This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The need of capital budgeting in a firm arises on account of the A) Selection of the best project. B) Analysis of capital expenditure. C) Control over capital expenditure. D) All of the above. Show Answer Correct Answer: D) All of the above. 2. A risk-free stock has a beta value equals A) Zero. B) - 1. C) 0.5. D) 1. Show Answer Correct Answer: A) Zero. 3. Which statement is true about financial management? A) The maximisation of profit is often considered as an implied objective of a firm. B) The wealth of a firm is defined as the market price of the firm's stock. C) An option is a claim without any liability. D) All of the above. Show Answer Correct Answer: D) All of the above. 4. Ratio Analysis can be used to study liquidity, turnover, profitability, etc. of a firm. What does Debt-Equity Ratio help to study? A) Turnover. B) Liquidity. C) Solvency. D) Profitability. Show Answer Correct Answer: C) Solvency. 5. The issue of sweat equity shares is authorised by a special resolution passed by the company in the A) Board meeting. B) General meeting. C) Statutory meeting. D) None of the above. Show Answer Correct Answer: B) General meeting. 6. A low stock turnover ratio is not desirable because it reveals the A) Accumulation of obsolete stock. B) High cost of goods sold. C) Both (a) and (b). D) Carrying of too much stock. Show Answer Correct Answer: C) Both (a) and (b). 7. Comparison of financial variables of a business enterprise over a period of time is called A) Vertical analysis. B) Standard analysis. C) Inter-firm analysis. D) Intra-firm analysis. Show Answer Correct Answer: D) Intra-firm analysis. 8. If the current ratio is 2 : 1 and working capital is Rs. 60,000, What is the value of the current assets? A) Rs. 1,00,000. B) Rs. 1,20,000. C) Rs. 1,40,000. D) Rs. 1,60,000. Show Answer Correct Answer: B) Rs. 1,20,000. 9. When the proprietor withdraws or takes away some goods from the business for his personal use or consumption, he records the withdrawals at A) Cost price. B) Selling price. C) Selling price or cost price whichever is lower. D) Selling price or cost price whichever is higher. Show Answer Correct Answer: A) Cost price. 10. The satisfactory ratio between internal and external equity is ..... A) 1 : 1. B) 1:2. C) 2:1. D) 3:1. Show Answer Correct Answer: A) 1 : 1. 11. Which is called as Dividend Ratio Method? A) Asset Method. B) Equity Method. C) Debt Equity Method. D) Dividend Yield Method. Show Answer Correct Answer: D) Dividend Yield Method. 12. Dividend is allocated to the shareholders of A) The Debtors. B) The Creditors. C) The Customer. D) The Company. Show Answer Correct Answer: D) The Company. 13. For advanced countries such as the United States, tariffs on imported raw materials tend to be A) The highest of all tariffs. B) Equal to tariffs on imported manufactured goods. C) Lower than tariffs on imported manufactured goods. D) Higher than tariffs on imported manufactured goods. Show Answer Correct Answer: C) Lower than tariffs on imported manufactured goods. 14. Working Capital Turnover measures the relationship of Working Capital with A) Sales. B) Stock. C) Purchases. D) Fixed Assets. Show Answer Correct Answer: D) Fixed Assets. 15. Which of the following factors should be considered while estimating the useful life of a depreciable asset? A) Obsolescence. B) Expected physical wear and tear. C) Legal or other limits on the use of asset. D) All of the above. Show Answer Correct Answer: D) All of the above. 16. Which of the following will cause an increase in bond values? A) Decrease in Coupon Rate. B) Increase in Redemption Period. C) Increase in Redemption Amount. D) Decrease in Redemption Amount. Show Answer Correct Answer: C) Increase in Redemption Amount. 17. Bills of exchange are shown under the head A) Fixed Assets. B) Current Assets. C) Loans and Advances. D) Miscellaneous expenditures. Show Answer Correct Answer: C) Loans and Advances. 18. There is deterioration in the management of work capital of XYZ Ltd. What does it refer to? A) That sales has decreased. B) That the profitability has gone up. C) That capital employed has reduced. D) That debtors collection period has increased. Show Answer Correct Answer: D) That debtors collection period has increased. 19. Which is the type of dividend? A) Interest. B) Cash Dividend. C) Flexible Capital. D) Profit cum-reserve. Show Answer Correct Answer: B) Cash Dividend. 20. Which is the element of capital budgeting decision? A) A long term effect. B) A long term investment. C) Capital expenditure project. D) All of the above. Show Answer Correct Answer: D) All of the above. ← PreviousNext →Related QuizzesEconomy QuizzesAccounting Quiz 1Accounting Quiz 2Accounting Quiz 3Accounting Quiz 4Accounting Quiz 5Accounting Quiz 7Accounting Quiz 8Accounting Quiz 9Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books