budget and related reports
Planning expenditure for the month of February
2021.
Factory overheads are 30% of direct wages
Administration & selling overheads are
390 Rs. 90,000 Rs. 120,000 Rs. 112,500 Rs.150,000 Rs. 112,500 Moderate 1
20% of works cost.
cost.
February 2021. Is ________________
4. Financial Sales Sales quantity-

Sales quantity-Opening Sales quantity+Opening Sales quantity-Opening
Planning 391 When preparing a production budget, the quantity+Opening Opening Moderate 1
stock-closing stock stock+closing stock stock+closing stock
quantity to be produced equals : stock-closing stock stock+closing stock
4. Financial A company is preparing a production
Planning budget for the next year. The following
information is relevant : Budgeted sales is
12,000units, opening stock is 1,200units
392 and closing stock is 10% of budgeted Rs. 15,000 Rs. 20,000 Rs. 10,000 Rs.5,000 Rs. 15,000 Moderate 1
sales. The production process is such that
20% of units produced are rejected. What
is the number of units required to be
produced to meet demand
4. Financial Which of the following are advantages of a
Planning budgets: A) Maximisation of profit B)
393 Budgets are estimates not 100% accurate A&C A&B C&D B&D A&C Moderate 1
C) Targets for management D) Costly
sysytem
4. Financial Cash budget is more helpful to those No seasonal Wide seasonal Minimum seasonal
394 Rare seasonal fluctuations Wide seasonal fluctuations Moderate 1
Planning business concerns where there are fluctuations fluctuations fluctuations
4. Financial When a flexible budget is used, a decrease
Decrease variable cost Decrease variable Increase variable cost
Planning 395 in the actual production level within a Increase total fixed costs Decrease variable costs Difficult 1
per unit costs per unit
relevant range would ___
4. Financial The cost of material at 50% capacity is Rs
Planning 10,000 and budget is to be prepared at
Rs.12000 and Rs. Rs.12000 and Rs.
396 60%, 90% and 100% of normal capacity. Rs.11000 and Rs.18000 Rs. 10000 and Rs.12000 Rs.12000 and Rs.18000 Difficult 1
18000 20000
The cost of material at 60% and 90%
capacity will be
4. Financial At 50% capacity expenses are Rs 20,000,
Planning which increase by 10% between 60% and
80% level of activity and 20% thereafter.
The expenses at 70% will be __
4. Financial Control of direct
Planning Control of fixed materials and direct Control of direct labor
Control of direct labor and
factory overhead but labor but not and direct materials but
398 any level of activity. direct materials but not Difficult 1
not direct materials and selling and not fixed factory
fixed factory overhead.
direct labor administrative overhead.
Flexible budget is appropriate for expenses.
4. Financial When using a flexible budget, what will fixed cost are not
fixed cost per unit will fixed cost per unit fixed cost per unit will fixed cost per unit will
Planning 399 occur to fixed costs as the activity level considered in flexble Difficult 1
decrease will increase remain unchanged decrease
increases within the relevant range? budgeting
4. Financial that the variances between that the variances between
Planning the difficulty in the cost behavior actual and budget on a actual and budget on a
developing such pattern of static budget result from static budget result from
their length and
400 budgets due to the high manufacturing comparing actual costs at comparing actual costs at Difficult 1
complexity.
cost of gathering the overhead, which is one level of activity to one level of activity to
A major disadvantage of static budgets is necessary information primarily fixed budgeted costs at a budgeted costs at a
__ different level of activity different level of activity
4. Financial the difference between the difference
the difference between the difference between the difference between
Planning budgeted fixed between actual
budgeted fixed overhead budgeted fixed overhead budgeted fixed overhead
401 overhead cost and fixed overhead cost Difficult 1
cost and applied fixed cost and actual fixed cost and actual fixed
The fixed overhead budget variance is actual fixed overhead and applied fixed
overhead cost. cost overhead cost.
measured by ___ cost. overhead cost.
4. Financial Number of units multiplied to per unit multiple budget ficed budget constant budget
402 flexible budget variance flexible budget variance Difficult 1
Planning price to calculate ___ variance variance variance
4. Financial ___________ budget provide the
Planning 403 foundation for a traditional financial Master Sales Purchase Production Master Difficult 1
control system.
Programme: M.Com
SEM IV
Planning expenditure for the month of March 2021.
Factory overheads are
10% of direct wages
20% of works cost
404 Rs. 12,36,000 Rs. 12,09,600 Rs. 12,96,000 Rs. 12,00,000 Rs. 12,09,600 Difficult 1
10% of works cost
It is estimated that selling and distribution
overheads will increase by 50% in March
2021
The company sells goods at 16 2/3%
profit on sales.
The budgeted sales for the month of March
2021. Is ________________
4. Financial
405 Production Cash Sales Master Master Difficult 1
Planning ______________is the basis for preparation of the budgeted profit & loss account and the Budgeted Balance Sheet
Planning expenditure for the month of March 2020.
Factory overheads Rs. 100,000
20% of works cost
10% of works cost
406 Rs.9,60,000 Rs.10,36,000 Rs. 10,56,000 Rs. 9,95,000 Rs. 10,56,000 Difficult 1
It is estimated that administration
overheads will increase by 10% in March
2020
sales
The budgeted sales for the month of March
2020 Is ________________

