This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 37 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 37 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following statements concerning net income is MOST correct? A) Net income represents income that may be reinvested in the firm or distributed to its owners. B) Net income represents cash available to pay dividends. C) Net income represents sales minus operating expenses at a specific point in time. D) Negative net income reduces a company's cash balance. Show Answer Correct Answer: A) Net income represents income that may be reinvested in the firm or distributed to its owners. 2. Head of finance department A) Finance manager. B) Line manager. C) Top level manager. D) None of these. Show Answer Correct Answer: A) Finance manager. 3. Insurance companies have a great deal of money to invest because A) There profit margins are so high. B) Because they are reluctant to cover insurable losses. C) Because they must hold large reserves to pay potential claims. D) Insurance do not actually have large sums to invest. Show Answer Correct Answer: C) Because they must hold large reserves to pay potential claims. 4. Which of the following is the second process in financial management A) Carrying out financial plan. B) Setting goals. C) Reviewing and revising the progress. D) Evaluating financial status. Show Answer Correct Answer: D) Evaluating financial status. 5. Your employer has agreed to place year-end deposits of $ 1, 000, $ 2, 000, and $ 3, 000 into your retirement account. The $ 1, 000 deposit will be one year from today, the $ 2, 000 deposit two years from today, and the $ 3, 000 deposit three years from today. If your account earns 5% per year, how much money will you have in the account at the end of year three when the last deposit is made? A) $ 6, 202.50. B) $ 6, 000. C) $ 6, 727.88. D) $ 5, 357.95. Show Answer Correct Answer: A) $ 6, 202.50. 6. ..... are documents that summarize the changes resulting from business transactions that occur during an accounting period. A) Current assets. B) Income statements. C) Accounts payables. D) Financial statements. Show Answer Correct Answer: D) Financial statements. 7. Anything that you spend money on. A) Expense. B) Withdrawal. C) Deposit. D) Income. Show Answer Correct Answer: A) Expense. 8. Which of the following best describes the goal of the firm? A) The maximization of the total market value of the firm's common stock. B) Profit maximization. C) Risk minimization. D) None of the above. Show Answer Correct Answer: A) The maximization of the total market value of the firm's common stock. 9. Markets in which assets are brought or sold for "on-the-spot" delivery (literally, within a few days). A) Financial asset market. B) Physical asset market. C) Futures market. D) Spot markets. Show Answer Correct Answer: D) Spot markets. 10. The foreign exchange market is where currencies are bought and sold, and exchange rates are determined. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 11. What are the two main sources of finance in financial management? A) Short-term and Long-term. B) Equity and Debt. C) Internal and External. D) Assets and Liabilities. Show Answer Correct Answer: B) Equity and Debt. 12. A ..... is a security that pays for an infinite amount of time. A) Annuity. B) Money market instrument. C) Capital market instrument. D) Perpetuity. Show Answer Correct Answer: D) Perpetuity. 13. In cash flow analysis, the cash flows from operating activities A) Are the cash effects of transactions that create revenues and expenses. B) Generally relate to changes in non-current assets. C) Generally relate to changes in long-term liabilities and stockholders' equity accounts. D) Are irrelevant. Show Answer Correct Answer: A) Are the cash effects of transactions that create revenues and expenses. 14. ..... is the study of how money is used by individuals, societies and nations to meet people's needs. A) Income. B) Economics. C) Debit. D) Debt. Show Answer Correct Answer: B) Economics. 15. Which of the following is an example of a need for most people? A) A big-screen TV. B) An expensive car. C) Designer jeans. D) A place to live. Show Answer Correct Answer: D) A place to live. 16. EBIT is an important measure of a company, because..... A) Shows free cash. B) Because it shows the final profit of a company. C) Shows the profitability of a company in terms of operations. D) Measuring 'earnings' before deducting indirect costs and transfers. Show Answer Correct Answer: B) Because it shows the final profit of a company. 