This quiz works best with JavaScript enabled. Home > Corporate Finance > Working Capital Management – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Working Capital Management Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When Core Working Capital plus some part of temporary is financed from long term funds then it is known as A) Aggressive approach. B) Conservative approach. C) Matching approach. D) None of these. Show Answer Correct Answer: B) Conservative approach. 2. What is value of Creditors for expenses in Q.1 of test A) 25, 230. B) 23, 520. C) 23, 250. D) None of these. Show Answer Correct Answer: C) 23, 250. 3. What is value of Debtors in Q.1 of test A) 201, 000. B) 112, 000. C) 102, 000. D) None of these. Show Answer Correct Answer: C) 102, 000. 4. What is the meaning of the term 2/10 net 30? A) If the invoice is paid within 10 days, a 2% discount can be taken. If the invoice is paid between 11 and 29 days, a 1% discount can be taken. After 30 days, the full invoice is due. B) If the invoice is paid within 2 days, a 10% discount can be taken; otherwise the full invoice is due in 30 days. C) If the invoice is paid within 2 days, a 10% discount can be taken; otherwise a 2% discount can be taken if the invoice is paid in 30 days. D) If the invoice is paid within 10 days, a 2% discount can be taken; otherwise the full invoice is due in 30 days. Show Answer Correct Answer: D) If the invoice is paid within 10 days, a 2% discount can be taken; otherwise the full invoice is due in 30 days. 5. ) If a supplier is offering trade credit of 1/10 net 30, and a buyer chooses not to take the discount, when should they pay, assuming that they wish to stay on good terms with the supplier? A) Any time before day 10. B) On day 10. C) On day 30. D) Any time after day 30. Show Answer Correct Answer: C) On day 30. 6. What are the aspect of working capital management? A) Inventory management. B) Cash management. C) Receivable management. D) All of above. Show Answer Correct Answer: D) All of above. 7. Which of the following is related to Receivable management A) Cash Budget. B) EOQ METHOD. C) Ageing schedule. D) All of the above. Show Answer Correct Answer: C) Ageing schedule. 8. Cost of insurance and taxes are included in A) Cost of ordering. B) Carrying cost. C) Setup cost. D) Cost of shortage. Show Answer Correct Answer: B) Carrying cost. 9. Which of the following is not a factor that affects a company's working capital needs? A) Seasonality of sales. B) Supplier credit terms. C) Economic conditions. D) Management's salary. Show Answer Correct Answer: D) Management's salary. 10. Account receivable can be classified as ..... A) Permanent asset. B) Temporary asset. C) Permanent source. D) Temporary source. E) Spontaneous source. Show Answer Correct Answer: B) Temporary asset. 11. The following classes of costs arre usually involved in inventory decision except A) Cost of ordering. B) Carrying cost. C) Cost of shortages. D) Machining cost. Show Answer Correct Answer: D) Machining cost. 12. Debt to total assets of a firm is 0.2. the debt to equity ratio will be A) .8. B) .25. C) 1. D) .75. Show Answer Correct Answer: B) .25. 13. The economic order quantity formula is taken used A) Differential calculus. B) Integral calculus. C) Vector calculus. D) Multivariate analysis. Show Answer Correct Answer: A) Differential calculus. 14. What is Cost of stock Raw Material in Q.1 of test A) 414, 000. B) 144, 000. C) 17, 28000. D) None of these. Show Answer Correct Answer: B) 144, 000. 15. What are people who or sell in market to make profits called? A) Hedgers. B) Speculators. C) Arbitrators. D) None of the above. Show Answer Correct Answer: B) Speculators. 16. The operating cycle will be determined by ..... A) The length of time for collecting trade receivables and the time for paying trade payables. B) The length of payment of accounts payable and the length of inventory life. C) The length of the collection of trade receivables and the length of the inventory life. D) Not the correct answer. Show Answer Correct Answer: C) The length of the collection of trade receivables and the length of the inventory life. 17. Account payable can be classified as ..... A) Permanent asset. B) Temporary asset. C) Permanent source. D) Temporary source. E) Spontaneous source. Show Answer Correct Answer: E) Spontaneous source. 18. System of procuring goods when required, is known as A) Free of board. B) Always better control. C) Just in time. D) Economic order quantity. Show Answer Correct Answer: C) Just in time. 19. Assume a company's current ratio is less than 1. If the company pays current liabilities with cash, the new current ratio will ..... A) Increase. B) Decrease. C) Remain the same. D) Cannot be determined with the information given. Show Answer Correct Answer: B) Decrease. 20. Ageing schedule incorporated the relationship between A) Creditors and days outstanding. B) Debtors and days outstanding. C) Average age of directors. D) Average age of all employees. Show Answer Correct Answer: B) Debtors and days outstanding. ← PreviousNext →Related QuizzesWorking Capital Management Quiz 1Working Capital Management Quiz 2Working Capital Management Quiz 3Working Capital Management Quiz 4Working Capital Management Quiz 5Working Capital Management Quiz 7Working Capital Management Quiz 8Working Capital Management Quiz 9Working Capital Management Quiz 10Working Capital Management Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books