Financial Management

Multiple Choice
1. Basic objective of financial management is

a. Maximization of profit
b. Maximization of shareholders wealth
c. Ensuring financial discipline in the firm
d. All of these
2. Financial structure refers to

a. Short-term resources
b. All the financial resources
c. Long-term resources
d. All of these
3. What What do we understand from financial statements?

a. A group of reports regarding the organization’s various financial aspects.
b. A group of reports regarding the employee’s data.
c. A collection of reports pertaining to the organization’s vision and mission.
d. None of the above
4. Which of the following is a disadvantage of the financial statements.

a. The ability to tell if a business would be able to pay the debts
b. Determining the sources and use of cash in the organization
c. Chance of manipulation in the report for obtaining debt that the organization cannot
payback
d. A yearly report that the investors can refer to
5. What does a balance sheet indicate out of the following options

a. The demographic details of the employees
b. The overall organization’s liabilities, assets as well as stockholders’ equity
c. The report regarding the weekly work progress of the organization
6. Which of the following is not a part of the financial reports of the organization
a. Balance sheet
b. Income statements
c. Report with the vision and mission of the organization
d. Report regarding the flow of cash
7. Which of the following can be a part of financial reports?

a. The report regarding the financial result of the organization
b. The report with details about the financial position of the organization
c. The report regarding the flow of cash of the organization
d. All of the above

d. All of the above

d. All of the above
10. Which of the following can be a part of liabilities in the balance sheet
a. Debts
b. Dividends payable
c. Wages that are payable
d. All of the above
11. What are the limitations of the financial statements

a. There can be subjective interpretations of the financial statements as per the investors
b. There may be manipulation done in the financial statements such that the real profit-loss of
the organization is not shown to the investors
c. The financial statements give a detailed description of the cash flow of the organization
d. Both A and B
12. Which of the following can be called very important in terms of the financial statements
a. The report regarding ethics of the organization
b. The list of holidays in the organization
c. Cash flow statement, balance sheet and the income statement
d. List of investors for the organization
13. What can be some of the commonly depicted items in the financial statement of an organization
a. Cost of goods
b. Debts
c. Taxes
d. All of the above
14. What can be the most appropriate role of the income statement from the following options
a. The income statement helps in learning about the business’s performance on a yearly
basis in terms of the overall profit and other significant aspects of the business
b. It helps in learning about the shareholder’s equity, assets and liabilities.
c. It helps in understanding the decrease and increase in terms of the cash
d. It helps in showing the overall changes in cash
15. Out of all following four options, which is the most suitable with reference to a key feature of
cash flow
a. Cash flow helps in showing the increase as well as a decrease in the cash
b. Cash flow has three significant sections such as liabilities, assets and shareholders’ equity
c. Cash flow helps in showing the expenses as well as revenue of the business
d. Cash flow can be used for showing the businesses’ financial position
16. Out of the following four options what can be the most suitable key feature with regards to the
balance sheet
a. The balance sheet can help in showing the expenses as well as revenues of the business
b. The balance sheet helps in showing the business’s financial position and it has three
crucial sections such as liabilities, assets and shareholder’s equity
c. The balance sheet helps in showing the decrease as well as an increase in cash
d. The balance sheet helps in assessing the profitability
17. Which of the following four options cannot be called as a part of financial statements
a. Income Statement
b. Company’s Vision
c. Balance Sheet
d. Cash flow of the organization
18. Which of the following options is the most suitable for explaining the purpose of an income
statement
a. Profitability and financial position
b. Financial Position and movement of cash
c. Movement of cash and profitability
d. Profitability
19. What can be the measure of cash flow in keeping a record of the financial statement
a. Revenues, liabilities, expenses and shareholder’s equity
b. Decrease as well as an increase in cash along with revenue
c. Expenses, assets, shareholders’ equity as well as decrease and increase in the cash
d. Decrease and increase in cash
20. What can be the measure of the balance sheet in terms of keeping a record for the financial
statements
a. Assets, shareholder’s equity and liabilities
b. Expenses, Assets, Shareholder’s equity, liabilities and movement of cash
c. Decrease as well as an increase in cash along with assets, shareholder’s equity and liabilities
d. Profitability and expenses
21. Which of the following description can be the most suitable for an explanation of liabilities in the
balance sheet
a. Liabilities refer to things owned by the organization
b. Liabilities refer to the total sum of capital that the organization is indebted to others
c. Liabilities refer to the overall capital or the total net worth
d. Liabilities refer to the masses that may be either used or sold by the organization
22. Which of the following activities can be called a crucial part of the cash flow statements
a. Operating activities
b. Financing activities
c. Investing activities
d. All of the above
23. Equity shareholders are called

a. Owners of the company
b. Partners of the company
c. Executives of the company
d. Guardian of the company
24. Debentures represent

a. Fixed capital of the company
b. Permanent capital of the company
c. Fluctuating capital of the company
d. Loan capital of the company
25. Internal sources of capital are those that are

a. Generated through outsiders such as suppliers
b. Generated through loans from commercial banks
c. Generated through issue of shares
d. Generated within the business
26. In which market the newly issued securities and share are bought or sold during Initial Public
Offerings (IPO)?
a. Primary market
b. Secondary market
c. Insurance market
d. Investment market
27. The equity shares are classified as blue chip shares, growth shares, income shares, cyclical
shares, defensive shares and speculative shares by stock market on the basis of their
a. Risk exposure
b. Return potential
c. Both of these
d. None of these
28. Which market provides instruments for managing the financial risk?
a. Money market
b. Bond market
c. Derivatives market
d. Commodity market
29. Which market provide finance for long term purpose?

a. Money market
b. Capital market
c. Both of these
d. None of these
30. Equity shares are known as

a. Debt securities
b. Ownership securities
c. Both
31. Which market provide finance for short term purpose?

a. Money market
b. Capital market
c. Both of these
d. None of these
32. In which market the existing securities are bought and sold
a. Donation markets
b. Primary market
c. Secondary market
d. Insurance market
33. The bonds which are issued with a call premium is also known as
a. Forward
b. Callable
c. Swap
d. Future
34. Arrear dividend is paid to the Preference share otherwise known as

a. Participate Preference share’
b. Cumulative preference shares
c. Noncumulative preference shares
35. Preference shares are hybrid instruments containing the features of

a. Debentures
b. Equity shares
c. Debentures & Equity shares
d. None of these

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Multiple Choice

1. Basic objective of financial management is

2. Financial structure refers to

3. What What do we understand from financial statements?

4. Which of the following is a disadvantage of the financial statements.

5. What does a balance sheet indicate out of the following options

7. Which of the following can be a part of financial reports?

8. Which of the following can be a part of financial reports?

9. Which of the following can be a part of financial reports?

11. What are the limitations of the financial statements

23. Equity shareholders are called

24. Debentures represent

25. Internal sources of capital are those that are

29. Which market provide finance for long term purpose?

30. Equity shares are known as

31. Which market provide finance for short term purpose?

34. Arrear dividend is paid to the Preference share otherwise known as

35. Preference shares are hybrid instruments containing the features of

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