This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 71 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 71 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Earning per share is calculated as A) EBIT/No of Equity Shares. B) PAT/ Total Shareholders. C) Earning available to the Equity shareholders/No of Shares. D) Earning available to the Equity shareholders/No of Shares holders. Show Answer Correct Answer: C) Earning available to the Equity shareholders/No of Shares. 2. BANK OVERDRAFT IS A FORM OF A) SHORT TERM FUNDS. B) LONG TERM FUNDS. C) BOTH. D) NONE OF THE ABOVE. Show Answer Correct Answer: A) SHORT TERM FUNDS. 3. What is an agreement between a lender and a borrower, who promises to repay the lender at a later date, with interest? A) Credit. B) Debt. C) Investment. D) Savings. Show Answer Correct Answer: A) Credit. 4. The higher the interest rate affects the time value rate of an investment by increasing the amount you will make. This describes which factor. A) Money. B) Time. C) Interest rate. D) None of above. Show Answer Correct Answer: C) Interest rate. 5. Peyton is running a small business. She is confused about the difference between profit and cash flow. Can you explain it to her? A) Profit is the difference between revenue and expenses, while cash flow is the amount of cash or cash equivalents that flow in and out of Peyton's business. B) Profit is the amount of cash that flows in and out of Peyton's business, while cash flow is the difference between revenue and expenses. C) Profit is the amount of money Peyton's business has in the bank, while cash flow is the amount of money her business makes. D) Profit and cash flow are the same thing in Peyton's business. Show Answer Correct Answer: A) Profit is the difference between revenue and expenses, while cash flow is the amount of cash or cash equivalents that flow in and out of Peyton's business. 6. The purpose of studying financial statements is ..... A) To mechanically build portfolio analysis. B) To understand those portions of the statements that have relevance for financial decision making. C) To primarily investigate all portions of the statements that have relevance for dividend policy. D) To mechanically learn how to read and understand footnotes. Show Answer Correct Answer: B) To understand those portions of the statements that have relevance for financial decision making. 7. When you get a job you are required to complete a ..... form. A) W-4 and I-9. B) W-2 and I-9. C) 1040 and I-9. D) 1040 EZ Form and I-9. Show Answer Correct Answer: A) W-4 and I-9. 8. Which of the following do you NOT need to bring on your first day of work? A) Birth cirtificate. B) Drivers license. C) W-4 form. D) Passport. E) I-9 form. Show Answer Correct Answer: A) Birth cirtificate. 9. A trend is then determined by comparing percentage relationships. Base on the trends, interpretation, conclusions, and implications are drawn. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 10. The method of converting the amount of the future cash into an amount of cash and cash equivalents value in present is known as A) A. Compounding. B) B. Annuity. C) C discounting. D) D. None of these. Show Answer Correct Answer: C) C discounting. 11. Which is not the current assets? A) Stock. B) Bills receivable. C) Debtors. D) Goodwill. Show Answer Correct Answer: D) Goodwill. 12. Which of the following is NOT an example of annuity cash flows? A) Regular equal monthly rent payments. B) Equal annual deposits into a retirement account. C) The $ 50 of gasoline you put into your car every two weeks on pay day. D) All of the examples above are annuity cash flows. Show Answer Correct Answer: D) All of the examples above are annuity cash flows. 13. To manage school finances effectively, the financial managers should anticipate capital expenditures and maximize maintenance costs. A) True. B) False. Show Answer Correct Answer: B) False. 14. Urgency method is suitable for short term projects A) False. B) True. Show Answer Correct Answer: B) True. 15. The tool used by companies to assess the company's financial performance based on comparative data for each item in the financial report is called: A) Balance Sheet & Profit and Loss. B) Activity Ratio. C) Money turnover ratio. D) Financial Ratio Analysis. Show Answer Correct Answer: D) Financial Ratio Analysis. 