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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Working capital Set 2

Q1 | What are people who buy or sell in the market to make profits called?
  • hedgers
  • speculators
  • arbitrageurs
  • none of the above
Q2 | Which of the following is a technique that helps the exporter to sell the receivables toany bank or financial institution without recourse?
  • forfeiting
  • leading & lagging
  • derivatives
  • netting
Q3 | Money market financial services not include:
  • bill discounting
  • merchant banking
  • leasing
  • securitization
Q4 | Factoring involves:
  • providing short term loan
  • providing long term loan
  • financing of export receivables
  • management of receivables of borrower
Q5 | The tools of treasury management does not include:
  • foreign exchange management
  • cash management
  • receivable management
  • risk management
Q6 | Under which type of bank borrowing can a borrower obtain credit from a bankagainst its bills?
  • letter of credit
  • cash
  • purchase or discounting of bills
  • working capital loan
Q7 | The factors that affect dividend policy are:
  • tax consideration
  • privatization
  • foreign investment
  • working cash flow
Q8 | To financial analysts, "working capital" means the same thing as __________.
  • total assets
  • fixed assets
  • current assets
  • current assets minus current liabilities.
Q9 | Which of the following would be consistent with an aggressive approach to financingworking capital?
  • financing short-term needs with short-term funds.
  • financing permanent inventory buildup with long-term debt.
  • financing seasonal needs with short-term funds.
  • financing some long-term needs with short-term funds.
Q10 | Which of the following would be consistent with a conservative approach to financingworking capital?
  • financing short-term needs with short-term funds.
  • financing short-term needs with long-term debt.
  • financing seasonal needs with short-term funds.
  • financing some long-term needs with short-term funds.
Q11 | -Which of the following would be consistent with a hedging (maturity matching)approach to financing working capital?
  • financing short-term needs with short-term funds.
  • financing short-term needs with long-term debt.
  • financing seasonal needs with long-term funds.
  • financing some long-term needs with short-term funds.
Q12 | The amount of current assets that varies with seasonal requirements is referred toas __________ working capital.
  • permanent
  • net
  • temporary
  • gross
Q13 | A budget is a plan of action expressed in…
  • financial terms
  • non?financial terms
  • both
  • subjective matter
Q14 | Budget is prepared for a…
  • indefinite period
  • definite period
  • period of one year
  • six months
Q15 | A budget is tool which helps the management in planning and control of…
  • all business activities
  • production activities
  • purchase activities
  • sales activities
Q16 | Budgetary control system acts as a friend, philosopher and guide to the…
  • management
  • share holders
  • creditors
  • employees
Q17 | Budgetary control system defines the objectives and policies of the…
  • production department
  • finance department
  • marketing department
  • all
Q18 | Budgetary control facilitates easy introduction of the…
  • marginal costing
  • ratio analysis
  • standard costing
  • subjective matter
Q19 | Budgetary control helps the management in…
  • obtaining bank credit
  • issue of shares
  • getting grants from government
  • all of these
Q20 | Budgetary control system helps the management to eliminate…
  • undercapitalization
  • overcapitalization
  • both
  • subjective matter
Q21 | Budgetary control provides a basis for…
  • bonus shares
  • rights shares
  • remuneration plans
  • none
Q22 | Budgetary control helps to introduce a suitable incentive and remuneration basedon…
  • changes in government policies
  • inflationary conditions
  • both
  • none
Q23 | The success of budgetary control system depends upon the willing cooperation of…
  • shareholders
  • management
  • creditors
  • all the functional areas of management
Q24 | Recording of actual performance is….
  • an advantage of budgetary control
  • a step in budgetary control
  • a limitation of budgetary control
  • none
Q25 | Budgetary control __________ replace management in decision?making.
  • can
  • cannot
  • sometimes
  • inadequate data