Planning expenditure for the month of September
2020.
10% of works cost
407 Rs. 168,750 Rs. 150,000 Rs. 135,000 Rs133,750 Rs. 168,750 Difficult 1
20% of works cost
Selling overhead will increase by 25%
cost.
September 2020 Is ________________
4. Financial
408 Forecasting Estimating Expectation Speculation Forecasting Difficult 1
Planning ___________ is a technique that uses historical data as input to make informed estimates that are predictive in determining the direction of future trends
4. Financial When there are more than one limiting
Planning 409 factor __________ technique is applied in Linear Programming ABC Control Just-in-time Simulation Linear programming Difficult 1
budgeting
Planning expenditure for the month of April 2020.
Factory overheads
30% of direct wages
20% of works cost
410 20% of works cost Rs. 101,952 Rs. 100,850 Rs. 150,000 Rs.151,250 Rs. 101,952 Difficult 1
It is estimated that selling and distribution
overheads will increase by 20% in April
2020
The company sells goods at 16 2/3% profit
on sales
The budgeted sales for the month of April
2020 Is ________________

Planning expenditure for the month of October
2020.
10% of works cost
411 Selling and distribution overheads are Rs. 360,000 Rs.270,000 Rs480,000 Rs. 560,000 Rs. 360,000 Difficult 1
20% of works cost
Selling overhead will increase by 25%
sales
October 2020 Is ________________
4. Financial
412 Rs.75,000 & Rs. 65,000 Rs. 70,000 & 60,000 Rs.55,000 & Rs. 45,000 Rs. 70,500 & Rs. 65,500 Rs.75,000 & Rs. 65,000 Difficult 1
Planning Given estimated sales in February, March, April, May and June are Rs.80,000, Rs.70,000,Rs.60,000,Rs.50,000,Rs.40,000. In case of 50% of sales are realized in the next month and balance in the next of next month, determin
4. Financial
413 Current budget Basic budget Labour budget Seasonal budget Current budget Difficult 1
Planning A budget which is established for use over a short period of time and is related to current conditions is
4. Financial If variable and fixed cost at 70% capacity
Planning 414 are Rs.14,000 and Rs.10,000 respectively, Rs. 20,600 Rs.26,000 Rs.26,600 Rs.28,000 Rs.26,000 Difficult 1
total cost at 80% capacity will be
Programme: M.Com
SEM IV
4. Financial ABC Ltd has furnished the following
Planning information for 2,000 unit of a product for
the year 2020: Direct material is Rs.
415 Rs. 5,00,000 Rs.6,00,000 Rs.7,00,000 Rs.8,00,000 Rs.6,00,000 Difficult 1
2,00,000, Direct labour is Rs.1,00,000 and
overhead is Rs.2,00,000 (50% is Fixed).
What will be total cost of 2,500units
4. Financial Which budget is calculated from the
Capital expenditure Research and development
Planning 416 desired ending inventory and the sales Production budget Labour budget Production budget Difficult 1
budget budget
forecast
4. Financial XYZ Ltd has furnished the following
Planning information for 500 unit of a product for
the year 2020: Material is Rs.10,000,
417 Rs. 49,200 Rs.59,200 Rs.44,400 Rs.42,900 Rs. 49,200 Difficult 1
Labour is Rs.5,000 and overhead is Rs.
12,000 (40% is Fixed). What will be total
cost of 1,000 units?
4. Financial P Ltd produces chair. It expects to sell
Planning 4,200 chair at the selling price of Rs.50 per
unit. From the following information find
418 4,000 chair 5,000 chair 6,000 chair 7,000 chair 4,000 chair Difficult 1
out unit required to be produced.
Opening stock is 400 chair, Closing stock is
200 chair.
4. Financial Y ltd produces tables. The company is
Planning interested in presenting its budget for the
next quarter ending 31st March. It expects
to sell 800 tables during the said period at
419 1,000 Tables 2,000 Tables 3,000 Tables 4,000 Tables 1,000 Tables Difficult
the selling price of Rs. 85 per unit from
the follwing information find out unit
required to be produced. Opening stock is
100 unit, Closing stock is 300 unit.
4. Financial Net sales - Total Sales + Variable Opening stock + Closing Net sales - Total variable
420 Fixed asset +Investment Difficult
Planning Formula for calculating Contribution is : variable cost cost stock cost
5. Financial
