FM assgn:16: Shagun Select The Blank Question Correct Answer Your Answer True/False Question Correct Answer Your

Answer A good Budget manual promotes standardization and simplification of budgetary procedures True True Venture Capitalist is not interested in keeping his investment in the project on a ________ basis Permanent Permanent

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

Multiple Choice Single Answer Question Correct Answer Your Answer The effect of Old furniture the book value of which is Rs. 5,000 discarded and written off in the Profit and loss account on the funds flow is that there will be No effect on the funds flow Implied change on the funds flow

True/False Question Correct Answer Your Answer A revenue budget has time horizon of just a year and so many things can be reasonably forecast and estimated True True

Match The Following Question Mortgage Correct Answer Your Answer

Mode of security pertains Mode of security pertains to immovable properties like to immovable properties land and building like land and building Neither the property not Neither the property not the possession of the goods is

Hypothecation

the possession of the goods is transferred to the bank Pledge

transferred to the bank

Possession of the goods Type of assistance may be considered by the bank to is with the bank take care of specific needs of the company when it receives some export order Bank has a right to retain the goods belonging to the company until the debt due to the bank is paid Bank has a right to retain the goods belonging to the company until the debt due to the bank is paid

Lien

Multiple Choice Single Answer Question Correct Answer Your Answer The most reliable source of getting the information about the creditworthiness of the customer who is dealing with the company presently is Past experience of the customer Bank Reference

Multiple Choice Multiple Answer Question Correct Answer Fixation of Inventory levels are based on the following propositions There has to be a constant watch on the actual stock level of various kinds of materials so that proper action can be taken , The various levels fixed are not fixed on a permanent basis and are subject to revision regularly Ordering cost and carrying cost are directly related to each other , There has to be a constant watch on the actual stock level of various kinds of materials so that proper action can be taken , Minimum level indicate the level above which the actual stock should not exceed

Your Answer

Select The Blank Question Correct Answer Your Answer The analytical method of inventory control which aims at concentrating efforts in those areas where attention is required most is termed as ________ ABC Analysis ABC Analysis

Match The Following Question Normal Usage * Lead time for emergency purchases Maximum lead time * Maximum usage Correct Answer Your Answer Danger level Re-order level Danger level Re-order level

Reorder level + Re-order quantity - ( Minimum usage * Minimum lead time ) Re-order level - ( Normal usage * Normal lead time )

Maximum level Maximum level Minimum level Minimum level

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

Select The Blank Question Correct Answer Your Answer Investment of the venture capitalist does not exceed ________ so that the effective control of the project remains with the entrepreneur 0.49 0.49

Select The Blank Question Correct Answer Your Answer The mathematical expression of ________ is ( Minimum level + Maximum level ) / 2 Average level Average level

True/False Question Correct Answer Your Answer The approved credit rating agencies prevailing in the country are promoted by the government controlled organisations True True

True/False Question Correct Answer Your Answer The combination of irrevocable and confirmed letter of credit can be considered to be a guaranteed payment on the part of the exporter True True

True/False

Question Correct Answer Your Answer

The requirement of Fixed Working Capital is unaffected due to the changes in the level of activity True False

Multiple Choice Multiple Answer Question Correct Answer The factor may provide the following services to the client 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 It undertakes the responsibility of following up with the customers for the purpose of making the collection from the customer , 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

Your Answer

Multiple Choice Multiple Answer Question Correct Answer Your Answer The approaches to compute the cost of equity shares are Earnings / Price Approach , Dividend / Price Approach , Realised Yield Approach Dividend / Price Approach , Earnings / Price Approach , Net Income Approach

Multiple Choice Multiple Answer Question Correct Answer Advantages of letter of credit to the Exporter He is assured to get the payment for the goods exported by him, if he satisfies all the terms and conditions specified in the letter of credit , He can get the advance pending against export proceeds receivable from the importer from its local bank He is assured to get the payment for the goods exported by him, if he satisfies all the terms and conditions specified in the letter of credit , It increases its sales , the importer can bargain for better trading terms

Your Answer

Multiple Choice Single Answer Question Correct Answer Your Answer In the Working Capital Cycle, the cash available to the organization is converted back in the form of Cash Receivables

Multiple Choice Multiple Answer Question Correct Answer Your Answer Undue decrease in Gross Profit ratio may indicate Non-consideration of sales invoices , Under-valuation of closing stock , Improper utilisation of infrastructural facilities Non-consideration of sales invoices , Under-valuation of closing stock , Improper utilisation of infrastructural facilities

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

Multiple Choice Single Answer Question Correct Answer Your Answer The main function of finance under the traditional approach comprises of Procurement of funds Procurement of funds

Select The Blank Question Correct Answer Your Answer ________ approach is the mean between two extreme approaches of net income approach and net operating income approach Traditional Modigliani - Miller

