Financial Management MCQ on Fundamentals

1. Funds are financial resources in the form of:

(a) Corporate capital

(b) Business funds

(c) Cash Equivalents

(d) All of these

Ans- (d) All of these

2. An asset that derives value from a contractual Claim is called as

(a) Fictitious asset

(b) Financial asset

(c)Tangible asset

(d) Real asset

Ans-(b) Financial asset

3. The government finance which includs the principles and practices relating to the Procurement
and management of funds for Central Government, and Local bodies is known as:

(a) Public finance

(b) Business Finance

(c)Private Finance

(d)All of these

Ans- (a) Public finance

4. Business finance deals with which of the following?

(a) Utilize funds efficiently

(b) Procuring funds from different sources on fair terms

(c) Both of these

(d) None of these

Ans- (c) Both of these

5. The managerial process which is concerned with the planning and control of financial
resources is called as:

(a) Control function

(b) Finance function

(c) Management function

(d) None of these

Ans-(b) Finance function

6. Financial management came into existence as a separate field of study from…?

(a) 19th century

(b) 21st century

(c) 20th century

(d) None of these

Ans-(c) 20th century

7. The financial activities which are performed regularly are known as:

(a) Non-recurring finance functions

(b) Both of these

(c) Recurring finance functions

(d) None of these

Ans-(c) Recurring finance functions

8. The financial activities which are performed only on special events like promotion.
Amalgamation and solvency crisis are called as:

(a) Non-recurring finance functions

(b) Recurring finance functions

(c) Both of these

(d)None of these

Ans-(a) Non-recurring finance functions

9. The sum of short term and long term sources of finance is known as:

(a) Capital structure

(b) Both of these

(c) Financial structure

(d) None of these

Ans-(c) Financial structure

10.The sources of finance from which the quantum of required funds can be raised is/are:

(a) Share capital

(b) Trade credit

(c) Debt capital

(d) All of these

Ans-(d) All of these

11. The decisions of investing in long term or fixed assets on the basis of cost-benefit analysis or
risk-return analysis are known as:

(a) Working capital decisions

(b) Financial Decisions

(c) Capital budgeting decisions

(d) None of these

Ans-(c) Capital budgeting decisions

12. Short term or current assets Decisions are known as:

(a) Short term investment decisions

(b) Working capital decisions

(c) Both

(d) None

Ans-(c) Both

13. The decisions relating to the use of profits or income of an entity or organization are known

(a) Finance decisions

(b) Dividend decisions

(c) Investment Decision

(d) Any of these

Ans-(b) Dividend decisions

14. The profits or income of an entity or organisation can be used:

(a) To distribute it as dividend to the shareholders

(b) To retain it in business in the form of accumulated profits

(c) Either a or b

(d) None of these

Ans-(c) Either a or b

15. The financial manager selects one or more sources of finance after proper taking into

Consideration of:

(a) Cost of capital

(b) Control

(c) Risk

(d) All of these

Ans-(d) All of these

16. The financial objectives in terms of decision criteria may be:

(a) Welfare maximization

(b) Wealth maximization

(c) Profit maximization

(d) Any of these

Ans-(d) Any of these

17. The profit maximization objective has been criticized on the basis of:

(a) Ignore risk factor

(b) Ignore time value of money

(c) Ambiguity

(d) All of these

Ans-(d) All of these

18. Which is the main motive is to select activities having positive impact on society in:

(a) Profit maximization objective

(b) Welfare maximization objective

(c) Wealth maximization objective

(d) None of these

Ans-(c) Wealth maximization objective

19. The social cost benefits analysis is primarily used to determine the economic benefits of the
activities in forms of which of the following:

(a) Market prices

(b) Discounted prices

(c) Shadow prices

(d) Augmented prices

Ans-(c) Shadow prices

20. Treasurer performs the functions of which of the following functions:

(a) Credit management

(b) Cash management

(c) Procurement of essential funds

(d) All of these

Ans-(d) All of these

21. Financial controller is responsible

(a) Cash management

(b) Credit management

(c) Securities management

(d) None of these

Ans-(d) None of these