This quiz works best with JavaScript enabled. Home > Management > Financial Management > Financial Management – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Abbie, Baylee, and Jackson are running a small business. They are trying to understand the concept of operating leverage. Can you explain it to them? A) Operating leverage is a measure of how revenue growth translates into growth in operating income. It is a measure of leverage, and of how risky, or volatile, a company's operating income is. B) Operating leverage is the total amount of fixed costs that a company has. C) Operating leverage is the total amount of variable costs that a company has. D) Operating leverage and financial leverage are the same thing in a business. Show Answer Correct Answer: A) Operating leverage is a measure of how revenue growth translates into growth in operating income. It is a measure of leverage, and of how risky, or volatile, a company's operating income is. 2. In Financial Report Analysis there are several analytical tools, namely as follows: A) Vertical Analysis or Common Size Analysis. B) Horizontal Analysis or Comparative Analysis. C) Ratio Analysis. D) All Answers are Correct. Show Answer Correct Answer: D) All Answers are Correct. 3. The financial institutions are established by both State and central government A) True. B) False. Show Answer Correct Answer: A) True. 4. Withdrawing more money than you have A) Draft. B) Overdraft. C) Underdraft. D) Withdraw. Show Answer Correct Answer: B) Overdraft. 5. Which of the following is NOT an active income? A) Salary. B) Commission. C) Dividends. D) Fixed allowance. Show Answer Correct Answer: C) Dividends. 6. Higher level of competition neccesitates A) More fixed capital. B) More working capital. C) No working capital. D) Less working capital. Show Answer Correct Answer: B) More working capital. 7. Which of the following is the correct example of asset and liability? A) Asset:LoanLiability:Credit card debts. B) Asset:Unit TrustLiability:Instalment balance. C) Asset:TaxLiability:Real estate. D) Asset:SavingLiability:Property. Show Answer Correct Answer: B) Asset:Unit TrustLiability:Instalment balance. 8. When an existing public corporation issues new stocks this process is called initial public offering. A) True. B) False. Show Answer Correct Answer: B) False. 9. The M in SMART Goal stands for A) Meaningful. B) Measurable. C) Merciful. D) None of above. Show Answer Correct Answer: B) Measurable. 10. It is the basic salary device of accounting. A) T-Account. B) Account. C) Assets. D) Liabilities. Show Answer Correct Answer: B) Account. 11. This Act shall be known as the "Economic and Financial Literacy Act" A) Republic Act No. 10066. B) Republic Act No. 10665. C) Republic Act No. 10922. D) None of above. Show Answer Correct Answer: C) Republic Act No. 10922. 12. Financial ratios, which assess the profitability of a company, include all of the following except the A) Dividend yield ratio. B) Gross profit percentage. C) Earnings per share ratio. D) Return on sales ratio. Show Answer Correct Answer: A) Dividend yield ratio. 13. What has the same meaning as negative cash flow? A) Deficit. B) Surplus. Show Answer Correct Answer: A) Deficit. 14. The following are NOT characteristics of VAT, namely: A) Existence of a tax invoice for the seller (Output Tax Invoice). B) Existence of a tax invoice for buyers (Input Tax Invoice). C) Both answers a and b are characteristics of VAT. D) There are event news from customers. Show Answer Correct Answer: D) There are event news from customers. 15. Which of the following is/are usually seen as forms of market failure where regulation may be a solution? 1. Imperfect competition 2. Social costs or externalities 3. Imperfect information A) 1 only. B) 1 and 2 only. C) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: D) 1, 2 and 3. 16. Which of the following would NOT be considered a benefit? A) Unpaid vacation. B) Health insurance. C) Paid vacation. D) Salary. Show Answer Correct Answer: D) Salary. 17. The total money you get to "take home" from your paycheck after taxes and deductions is A) Gross Pay. B) Net Pay. C) "The Bag". D) None of above. Show Answer Correct Answer: B) Net Pay. 18. According to the net operating income approach A) Financial mix is irrelevant and it does not affect the value of the firm. B) The business risk remains constant at every level of Dept equity mix. C) Every capital is optimum capital structure as per NOI approach. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. What is meant by diversification in investment? A) Investing all money in one type of asset. B) Investing money in various types of assets. C) Investing money in foreign currency. D) Investing money in precious metals. Show Answer Correct Answer: B) Investing money in various types of assets. 20. The sum of short term and long term sources of finance is known as: A) Capital structure. B) Both of these. C) Financial structure. D) None of these. Show Answer Correct Answer: C) Financial structure. ← PreviousNext →Related QuizzesManagement QuizzesFinancial Management Quiz 1Financial 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