Financial Management Set 10

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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.

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