Working capital Set 2
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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