Policy and Financial decision making is _____ in
421 Risk Prudent Organising Complex Simple Complex Easy 1
Corporate nature.
Strategy
5. Financial
Policy and Drafting financial plan is the responsibility Quality Control
422 Auditor Finance Manager Production Manager Finance Manager Easy 1
Corporate of _____. Manager
Strategy
5. Financial
Policy and Strategic Financial Management always
423 short term view Long term View Medium term View Linear View Long term View Easy 1
Corporate takes a
Strategy
5. Financial
Policy and Risk can be minimised with a proper trade- Long Term and Short Equity Capital and Current Assets and Long Term and Short
424 Debt and Equity Moderate 1
Corporate off between Term Fund Preference Capital Current liabilities Term Fund
Strategy
5. Financial
Policy and Strategic Financial management vision is
425 Historical Conservative Flexible Prospective Prospective Easy 1
Corporate always ------ in nature
Strategy
5. Financial
Policy and The goal of profit maximisation would Cash flow available to Risk of the
426 Earning per share Timing of the returns Earning per share Moderate 1
Corporate result in priority for stock holders Investments
Strategy
5. Financial
______ planning begins with the process
Policy and
427 of deciding on objectives of the Financial Strategic Long term Business Strategic Easy 1
Corporate
organisation
Strategy
5. Financial According to ________ Financial
Policy and management " as an application of general Raymond
428 Joseph L Massie Howard and Upton Ezra Solomon Raymond Chambers Difficult 1
Corporate managerial principles to the area of Chambers
Strategy financial decision making"
5. Financial
Policy and Process of carrying out a plan skillfully is
429 Planning Implementation Strategy Controlling Strategy Easy 1
Corporate a _____.
Strategy
5. Financial
Policy and Strategic Financial Management takes into Contemporary,
430 Structured, Flexible Longterm, Holisitic Shorterm, Conservative Longterm, Holisitic Moderate 1
Corporate A/c _____ and _____ view. Traditional
Strategy
5. Financial
Policy and Financial plan should be _____ to
431 Simple Complex Flexible Fixed Flexible Easy 1
Corporate accommodate changes in circumstances.
Strategy
5. Financial
strategic production strategic Human
Policy and strategic investment strategic marketing strategic investment
432 Strategic Financial Management includes management resource management Moderate 1
Corporate management decisions management decisions management decisions
decisions decisions
Strategy
5. Financial
Policy and Following is not the function of Strategic Financial Capital Expenditure
433 Financial Planning Financial engineering Financial engineering Moderate 1
Corporate Financial Management Controlling Planning
Strategy
5. Financial
Policy and Strategic Financial management outlook is
434 Introspective Reciprocal Retrospective Outward looking Outward looking Moderate 1
Corporate ------ in nature
Strategy
5. Financial
Policy and Multi-Pronged and Framed by Middle Less specific than Multi-Pronged and
435 Corporate strategy is Rigid and dynamic Easy 1
Corporate integrated level Management objectives integrated
Strategy
5. Financial
Strategic Financial Management helps the
Policy and Net profit and Net Current and Non current
436 firm decide the capital structure and the Risk and Return Debt Equity Ratio Risk and Return Easy 1
Corporate sales assets
right balance between
Strategy
5. Financial
require an integrated involves high
Policy and Involve the scope of an involve major change in Involve the scope of an
437 Financial strategies are approach to degree of Difficult 1
Corporate organisations activities the productions organisations activities
management uncertanity
Strategy
Programme: M.Com
SEM IV
5. Financial The market price
The books value of the The market price per share
Policy and Shareholder wealth in a firm is represented The number of people per share of the The amount of salary
438 firm's assets less the book of the firm's common Moderate 1
Corporate by employed in the firm firm's common paid to frm's employees
value of its liabilities stock