16. A financial manager must choose between four alternative Assets 1, 2, 3, and 4. Each asset costs $ 35, 000 and is expected to provide earnings over a 3-year period as described below:Asset 1:Year 1-$ 21, 000 ; Year 2-$ 15, 000 ; Year 3-$ 6, 000 Asset 2:Year 1-$ 9, 000 ; Year 2-$ 15, 000 ; Year 3-$ 21, 000Asset 3:Year 1-$ 3, 000 ; Year 2-$ 20, 000 ; Year 3-$ 19, 000Asset 4:Year 1-$ 6, 000 ; Year 2-$ 12, 000 ; Year 3-$ 12, 000Which asset would the financial manager choose? A) Asset 3. B) Asset 4. C) Asset 2. D) Asset 1. Show Answer Correct Answer: C) Asset 2. 17. What is a potential consequence of poor financial management for a business? A) Enhanced market reputation. B) Increased profitability. C) Insufficient cash flow. D) Higher employee morale. Show Answer Correct Answer: C) Insufficient cash flow. 18. One example of cash disbursement from financing activities is A) Paycheck. B) Dividend payments. C) Payment of taxes. D) Vehicle purchase. Show Answer Correct Answer: B) Dividend payments. 19. Occurs when a business sells its stocks or bonds directly to savers, without going through any type of financial institution. A) Direct transfer. B) Transfer through Investment Banks. C) Transfer Through a Financial Intermediary. D) None of above. Show Answer Correct Answer: A) Direct transfer. 20. Selected information from the accounting records of R Company is as follows:Net sales for 2020-P800, 000Cost of goods sold for 2020-500, 000Inventory, December 31, 2019-200, 000Inventory, December 31, 2020-156, 000P's inventory turnover for 2020 is A) 2.88 times. B) 3.00 times. C) 3.57 times. D) 3.77 times. Show Answer Correct Answer: A) 2.88 times. 21. In the grocery store, the food displays at the end of the aisle are the best buys. A) Fiction. B) Fact. Show Answer Correct Answer: A) Fiction. 22. Companies (A) and (B) have the same tax rate, sales, total assets, and basic earning power. Both companies have positive net incomes. Company (A) has a higher debt ratio and, therefore, a higher interest expense. Which of the following statements is CORRECT? A) Company (A) has a lower equity multiplier. B) Company (A) pays more in taxes. C) Company (A) has more net income. D) Company (A) has a lower times interest earned (TIE) ratio. Show Answer Correct Answer: D) Company (A) has a lower times interest earned (TIE) ratio. 23. The objectives or goals of financial management are to maximize ..... ? A) Total assets. B) Owner's wealth. C) Sales. D) Profits. Show Answer Correct Answer: B) Owner's wealth. 24. Q5) Which principle of sound financial planning relates to spreading investments across different asset types? A) Ignoring budgeting. B) Living beyond means. C) Accumulating excessive debt. D) Diversification. Show Answer Correct Answer: D) Diversification. 25. Financial leverage is also called as ..... A) Financial return. B) Financial Risk. C) Trading on equity. D) Fixed charges leverage. Show Answer Correct Answer: C) Trading on equity. 26. Which one of the following items is not a method/tool of analysis of financial statements? A) Accounting Ratio. B) Break Even Point. C) Statement of Receipts and Payments. D) Fund Flow Statement. Show Answer Correct Answer: C) Statement of Receipts and Payments. 27. Refers to the fungible and tradable financial instrument used to raise capital in public and private markets. A) Security. B) Surplus. C) Stocks. D) Equity. Show Answer Correct Answer: A) Security. 28. Increasing the credit period from 30 to 60 days, would likely result in: A) An increase in sales. B) Higher profits. C) A decrease in bad debt losses. D) An increase in the average collection period. Show Answer Correct Answer: D) An increase in the average collection period. 29. True/False:Current Ratio = (Current Assets-Inventory)/Current Liabilities A) True. B) False. Show Answer Correct Answer: B) False. 30. How many percentages should a person save from their monthly income? A) 8%. B) 20%. C) 5%. D) 10%. Show Answer Correct Answer: D) 10%. ← 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