Business Finance MCQs

Question 1

Arrange the following steps of operation cycle in correct order 1. Conversion of a accounts receivables into cash. 2. Conversion of work-in-progress into finished goods. 3. Conversion of raw-material into work-in-progress. 4. Conversion of finished goods into accounts receivable.

Accepted Answer

3, 2, 4, 1

Answer

2, 1, 4, 3

Answer

4, 3, 2, 1

Answer

1, 4, 3, 2

Question 2

Which of the following is not a disclosure requirement for finance leases?

Accepted Answer

Market value of asset

Answer

Carrying amount of asset

Answer

General description of significant leasing arrangements

Answer

Reconciliation between total minimum lease payments and their present value

Question 3

Which of the following options are a part of preference shares?

Accepted Answer

They receive dividends

Answer

They are not allowable for corporation tax

Answer

They have no voting rights

Answer

They are not a part of a company's share capital

Question 4

Under dividend reinvestment plan (DRIP):

Accepted Answer

Both A and B

Answer

The dividends are not passed on to investors in the form of money

Answer

It allows shareholders to automatically reinvest dividend payments in some scheme or additional shares of the firm's stock

Answer

It is a mandatory plan where shareholders are automatically reinvesting dividend payments in additional shares of the firm's stock at a reduced price

Question 5

A company may raise the financial capital in the primary market through

Accepted Answer

All of the above

Answer

Public issue

Answer

Rights issue

Answer

Bough tout deals

Question 6

Which of the following is concerned with the maximization of a firm's stock price?

Accepted Answer

Shareholder wealth maximization

Answer

Profit maximization

Answer

Stakeholder welfare maximization

Answer

EPS maximization

Question 7

If the going rate of interest is above the coupon rate, the bond will sell

Accepted Answer

At par

Answer

At a premium

Answer

At a discount

Answer

None of the above

Question 8

Which of the following statement(s) is/are incorrect?

Accepted Answer

Undercapitalisation leads to overcapitalisation

Answer

Capital' and 'Capitalisation' are synonymous terms

Answer

Both A and B

Answer

None of the above

Question 9

Monetary policy for the countries using the euro as a currency is now conducted by

Accepted Answer

European Central Bank

Answer

The Federal Reserve

Answer

The Bundes Bank

Answer

RBI