Financial Management

401. If the following is an element of dividend policy?

  1. Production capacity
  2. Change in Management
  3. Informational content
  4. Debt service capacity
Correct answer: (C)
Informational content

402. In stock dividend:

  1. Authorized capital always increases
  2. Paid up capital always increases
  3. Face value per share decreases
  4. Market price for share decreases
Correct answer: (D)
Market price for share decreases

403. Cheques deposited in bank may not be available for immediate use due to

  1. Payment Float
  2. Recceipt Float
  3. Net Float
  4. Playing the Float
Correct answer: (B)
Recceipt Float

404. Float management is related to

  1. Cash Management
  2. Inventory Management
  3. Receivables Management
  4. Raw Materials Management
Correct answer: (A)
Cash Management

405. 5Cs of the credit does not include

  1. Collateral
  2. Character
  3. Conditions
  4. None of the above
Correct answer: (D)
None of the above

406. Which of the following is not a part of credit policy?

  1. Collection Effort
  2. Cash Discount
  3. Credit Standard
  4. Paying Practices of debtors
Correct answer: (D)
Paying Practices of debtors

407. If the closing balance of receivables is less than the opening balance for a month then which one is true out of

  1. Collections>Current Purchases
  2. Collections>Current Sales
  3. Collections<Current Purchases
  4. Collections < Current Sales
Correct answer: (B)
Collections>Current Sales

408. 80% of sales of 10,00,000 of a firm are on credit. It has a Receivable Turnover of 8. What is the Average collection period (360 days a year) and Average Debtors of the firm?

  1. 45 days and 1,00,000
  2. 360 days and 1,00,000
  3. 45 days and 8,00,000
  4. 360 days and 1,25,000
Correct answer: (A)
45 days and 1,00,000

409. If cash discount is offered to customers, then which of the following would increase?

  1. Sales
  2. Debtors
  3. Debt collection period
  4. All of the above
Correct answer: (A)
Sales

410. ABC Analysis is used in

  1. Inventory Management
  2. Receivables Management
  3. Accounting Policies
  4. Corporate Governance
Correct answer: (A)
Inventory Management
Page 41 of 78