Financial Management

671. Who of the following make a broader use of accounting information?

  1. Accountants
  2. Financial Analysts
  3. Auditors
  4. Marketers
Correct answer: (B)
Financial Analysts

672. Working capital management involves the financing and management of the assets of the firm.

  1. Fixed
  2. Total
  3. Current
  4. None of the above
Correct answer: (C)
Current

673. Excess working capital results in

  1. Block of cash
  2. Loosing interests
  3. Lack of production
  4. Lack of smooth flow of production
Correct answer: (A)
Block of cash

674. The excess of current assets over current liabilities is known as

  1. Gross working capital
  2. Permanent working capital
  3. Temporary working capital
  4. Net working capital
Correct answer: (D)
Net working capital

675. The time period required to convert the credit sales into cash

  1. Operating cycle period
  2. Inventory conversion period
  3. Receivable conversion period
  4. None
Correct answer: (C)
Receivable conversion period

676. Working capital is also known as ______________ capital.

  1. circulating
  2. fluctuating
  3. fixed
  4. going
Correct answer: (B)
fluctuating

677. Factoring is a form of financing ______________.

  1. payable
  2. receivables
  3. borrowings
  4. debts
Correct answer: (C)
borrowings

678. Ordering cost is the cost of ______________ materials.

  1. selling
  2. purchasing
  3. stocking
  4. financing
Correct answer: (B)
purchasing

679. Which one of the following is capital expenditure:

  1. Capital invested by owner
  2. Selling expense for machine
  3. Machine purchased
  4. Daily expense to operate business
Correct answer: (C)
Machine purchased

680. The statement of cash flows

  1. must be prepared on a daily basis
  2. summarizes the operating, financing, and investing activities of an entity
  3. is another name for the income statement
  4. is a special section of the income statement
Correct answer: (B)
summarizes the operating, financing, and investing activities of an entity
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