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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Working capital Set 1

Q1 | The Funds required by way of permanent working capital should be provided by__________.
  • indigenous banks
  • commercial banks
  • rbi
  • proprietors
Q2 | Service and Financial concerns may have _____.
  • longest operating cycle
  • shortest operating cycle
  • manufacturing phase
  • none of these
Q3 | _____ is that minimum amount which should always be present in the business to carry outthe activities without a break.
  • net working capital
  • gross working capital
  • permanent working capital
  • temporary working capital
Q4 | Working capital over and above the fixed working capital would be termed as _______.
  • temporary working capital
  • permanent working capital
  • net working capital
  • gross working capital
Q5 | __________ denotes a situation of too much or excessive working capital.
  • gross working capital
  • redundant working capital
  • permanent working capital
  • temporary working capital
Q6 | _________ being the life blood of a business requires to be maintained in reasonablyadequate quantity to run business successfully.
  • working capital
  • proper documents
  • assets
  • petty cash
Q7 | According to ________ working capital refers to the company’s total investment in currentassets.
  • net concept
  • gross concept
  • equal concept
  • accounting concept
Q8 | According to ________ working capital refers to the difference between current assets andcurrent liabilities.
  • equal concept
  • accounting concept
  • net concept
  • gross concept
Q9 | The funds required for running an organisation are generally called as ____________.
  • overdraft
  • cash credit
  • working capital
  • operating profit
Q10 | The __________ is required to ensure circulation of operating cycle.
  • regular working capital
  • fixed working capital
  • reserve working capital
  • variable working capital
Q11 | ________ is the excess amount over the requirement for regular working capital.
  • variable working capital
  • fixed working capital
  • reserve working capital
  • regular working capital
Q12 | The working capital required to meet the seasonal need of the business is called _______.
  • fixed working capital
  • variable working capital
  • special working capital
  • seasonal working capital
Q13 | ___________ is required to meet special exigencies such as launching of extensive marketingcampaigns for conducting research.
  • seasonal working capital
  • special working capital
  • reserve working capital
  • regular working capital
Q14 | The statement of changes in financial position prepared to determine only the sources anduses of working capital between two dates of balance sheet is known as __________.
  • cash flow statement
  • memorandum balance sheet
  • fund flow statement
  • profit and loss account
Q15 | What are the aspects of working capital management?
  • inventory management
  • receivable management
  • cash management
  • all of the above
Q16 | _________ function includes a firm’s attempts to balance cash inflows and outflows.
  • finance
  • liquidity
  • investment
  • dividend
Q17 | Firms which are capital intensive rely on _________.
  • equity
  • short term debt
  • debt
  • retained earnings
Q18 | Hirer is entitled to claim ___________.
  • depreciation
  • salvage value
  • hp payments
  • none of above
Q19 | Which of the following is not an advantages of trade credit?
  • easy availability
  • flexibility
  • informality
  • buyout financing
Q20 | Which of the following are theories for dividend relevance?
  • walter’s model
  • mm approach
  • game theory
  • market value theory
Q21 | What is not a form of dividend?
  • cash dividends
  • bonus shares(stock dividend)
  • share split
  • split reverse
Q22 | The percentage of earnings paid as dividends is called __________.
  • dividend policy
  • payout ration
  • cash dividends
  • reverse split
Q23 | What are the various methods of estimating cash?
  • receipts and payment method
  • adjusted profit & loss method
  • balance sheet method
  • all of the above
Q24 | The art of managing, within the acceptable level of risk, the consolidated fundsoptimally and profitably is called _________.
  • integrated treasury
  • treasury management
  • merchant banking
  • none of the above
Q25 | What are the different types of underlying assets?
  • stocks
  • bonds
  • currency
  • stock indices