This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 15 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Consider the following statement: A low inventory turnover may be the result of A) Obsolescence of some of the stock. B) Slow-moving inventory. C) Both (a) and (b). D) Frequent stock-outs. Show Answer Correct Answer: C) Both (a) and (b). 2. What is the advantage of 'NPV Method'? A) This method can be allied where cash inflows are even. B) It takes into account the objective of maximum profitability. C) This method considers the entire economic life of the project. D) All of these. Show Answer Correct Answer: D) All of these. 3. Investors engage in ..... when they move funds into foreign currencies in order to take advantage of interest rates abroad that are higher than domestic interest rates. A) Long positions. B) Short positions. C) Interest arbitrage. D) Currency arbitrage. Show Answer Correct Answer: C) Interest arbitrage. 4. A nation wishing to reduce its current account deficit would be advised to A) Decrease domestic consumption spending. B) Increase private investment spending. C) Engage in more government spending. D) Reduce government taxes. Show Answer Correct Answer: A) Decrease domestic consumption spending. 5. If the stock turnover ratio is 4 times and the collection period is 30 days the operating cycle would be A) 30 days. B) 60 days. C) 90 days. D) 120 days. Show Answer Correct Answer: C) 90 days. 6. According to section..... of the Indian Partnership Act, 1932, dissolution of partnership between all the partners of a firm is called the 'dissolution of the firm'. A) 19. B) 29. C) 39. D) 49. Show Answer Correct Answer: C) 39. 7. The direct advantages of accounting do not include A) Comparison of results. B) Competitive advantage. C) Information to interested groups. D) Preparation of financial statements. Show Answer Correct Answer: B) Competitive advantage. 8. Which is the function of finance as per John J. Hampton? A) Managing funds. B) Managing assets. C) Liquidity function. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. Capital budgeting process involves A) Screening of the proposals. B) Evaluation of various proposals. C) Identification of investment proposals. D) All of the above. Show Answer Correct Answer: D) All of the above. 10. If Strike price is more than the spot price of the asset, the call option is known as A) European Option. B) American Option. C) In the Money Option. D) Out of Money Option. Show Answer Correct Answer: D) Out of Money Option. 11. Under the head 'current liabilities', the following items are disclosed in the Final Accounts of a company A) Acceptance or Bills Payable. B) Sundry creditors. C) Outstanding expenses and Advance Incomes. D) All of the above. Show Answer Correct Answer: D) All of the above. 12. Modigliani and Miller's dividend policy of a firm is A) Relevant. B) Irrelevant. C) Unrealistic. D) None of these. Show Answer Correct Answer: B) Irrelevant. 13. All the fully paid up shares of a company may be converted into stock if so authorised by the .....of a company. A) Company Law Board. B) Registrar of Companies. C) Articles of Association. D) Memorandum of Association. Show Answer Correct Answer: C) Articles of Association. 14. Accounting rate of return is the ratio of average value of A) Profit after tax to book value of the investment. B) Profit after tax to salvage value of the investment. C) Profit after tax to present value of the investment. D) Profit before tax to present value of the investment. Show Answer Correct Answer: A) Profit after tax to book value of the investment. 15. Which of the following is not true for cash Budget? A) Only revenue nature cash flows are shown. B) Proposed issue of share capital in shown as an inflow. C) All inflows would arise before outflows for those periods. D) That shortage or excess of cash would appear in a particular period. Show Answer Correct Answer: A) Only revenue nature cash flows are shown. 16. The basic rule of book-keeping "Debit all expenses and losses and credit all gains and incomes" is applicable to A) Real account. B) Personal account. C) Nominal account. D) None of the above. Show Answer Correct Answer: C) Nominal account. 17. Cost of depreciation fund computed as A) Profit. B) Dividend. C) Short term loan capital. D) Long term loan capital. Show Answer Correct Answer: D) Long term loan capital. 18. An important feature of a ..... is that the holder has the right, but not the obligation, to buy or sell currency. A) Swap. B) Foreign exchange option. C) Futures market contract. D) Foreign exchange arbitrage. Show Answer Correct Answer: B) Foreign exchange option. 19. The satisfactory ratio between share-holder's funds and long terms loan is ..... A) 1 : 1. B) 2:1. C) 3:1. D) 4:1. Show Answer Correct Answer: B) 2:1. 20. Which of the following is true for mutual funds in India? A) Entry load is allowed. B) Exit load is not allowed. C) Entry load is not allowed. D) Exit load allowed is some cases. Show Answer Correct Answer: D) Exit load allowed is some cases. ← PreviousNext →Related QuizzesEconomy QuizzesAccounting Quiz 1Accounting Quiz 2Accounting Quiz 3Accounting Quiz 4Accounting Quiz 5Accounting Quiz 6Accounting Quiz 7Accounting Quiz 8Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books