Financial Management

651. Capital Budgeting is related to

  1. Long term assets
  2. Short term assets
  3. Long term and short term assets
  4. Fixed assets
Correct answer: (A)
Long term assets

652. Which one of the following items is not generally used in preparing a statement of cash flows?

  1. Adjusted trial balance
  2. Comparative balance sheets
  3. Current income statement
  4. Additional information
Correct answer: (A)
Adjusted trial balance

653. The order of presentation of activities on the statement of cash flows is

  1. operating, investing, and financing
  2. operating, financing, and investing
  3. financing, operating, and investing
  4. financing, investing, and operating
Correct answer: (A)
operating, investing, and financing

654. Significant noncash transactions would not include

  1. conversion of bonds into common stock
  2. asset acquisition through bond issuance
  3. treasury stock acquisition
  4. exchange of plant assets
Correct answer: (C)
treasury stock acquisition

655. In the Balance sheet of a firm, the debt equity ratio is 2:1. The amount of long term sources is Rs.12 lac. What is the amount of tangible net worth of the firm?

  1. Rs.12 lac
  2. Rs.8 lac
  3. Rs.4 lac
  4. Rs.2 lac
Correct answer: (B)
Rs.8 lac

656. Authorised capital of a company is Rs.5 lac, 40% of it is paid up. Loss incurred during the year is Rs.50,000. Accumulated loss carried from last year is Rs.2 lac. The company has a Tangible Net Worth of

  1. Nil
  2. Rs.2.50 lac
  3. (-) Rs.50,000
  4. Rs.1 lac
Correct answer: (C)
(-) Rs.50,000

657. Quick assets do not include

  1. Govt. bond
  2. Book debts
  3. Advance for supply of raw materials
  4. Inventories
Correct answer: (D)
Inventories

658. Which of the following ratios would be useful in assessing short-term liquidity?

  1. Current ratio, inventory turnover, fixed asset turnover
  2. Average collection period, debt ratio, return on assets
  3. Current ratio, quick ratio, cash-flow liquidity ratio
  4. Quick ratio, accounts receivable turnover, returns on assets
Correct answer: (C)
Current ratio, quick ratio, cash-flow liquidity ratio

659. Accounting Ratios are important tools used by

  1. Managers
  2. Researchers
  3. Investors
  4. All of the above
Correct answer: (D)
All of the above

660. Ratio of Net Income to Number of Equity Shares known as?

  1. Price Earnings Ratio
  2. Net Profit Ratio
  3. Earnings per Share
  4. Dividend per Share
Correct answer: (C)
Earnings per Share
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