This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... are the creditors' claims to the assets of a business. A) Liabilities. B) Owner's equity. C) Equity. D) Assets. Show Answer Correct Answer: A) Liabilities. 2. Which is not a comparison shopping term? A) Cryptocurrency. B) Quality over quantity. C) Services. D) Saving in the long run. E) Discount amounts. Show Answer Correct Answer: A) Cryptocurrency. 3. This is a legal business entity created by the government. A) Sole Proprietorship. B) Partnership. C) Corporation. D) Cooperative. Show Answer Correct Answer: C) Corporation. 4. True or False, Clothing is usually considered a want. A) False. B) True. Show Answer Correct Answer: B) True. 5. While liabilities refers to ..... A) Expenses. B) Loans or debts. C) Bill payments or remittances. D) All of the above. Show Answer Correct Answer: D) All of the above. 6. A proper balance between risk and return is ..... A) Finance manager. B) Risk-Return trade off. C) Liquidity. D) Profitability. Show Answer Correct Answer: B) Risk-Return trade off. 7. Alpha Company's net accounts receivable were P500, 000 at December 31, 2012 and P600, 000 at December 31, 2013. Net cash sales for 2012 were P200, 000. The accounts receivable turnover for 2013 was 5.0. What were Alpha's net sales for 2013? A) 5, 500, 000. B) 2, 950, 000. C) 3, 200, 000. D) 3, 000, 000. Show Answer Correct Answer: B) 2, 950, 000. 8. It is a financial statement that shows the company's cash receipts and cash payments during a specific period of time. A) Income Statement. B) Balance Sheet Statement. C) Statement of Cash Flow. D) Statement of stockholder's Equity. Show Answer Correct Answer: C) Statement of Cash Flow. 9. It means that the main goal of financial management is to maximize not profit alone, but the maximization of overall value of the firm. A) VALUATION APPROACH. B) MAXIMIZATION OF SHAREHOLDERS' WEALTH. Show Answer Correct Answer: A) VALUATION APPROACH. 10. The total money earned in your paycheck before taxes and deductions is A) Gross Pay. B) Net Pay. C) "The Bag". D) None of above. Show Answer Correct Answer: A) Gross Pay. 11. What is the present value of a stream of annual end-of-the-year annuity cash flows if the discount rate is 0%, and the cash flows of $ 50 last for 20 years? A) More than $ 1, 000. B) This question cannot be answered because we have an interest rate of 0.0%. C) Less than $ 1, 000. D) Exactly $ 1, 000. Show Answer Correct Answer: D) Exactly $ 1, 000. 12. A limited partnership provides limited liability to A) All general partners. B) Only limited partners responsible for day to day management of the firm. C) Only to limited partners who do not participate in the management of the business. D) All partners. Show Answer Correct Answer: C) Only to limited partners who do not participate in the management of the business. 13. Financial leverage refers to the rate of change in earnings per share for a given change in earnings ..... A) Before tax. B) Before interest. C) Before interest and tax. D) After interest and tax. Show Answer Correct Answer: C) Before interest and tax. 14. Which of the following is LEAST likely to fall within financial management? A) The dividend payment to shareholders is increased. B) Funds are raised to finance an investment project. C) Surplus assets are sold off. D) A report is produced comparing actual results to budget. Show Answer Correct Answer: D) A report is produced comparing actual results to budget. 15. Corporate spending function that trying to get funds with minimal costs and the most favourable terms is called ..... A) The function to use. B) The function to allocate. C) The function of meeting funding. D) The function of management. Show Answer Correct Answer: C) The function of meeting funding. 16. The profit maximization objective has been criticized on the basis of: A) Ignore risk factor. B) Ignore time value of money. C) Ambiguity. D) All of these. Show Answer Correct Answer: D) All of these. 17. What does it mean to create a barbell strategy A) Match high risk and low risk investments. B) Take the high risk investments only. C) Take the low risk investments only. D) Establish a 70/30 split of your investmetns. E) Incorporate real estate into your investment portfolio. Show Answer Correct Answer: A) Match high risk and low risk investments. 18. A financial statement that shows the "projected costs" for things such as:Equipment & Supplies, Furniture & Fixtures, Remodeling, and Salaries/Legal Fees is called a: A) Payroll Sheet. B) Startup Cost Statement. C) Income Statement. D) Balance Sheet. Show Answer Correct Answer: B) Startup Cost Statement. 19. Wait Company reported the following on its income statement:Income before taxes:P 400, 000Income tax expense:100, 000Net income:P 300, 000An analysis of the income statement revealed that interest expense was P100, 000. Wait Company's times interest earned (TIE) was A) 3 times. B) 4 times. C) 5 times. D) 2 times. Show Answer Correct Answer: C) 5 times. 20. Mixture of different investment is called A) Capital structure. B) Financial system. C) Mixture of Investment. D) None of these. Show Answer Correct Answer: C) Mixture of Investment. 21. A ..... is a broad term describing any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives ..... are typically defined by having transparent pricing, basic regulations on trading, costs and fees, and market forces determining the prices of securities that trade. A) Financial Market. B) Public Market. C) Market. D) Bank. Show Answer Correct Answer: A) Financial Market. 22. Keeping in view the high rate of Income Tax the company should give priority to ..... capital. A) Debt. B) Preference. C) Owner. D) Equity. Show Answer Correct Answer: A) Debt. 23. Variable cost in an organization A) Remains constant. B) Does not change with volume of production. C) Be fixed according to the rate of growth. D) Changes with the volume of production. Show Answer Correct Answer: D) Changes with the volume of production. 24. The bank provides funds to their customers by purchasing or discounting bills of exchange. A) Overdraft. B) Cash credit. C) Bills of exchange. D) None of above. Show Answer Correct Answer: C) Bills of exchange. 25. What is the compound value if you invest Rs. 1, 000 at 10% for 3 years? A) Rs. 13.31. B) Rs. 1.331. C) Rs. 133.1. D) Rs. 1, 331. Show Answer Correct Answer: D) Rs. 1, 331. 26. TVM stands for what? A) Total Valuable of Money. B) Total Value of Management. C) Time Value of Money. D) Time Valuable of Management. Show Answer Correct Answer: C) Time Value of Money. 27. Which personal finance concept is correct? A) Do budgeting for expenses and income. B) Carry out proportional budgeting for Social, Investment, Installment & Operational posts. C) Carry out budgeting in managing investments to support debt repayments. D) Increase your social posts compared to your existing income each month. E) Money is everything ~ No Money No Party. Show Answer Correct Answer: B) Carry out proportional budgeting for Social, Investment, Installment & Operational posts. 28. Why should you keep bank records up to date A) Tax purposes. B) You shouldn't. C) So you could see your financial progress. D) Grandpa Morris says so. E) So you have an understanding of the financial system. Show Answer Correct Answer: A) Tax purposes. 29. The basic objective of finance manager is A) Maximising business's profit. B) Maximising size of organization. C) Maximising wealth of organization. D) All of the above. Show Answer Correct Answer: C) Maximising wealth of organization. 30. ..... is financial institution. A) LIC. B) Commercial bank. C) SEBI. D) RBI. Show Answer Correct Answer: B) Commercial bank. Next →Related QuizzesManagement QuizzesFinance QuizzesFinancial Management Quiz 2Financial Management Quiz 3Financial Management Quiz 4Financial Management Quiz 5Financial Management Quiz 6Financial Management Quiz 7Financial Management Quiz 8Financial Management Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books