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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 10

Q1 | In stock dividend:
  • Authorized capital always increases
  • Paid up capital always increases
  • Face value per share decreases
  • Market price for share decreases
Q2 | Which of the following is not considered in Lintner's Model ?
  • Dividend payout ratio,
  • Current EPS,
  • Speed of Adjustment,
  • Preceding year EPS
Q3 | Which of the following is not relevant for dividend payment for a year ?
  • Cash flow position
  • Profit position,
  • Paid up capital,
  • Retained Earnings
Q4 | Cash Budget does not include
  • Dividend Payable
  • Postal Expenditure,
  • Issue of Capital,
  • Total Sales Figure.
Q5 | Which of the following is not a motive to hold cash?
  • Transactionary Motive,
  • Pre-scautionary Motive,
  • Captal Investment,
  • None of the above.
Q6 | Cheques deposited in bank may not be available for immediate use due to
  • Payment Float
  • Recceipt Float
  • Net Float,
  • Playing the Float.
Q7 | Difference between between the bank balance as per Cash Book and Pass Book maybe due to:
  • Overdraft,
  • Float,
  • Factoring,
  • None of the above.
Q8 | Concentration Banking helps in
  • Reducing Idle Bank Balance
  • Increasing Collection,
  • Increasing Creditors,
  • Reducing Bank Transactions.
Q9 | The Transaction Motive for holding cash is for
  • Safety Cushion
  • Daily Operations,
  • Purchase of Assets
  • Payment of Dividends.
Q10 | Miller-Orr Model deals with
  • Optimum Cash Balance,
  • Optimum Finished goods,
  • Optimum Receivables,
  • All of the above.
Q11 | Float management is related to
  • Cash Management,
  • Inventory Management,
  • Receivables Management,
  • Raw Materials Management
Q12 | Which of the following is not an objective of cash management ?
  • Maximization of cash balance
  • Minimization of cash balance
  • Optimization of cash balance
  • Zero cash balance.
Q13 | Which of the following is not true of cash budget ?
  • Cash budget indicates timings of short-term borrowing,
  • Cash budget is based on accrual concept
  • Cash budget is based on cash flow concept
  • Repayment of principal amount of law is shown in cash budget.
Q14 | Baumol's Model of Cash Management attempts to:
  • Minimise the holding cost,
  • Minimization of transaction cost,
  • Minimization of total cost,
  • Minimization of cash balance
Q15 | Which of the following is not considered by Miller-Orr Model?
  • Variability in cash requirement
  • Cost of transaction,
  • Holding cost,
  • Total annual requirement of cash.
Q16 | Marketable securities are primarily
  • Equity shares,'
  • Preference shares,
  • Fixed deposits with companies
  • Short-term debt investments.
Q17 | 5Cs of the credit does not include
  • Collateral
  • Character,
  • Conditions,
  • None of the above
Q18 | Which of the following is not an element of credit policy?
  • Credit Terms
  • Collection Policy
  • Cash Discount Terms,
  • Sales Price
Q19 | Ageing schedule incorporates the relationship between
  • Creditors and Days Outstanding
  • Debtors and Days Outstanding
  • Average Age of Directors,
  • Average Age of All Employees.
Q20 | Bad debt cost is not borne by factor in case of
  • Pure Factoring
  • Without Recourse Factoring,
  • With Recourse Factoring
  • None of the above
Q21 | Which of the following is not a technique of receivables Management?
  • Funds Flow Analysis
  • Ageing Schedule,
  • Days sales outstanding
  • Collection Matrix.
Q22 | Which of the following is not a part of credit policy?
  • Collection Effort
  • Cash Discount,
  • Credit Standard
  • Paying Practices of debtors.
Q23 | Which is not a service of a factor?
  • Administrating Sales Ledger
  • Advancing against Credit Sales,
  • Assuming bad debt losses,
  • None of the above.
Q24 | Credit Policy of a firm should involve a trade-off between increased
  • Sales and Increased Profit
  • Profit and Increased Costs of Receivables,
  • Sales and Cost of goods sold,
  • None of the above.
Q25 | Out of the following, what is not true in respect of factoring?
  • Continuous Arrangement between Factor and Seller,
  • Sale of Receivables to the factor,
  • Factor provides cost free finance to seller
  • None of the above.