SCDL Assignments : Financial Management 8

True/False
Question Economic Order Quantity model is a very
useful model of determining the order quantity
Correct Answer True  
Your Answer True

Multiple Choice Multiple Answer
Question The advantages of operating lease is
Correct Answer In an operating lease arrangement the equipment risk is transferred to the lessor , It minimizes investment in equipment , Reduces expenditure on maintenance
Your Answer In an operating lease arrangement the equipment risk is transferred to
the lessor , It minimizes investment in equipment , Reduces expenditure
on maintenance

Select The Blank
Question ________ in assets involves inflow of funds
Correct Answer Decrease  
Your Answer Decrease

Multiple Choice Multiple Answer
Question The functions of a Finance Controller are :
Correct Answer Budgeting , Record Keeping , Annual Reporting
Your Answer Budgeting , Record Keeping , Annual Reporting

Multiple Choice Single Answer
Question The symptom of low capacity utilisation will be shown by
Correct Answer Fixed Assets Turnover ratio
Your Answer Fixed Assets Turnover ratio

Multiple Choice Single Answer
Question If a company decides to invite public deposits
Correct Answer It should publish an advertising in leading newspaper
Your Answer It should publish an advertising in leading newspaper

Multiple Choice Multiple Answer
Question The techniques of Analysis and Interpretation of financial statements are Correct Answer Ratio Analysis , Cash flow Analysis
Your Answer Ratio Analysis , Cash flow Analysis

Multiple Choice Multiple Answer
Question Advantages of ABC Analysis are
Correct Answer
A close and strict control is facilitated on the most
important items , Helps in maintaining a high inventory turnover ratio ,
Optimum utilisation of the available funds can be assured
Your Answer
It enables to locate slow and non-moving items , A close and strict
control is facilitated on the most important items , Optimum utilisation
of the available funds can be assured

Select The Blank
Question The amount of profit earned after recovering the interest on long term
sources of capital is referred to as ________
Correct Answer Profit before taxes
Your Answer Profit before taxes

Multiple Choice Single Answer
Question Mr. A invested Rs. 10,000 in fixed deposit carrying interest @10% p.a. compounded annually. Calculate the value of investment after two years
Correct Answer Rs. 12,100  
Your Answer Rs. 12,100

Multiple Choice Single Answer
Question Increase in the amount of bills payable results in
Correct Answer Increase in cash
Your Answer Decrease in cash

Multiple Choice Single Answer
Question The assets held by a business which can be converted in the form of cash or used during the course of normal operations is termed as
Correct Answer Current assets
Your Answer Current assets

True/False
Question Inadequate provision for depreciation may be the cause of overcapitalisation
Correct Answer True
Your Answer True

Select The Blank
Question Factoring indicates the relationship between ________ and a business organisation
Correct Answer Financial institutions
Your Answer Financial institutions

True/False
Question Inadequate provision for depreciation may be the cause of overcapitalisation
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Gross Profit can be increased by either
Correct Answer Reduced Production cost, sales price remaining the same , Increased Sales price, Reduced Production cost , Increased Sales price, Production cost remaining the same
Your Answer Reduced Production cost, sales price remaining the same , Increased Sales price, Reduced Production cost , Increased Sales price, Production cost remaining the same

Multiple Choice Multiple Answer
Question Limitations of cash flow analysis are
Correct Answer It cannot be equated with the income statement , Cannot replace the fund flow statement , Dose not represent real liquid position
Your Answer Cannot replace the fund flow statement , Dose not represent real liquid position

Multiple Choice Multiple Answer
Question Disadvantages of factoring are
Correct Answer The financial burden on the company increases , It may be considered to be a symptom of financial weakness on the part of the selling company , In Indian circumstances, factoring is mainly with-recourse factoring. The risk of non-payment on the part of customer is borne by the selling firm. This restricts its popularity
Your Answer It may be considered to be a symptom of financial weakness on the part of the selling company , In Indian circumstances, factoring is mainly with-recourse factoring. The risk of non-payment on the part of customer is borne by the selling firm. This restricts its popularity

True/False
Question In calculating funds from operations non-business expenses like dividends paid etc. as well as non cash expenses like depreciation etc. are added back in the net profits shown by the Profit & Loss Account
Correct Answer True
Your Answer False

True/False
Question Semi-variable cost is the cost which varies in direct proportion to the sales revenue
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question The rate at which an organisation must pay to the suppliers of capital for the use of their funds is termed as
Correct Answer cost of capital
Your Answer cost of capital

True/False
Question A high degree of operating leverage means that the component of fixed cost is too high in the overall cost structure
Correct Answer True
Your Answer True

Select The Blank
Question ________ of the company should authorise the company to buy back its own shares
Correct Answer Articles of Association
Your Answer Articles of Association

Multiple Choice Single Answer
Question Tax paid is
Correct Answer Application of funds
Your Answer Application of funds

Multiple Choice Multiple Answer
Question The factor may provide the following services to the client
Correct Answer It may undertake the credit analysis of the customers of the client , It will undertake the various book-keeping and accounting activities in relation to the receivables management , It undertakes the responsibility of following up with the customers for the purpose of making the collection from the customer
Your Answer It may undertake the credit analysis of the customers of the client , It will undertake the various book-keeping and accounting activities in relation to the receivables management , It undertakes the responsibility of following up with the customers for the purpose of making the collection from the customer

Multiple Choice Multiple Answer
Question Packing credit facility can take the following form
Correct Answer Pre-shipment Packing credit , Post-shipment Packing credit
Your Answer Pre-shipment Packing credit , Post-shipment Packing credit

Select The Blank
Question One of the tools available to the company to ensure the maintenance of ________ cash balance is to prepare cash budget
Correct Answer Optimum
Your Answer Optimum

Select The Blank
Question The comparison of the ratios of one organisation with that of the other organisation is termed as ________ comparison
Correct Answer Inter-firm
Your Answer Inter-firm

Multiple Choice Single Answer
Question Financing consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the business' is defined by
Correct Answer Bonneville and Dewey
Your Answer Bonneville and Dewey

Multiple Choice Multiple Answer
Question The importance of various items of inventory may be decided on the following factors
Correct Answer Amount of investment in inventory , Value of material consumption , Critical nature of inventory items
Your Answer Amount of investment in inventory , Value of material consumption , Critical nature of inventory items

Multiple Choice Single Answer
Question A decrease in current assets
Correct Answer decreases working capital
Your Answer increases working capital

Multiple Choice Single Answer
Question The proxy is
Correct Answer a person appointed by the equity shareholder to attend the annual general meeting in his absence and can vote in the meeting
Your Answer a person appointed by the equity shareholder to attend the annual general meeting in his absence and can vote in the meeting

Multiple Choice Single Answer
Question The traditional approach to financial management refers only to the procurement of funds by
Correct Answer Corporate entity
Your Answer Corporate entity

Select The Blank
Question The basic objective of ________ management is to reduce the operating cash requirement to the minimum possible extent without affecting the routine transactions.
Correct Answer Cash
Your Answer Cash

True/False
Question The cost of the factor is slightly higher than the interest which the client would have paid had he borrowed the funds from the Bank
Correct Answer True
Your Answer False

Select The Blank
Question ________ in assets involves inflow of funds
Correct Answer Decrease
Your Answer Decrease

Select The Blank
Question Liquidity ratios indicate the ________ position of the organisation
Correct Answer Short term
Your Answer Short term

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