This quiz works best with JavaScript enabled. Home > Corporate Finance > Working Capital Management – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Working Capital Management Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Short term loan can be classified as ..... A) Permanent asset. B) Temporary asset. C) Permanent source. D) Temporary source. E) Spontaneous source. Show Answer Correct Answer: D) Temporary source. 2. Factoring involves ..... A) Providing short term loan. B) Providing long term loan. C) Financing of export receivables. D) Management of receivables of borrowier. Show Answer Correct Answer: D) Management of receivables of borrowier. 3. Interest on corporate bonds is usually paid A) Monthly basis. B) Annual. C) Six monthly. D) Only on maturity. Show Answer Correct Answer: C) Six monthly. 4. EOQ determine the order size when A) Total cost is minimum. B) Total number of order is least. C) Total inventory cost are minimum. D) None of above. Show Answer Correct Answer: C) Total inventory cost are minimum. 5. In the context of current assets, what does the term 'liquidity' refer to? A) The ease of converting assets into cash without loss. B) The total value of assets available for sale. C) The long-term value of assets. D) The market value of inventory. Show Answer Correct Answer: A) The ease of converting assets into cash without loss. 6. Which of the following is not included in cost of inventory A) Purchasing cost. B) Transportation cost. C) Import duty. D) Selling cost. Show Answer Correct Answer: D) Selling cost. 7. Cheques deposited in bank may not be available for immediate use due to A) Payment float. B) Receipt float. C) Net float. D) Playing with float. Show Answer Correct Answer: B) Receipt float. 8. Which of the following would decrease a firm's cash conversion cycle? A) Increase the inventory days. B) Increase the accounts receivable day. C) Increase the accounts payable days. D) Increase the cash days. Show Answer Correct Answer: C) Increase the accounts payable days. 9. Which of the following is not a benefit of carrying inventory A) Reduction in ordering cost. B) Avoiding lost sales. C) Reduction carrying cost. D) Avoiding production shortage. Show Answer Correct Answer: C) Reduction carrying cost. 10. Which of the following is not an element of credit policy A) Credit terms. B) Collection policy. C) Cash discount. D) Sales price. Show Answer Correct Answer: D) Sales price. 11. Collection float is made up of all of the following EXCEPT ..... A) Disbursement float. B) Processing float. C) Mail float. D) Availability float. Show Answer Correct Answer: A) Disbursement float. 12. The amount of current assets that varies with seasonal requirements is referred to as ..... working capital A) Permanent. B) Net. C) Temporary. D) Gross. Show Answer Correct Answer: C) Temporary. 13. Working capital management involves the management of all of a firm's assets and liabilities. A) True. B) False. Show Answer Correct Answer: B) False. 14. What comprises a company's working capital? A) Fixed assets. B) Long-term liabilities. C) Current assets and current liabilities. D) Shareholder's equity. Show Answer Correct Answer: C) Current assets and current liabilities. 15. Which of the following is true of net working capital? A) When current assets of a firm exceed its current liabilities, a firm is said to have negative net workingcapital. B) When current assets of a firm are less than its total assets, a firm is said to have positive net workingcapital. C) When current assets of a firm exceed its current liabilities, a firm is said to have positive net workingcapital. D) When current assets of a firm exceed its total assets, the firm is said to have negative net workingcapital. Show Answer Correct Answer: C) When current assets of a firm exceed its current liabilities, a firm is said to have positive net workingcapital. 16. A firm following an aggressive working capital strategy would A) Hold substantial amount of fixed assets. B) Minimize the amount of short-term borrowing. C) Finance fluctuating assets with long-term financing. D) Minimize the amount of funds held invery liquid assets. Show Answer Correct Answer: D) Minimize the amount of funds held invery liquid assets. 17. Which is not an example of inventory A) Machine. B) Raw material. C) Work in progress. D) Finished goods. Show Answer Correct Answer: A) Machine. 18. Negative working Capital represents that: A) Current Liabilities > Current Assets. B) Current Liabilities < Current Assets. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Current Liabilities > Current Assets. 19. Securitization is related to conversion of A) Receivable. B) Stock. C) Investment. D) Creditors. Show Answer Correct Answer: A) Receivable. 20. Which is not a source of working capital A) Sale of non current assets. B) Sale of current assets. C) Sale of additional shares of capital stock. D) Long term borrowing. Show Answer Correct Answer: B) Sale of current assets. ← 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 6Working Capital Management Quiz 7Working Capital Management Quiz 9Working Capital Management Quiz 10Working Capital Management Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books