Finance MCQs

Page No. 35

Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date?


aIncome Statement


bBalance Sheet


cCash Flow Statement


dRetained Earning Statement


View Answer Balance Sheet

When the market’s required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:


aPremium


bDiscount


cPar


dCannot be determined without more information


View Answer Premium

Mr. Y and Mr. Z are planning to share their capital to run a business. They are going to employ which of the following type of business?


a Sole-proprietorship


bPartnership


cCorporation


dNone of the given options


View Answer Partnership

Which of the following ratios are particularly interesting to short term creditors?


aLiquidity Ratios


bLong-term Solvency Ratios


cProfitability Ratios


dMarket Value Ratios


View Answer Liquidity Ratios

Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n):


aOperating activity


bInvesting activity


cFinancing activity


dNone of the given options


View Answer Investing activity

If a firm uses cash to purchase inventory, its quick ratio will?


aIncrease


bDecrease


cRemain unaffected


dBecome zero


View Answer Decrease

Which of the following set of ratios relates the market price of the firm’s common stock to selected financial statement items?


aLiquidity Ratios


bLeverage Ratios


cProfitability Ratios


dMarket Value Ratios


View Answer Market Value Ratios

Which one of the following terms refers to the risk arises for bond owners from fluctuating interest rates?


aFluctuations Risk


bInterest Rate Risk


cReal-Time Risk


dInflation Risk


View Answer Interest Rate Risk

How many years will it take to pay off a Rs. 11,000 loan with a Rs. 1,241.08 annual payment and a 5% interest rate?


a6 years


b12 years


c24 years


d48 years


View Answer 12 years

Which of the following is measured by retention ratio?


aOperating efficiency


bAsset use efficiency


cFinancial policy


dDividend policy


View Answer Dividend policy

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