17. What is included in financial management according to the traditional approach? A) Arranging finance. B) Using finance effectively. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: A) Arranging finance. 18. Investment decisions made by the company's Financial Manager are reflected in the balance sheet? A) Earning Per Share. B) Balance Sheet. C) Active. D) Passive. Show Answer Correct Answer: C) Active. 19. The fixed capital requirement of a trading concern in comparison to a manufacturing concern will be A) Same. B) More. C) Less. D) Not applicable. Show Answer Correct Answer: C) Less. 20. The decisions of investing in long term or fixed assets on the basis of cost-benefit analysis or risk-return analysis are known as: A) Working capital decisions. B) Financial Decisions. C) Capital budgeting decisions. D) None of these. Show Answer Correct Answer: C) Capital budgeting decisions. 21. Matthew, Abigail, and Mattie are running a lemonade stand. They are trying to understand their costs. Can you explain to them the difference between fixed and variable costs in the context of their lemonade stand? A) Fixed costs are expenses like the cost of the lemonade stand and the initial purchase of cups that do not change regardless of the number of lemonades they sell, while variable costs are expenses like the cost of lemons and sugar that fluctuate based on the number of lemonades they sell. B) Fixed costs are expenses like the cost of the lemonade stand that are incurred only in the short term, while variable costs like the cost of lemons and sugar are expenses that are incurred over a longer period of time. C) Fixed costs are expenses like the cost of the lemonade stand that increase with the number of lemonades they sell, while variable costs like the cost of lemons and sugar are expenses that remain constant regardless of the number of lemonades they sell. D) Fixed costs are expenses like the cost of the lemonade stand that are directly related to the number of lemonades they sell, while variable costs like the cost of lemons and sugar are expenses that are unrelated to the number of lemonades they sell. Show Answer Correct Answer: A) Fixed costs are expenses like the cost of the lemonade stand and the initial purchase of cups that do not change regardless of the number of lemonades they sell, while variable costs are expenses like the cost of lemons and sugar that fluctuate based on the number of lemonades they sell. 22. The project with high pay back period will be A) Rejected. B) Selected. Show Answer Correct Answer: A) Rejected. 23. Turnover of capital of trading concern compare with manufacturing concern is A) Higher. B) Lower. C) Equal. D) None of these. Show Answer Correct Answer: B) Lower. 24. The three broad approaches to company valuation do not include A) Stock market valuation. B) Asset valuation. C) Inventory valuation. D) Future earnings valuation. Show Answer Correct Answer: C) Inventory valuation. 25. Working Capital is..... A) Profits received by the owner. B) Initial paid up capital. C) Revenue dikurangi COGS. D) Current Asset dikurangi Current Liability. Show Answer Correct Answer: D) Current Asset dikurangi Current Liability. 26. Individuals are often savers because they wish to save for such things as retirement, a down payment on a home or graduate school. A) False. B) True. Show Answer Correct Answer: B) True. 27. Trading on equity is possible on A) Debentures. B) Preference shares. C) Equity shares. D) Debentures and preference shares. Show Answer Correct Answer: A) Debentures. 28. The Chief Executive Officer approves the company's strategies, goals, and budgets. A) False. B) True. Show Answer Correct Answer: A) False. 29. "I want to practice every night so I can do well in my game, " is not ..... A) Relevant. B) Timely. C) Attainable. D) Specific. Show Answer Correct Answer: D) Specific. 30. What does the M in SMART stand for? A) Meaningless. B) Measurable. C) Marvelous. D) Memorable. Show Answer Correct Answer: B) Measurable. ← PreviousNext →Related QuizzesManagement QuizzesFinance QuizzesFinancial Management Quiz 1Financial Management Quiz 2Financial Management Quiz 3Financial Management Quiz 4Financial Management Quiz 5Financial Management Quiz 6Financial Management Quiz 7Financial Management Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books