This quiz works best with JavaScript enabled. Home > Management > Financial Management > Financial Management – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 1 (20 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) Quality over quantity. B) Services. C) Discount amounts. D) Saving in the long run. E) Cryptocurrency. Show Answer Correct Answer: E) 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) True. B) False. Show Answer Correct Answer: A) 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) Liquidity. B) Profitability. C) Risk-Return trade off. D) Finance manager. Show Answer Correct Answer: C) 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) 2, 950, 000. B) 3, 000, 000. C) 3, 200, 000. D) 5, 500, 000. Show Answer Correct Answer: A) 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) Balance Sheet Statement. B) Income Statement. C) Statement of stockholder's Equity. D) Statement of Cash Flow. Show Answer Correct Answer: D) 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) Less than $ 1, 000. B) Exactly $ 1, 000. C) More than $ 1, 000. D) This question cannot be answered because we have an interest rate of 0.0%. Show Answer Correct Answer: B) 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) Balance Sheet. B) Income Statement. C) Startup Cost Statement. D) Payroll Sheet. Show Answer Correct Answer: C) 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) 5 times. B) 4 times. C) 3 times. D) 2 times. Show Answer Correct Answer: A) 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. Next →Related QuizzesManagement QuizzesFinancial Management Quiz 2Financial Management Quiz 3Financial Management Quiz 4Financial Management Quiz 5Financial Management Quiz 6Financial Management Quiz 7Financial Management Quiz 8Financial Management Quiz 9Financial Management Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books