Strategy stock
5. Financial
Policy and Profit maximisation does not take into Cash flow and stock
439 Risk and cash flow Risk and EPS EPS and stock price Risk and cash flow Moderate 1
Corporate consideration price
Strategy
5. Financial According to _________ Financial
Policy and management " is the operational activity of
Raymond
Corporate 440 a business that is responsible for obtaining Joseph L Massie Howard and Upton Ezra Solomon Joseph L Massie Difficult 1
Chambers
Strategy and effectively utilising the funds
necessary for efficient opeartions.
5. Financial
Policy and Plan to achieve a particular purpose is
441 Planning Goal Evaluation Strategy Strategy Easy 1
Corporate _____.
Strategy
5. Financial
Policy and Strategic Financial Management employs Wealth Creation & Contemporary & Contemporary &
442 Structured & Flexible Unstructured and Rigid Difficult 1
Corporate _____ and ____ techniques. Capital appreciation Traditional Traditional
Strategy
5. Financial
Policy and Competitive Pathfinder for future Clash of interest and Clash of interest and
443 Proactive Moderate 1
Corporate Following is not the benefit of Strategic advantage opportunities loyalties loyalties
Strategy Management
5. Financial
Policy and
444 One Two Three Six Three Difficult 1
Corporate Strategy decisions are required at ------
Strategy levels in a business
5. Financial
Policy and _______ control is the management of
445 Operational Long term Comprehensive Strategic Operational Medium 1
Corporate daily activities in accordance with strategic
Strategy and tactical plan
5. Financial According to ___ Financial management is
Policy and concerned with efficient use of an Raymond
446 Joseph L Massie Howard and Upton Ezra Solomon Ezra Solomon Difficult 1
Corporate important economic resource namely Chambers
Strategy capital funds
5. Financial
Policy and Which one of the following management Overall objective of Overall objective of the
447 Outsourcing Organisational structure Recent annual budgets Moderate 1
Corporate considerations is usually addressed first in the firm firm
Strategy strategic planning?
5. Financial
Policy and which of the following activities would New product
448 Capital budgeting Mergers Material procurement Material procurement Easy 1
Corporate likely not be a consideration in strategic development
Strategy planning
5. Financial
procurement and
Policy and procurement of expenditure of procurement and effective
449 safe custody of funds only effective utilisation of Moderate 1
Corporate finance only funds only utilisation of funds
funds
Strategy Finance function involves
5. Financial
Policy and Which of the following functions of
450 Planning Organizing Directing Control Control Easy 1
Corporate Management involves comparing actual
Strategy results with budgeted results?
5. Financial
Policy and Cash inflows and Allocation of
451 Financial management Finance Financial management Easy 1
Corporate Management of all matters related to an outflows resources
Strategy organisation's finances is called
5. Financial
Policy and Corporate Social Matching income Using business assets
452 Wealth maximisation Wealth maximisation Easy 1
Corporate The most important goal of strategic Responsibility and expenditure effectively
Strategy financial management is
5. Financial The book value of
The market price per The market price per share
Policy and The number of people the firm's assets The amount of salary paid
453 share of the firm's of the firm's common Easy 1
Corporate Shareholder wealth in a firm is employed in the firm less the book value to its employees
common stock stock
Strategy represented by of its liabilities
5. Financial
Policy and
454 Long term Operational Short term Informal Long term Easy 1
Corporate
Strategy Strategic planning is
5. Financial
Policy and Corporate Social Corporate Social
455 Risk of uncertainity Long term returns Time value of money Moderate 1
Corporate The wealth maximisation principle of Responsibility Responsibility
Strategy financial management doesn’t consider
5. Financial
Policy and