Select The Blank Question Correct Answer Your Answer Without Recourses factoring is also referred to as ________ Full factoring Zero factoring

Multiple Choice Single Answer Question Correct Answer Your Answer The ratios computed that indicate the efficiency of the organisation to use the various kinds of assets by converting them in the form of Sales is categorised under Turnover group Turnover group

Multiple Choice Single Answer Question Correct Answer Your Answer The amount of cheques deposited by a Bank awaiting clearance is called Collection float Deposit float

Multiple Choice Multiple Answer Question Correct Answer Your Answer Earnings / Price Approach to compute cost of equity shares is objected on the following grounds It wrongly assumes that earnings per share will remain constant in future , All the earnings may not be distributed among the shareholders by way of dividend This presupposes that an investor looks forward only to receive dividend on equity shares which may not be correct , It wrongly assumes that earnings per share will remain constant in future , All the earnings may not be distributed among the shareholders by way of dividend

Multiple Choice Single Answer Question Correct Answer Your Answer How many days in a year are to be considered for the calculation of daily sales 360 360

Multiple Choice Single Answer Question Correct Answer Your Answer Loan Installments appear in the cash budget under the head Non-operating cash outflow Operating cash outflow

Multiple Choice Multiple Answer Question Correct Answer Your Answer The Proprietary concern is better than the Partnership concern on the following points Minimum Government regulations , Where the business is small Minimum Government regulations , Capacity to raise large amount of funds , Large Capital Investment

Multiple Choice Multiple Answer Question Advantages of factoring

Correct Answer

Factoring is the way in which the company can finance its requirement of Working capital in respect of receivables , The company can take advantage of the expertise of the factor in various fields , With the help of factoring the company can be relieved of administrative responsibilities Factoring is the way in which the company can finance its requirement of Working capital in respect of receivables , The company can take advantage of the expertise of the factor in various fields , With the help of factoring the company can be relieved of administrative responsibilities

Your Answer

True/False Question Correct Answer Your Answer While calculating funds from operations, non-cash as well as non-business income is deducted from net profits True True

True/False Question Correct Answer Your Answer Following lenient dividend policy without bothering much about building up the reserves may be the cause for undercapitalisation False True

Multiple Choice Single Answer Question Correct Answer Your Answer A private limited company and a public limited company are similar on the basis of Limited liability Invitation to public for subscription for any shares

Select The Blank Question Correct Answer Your Answer Subscription list of a public issue of shares shall be kept open for minimum ________ working days 3 3

True/False Question Correct Answer Your Answer Loans from financial corporations etc. are sources of cash True False

Multiple Choice Single Answer Question Correct Answer Your Answer According to the Irrelevance approach of dividend policy, the value of the company remains unaffected by the dividend policy of the company will increase if dividend payout is on the higher side

Multiple Choice Multiple Answer Question Correct Answer Your Answer International financial function of the organisation comprises of : Study of flow of funds beyond national boundaries , Exchange of currencies Study of flow of funds beyond national boundaries , Exchange of currencies , Financial matters of Government

Multiple Choice Single Answer Question Correct Answer Your Answer The hidden cost of capital which is not incurred directly is referred to as Implicit cost Explicit cost

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 True True

Correct Answer Your Answer

True/False Question Correct Answer Your Answer Accounts Receivable is an example of current assets True True

Multiple Choice Multiple Answer Question Correct Answer The advantages of leasing for the lessee are The payment of lease rents is the tax deductible expenditure , It is the quickest method

of financing the requirements of long term capital , Avoids risk of ownership Your Answer The payment of lease rents is the tax deductible expenditure , It is the quickest method of financing the requirements of long term capital , Avoids risk of ownership

Multiple Choice Multiple Answer Question Correct Answer Your Answer The book-keeping and accounting activities in relation to the receivables management undertaken by the factor includes Maintenance of debtors ledger , Various periodical reports about outstanding from the customers , Age-wise analysis of the outstanding Maintenance of debtors ledger , Preparing financial statements , Age-wise analysis of the outstanding

Select The Blank Question Correct Answer Your Answer ________ is one of the current assets that takes the longest time to get converted into cash Stock Stock

Select The Blank Question From the following data, the Earning per share is ________ : Net Profit before tax Rs. 2,00,000/-, Taxation at 50% of Net Profit, 10% Preference Share Capital (Rs. 10 each) Rs. 1,00,000/-, Equity Share Capital (Rs. 10 each) Rs. 1,00,000/9 4

Correct Answer Your Answer

Multiple Choice Multiple Answer Question Correct Answer Your Answer Advantages of Preference shares from shareholders point of view For a corporate investor, preference dividend income , It earns a stable dividend rate For a corporate investor, preference dividend income , It earns a stable dividend rate , No collateral is pledged in favour of preference shareholders