456 Planning Financial Audit Operation Control Financial Audit Easy 1
Corporate Following is not the part of strategic
Strategy decision making process
5. Financial
Policy and
457 Suitability Feasibility Ability Acceptability Ability Difficult 1
Corporate According to Johnson and Scholes criteria
Strategy for evaluating strategies doesn’t include
5. Financial
Policy and
458 Functional strategy Business strategy Corporate strategy Social strategy Functional strategy Moderate 1
Corporate
Strategy Cash management strategy is a type of
5. Financial
Policy and
459 Functional strategy Business strategy Corporate strategy Social strategy Business strategy Moderate 1
Corporate
Strategy Competitive strategy comes under
5. Financial
Policy and
460 Functional strategy Business strategy Corporate strategy Social strategy Business strategy Moderate 1
Corporate
Strategy Diversification strategy is a part of
5. Financial
Policy and Single-Functional Deals with external Single-Functional
461 Long term prosperity Future oriented Moderate 1
Corporate following is not the feature of Strategic consequences environment consequences
Strategy decisions
5. Financial
Policy and
462 Batch tracking Sensitivity analysis ABC Analysis Just in Time Inventory Sensitivity analysis Moderate 1
Corporate Following is not the type of Inventory
Strategy management strategy
Programme: M.Com
SEM IV
5. Financial
Policy and Short term Financial Long term Short term Production Long term marketing Short term Financial
463 Easy 1
Corporate Strategy Financial strategy strategy strategy Strategy
Strategy Working capital management is
5. Financial
Policy and Compliance of legal Distribution and retention Compliance of legal
464 raising Finance Investment Moderate 1
Corporate Following is not the element of Financial framework of Profit framework
Strategy strategy formulation
5. Financial
Policy and The following issues need to be considered Required level of Constant Payout Risk profile of Investors Constant Payout ratio of
465 Tax implications Difficult 1
Corporate when setting criteria for future financing gearing ratio of dividend and management dividend
Strategy strategies, except
5. Financial
Policy and Working capital Capital expenditure Working capital financing
466 Dividend policy Capital structure policy Easy 1
Corporate financing policy policy policy
Strategy Headging approach deals with
5. Financial
Policy and Under -------- credit sales are made only to General credit
467 Lenient Credit policy Dicount sales policy Stringent credit policy Stringent credit policy Moderate 1
Corporate those customers whose credit worthiness policy
Strategy has been tested and proved good.
5. Financial
Policy and Models of cash Collection and Payment Liquidation of
468 Cash Budget Liquidation of Investment Moderate 1
Corporate Following is not the tool of Cash management float analysis Investment
Strategy management policy
5. Financial
Policy and
469 Liquid assets Fixed Assets Goodwill Reserves Liquid assets Easy 1
Corporate Under Securitisation policy illiquid assets
Strategy are transformed into
5. Financial
Policy and Modigliani and Miller
470 Gordon's Model Walter's Model Baumol's Model Baumol's Model Difficult 1
Corporate _______ is not the model of Dividend Model
Strategy policy
Programme: M.Com
SEM IV
Programme: M.Com
SEM IV
Programme: M.Com
SEM IV
Programme: M.Com
SEM IV
Programme: M.Com
SEM IV
Programme: M.Com
SEM IV
Summary
Module No. of Questions
1. Types of
Financing 50
2. Investment
Decision 110
3. Management of
Working Capital 170
4. Financial
Planning 90
5. Financial Policy
and Corporate
Strategy 50
Total 470

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Programme: M.

1. Types of in which of the following arrangement

4. Financial A company estimates the following

4. Financial A document which sets out the

4. Financial _______ budget has to be prepared before

4. Financial Sales Sales quantity-

4. Financial A company estimates the following

4. Financial A company estimates the following

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