MCQOPTIONS
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MCQOPTIONS
This section includes 233 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Business Administration (BBA) knowledge and support exam preparation. Choose a topic below to get started.
| 151. |
Which of the following statements about liquidity ratios is true? |
| A. | the higher the current ratio, the more likely a firm is able to pay its short-term obligations. |
| B. | the lower the quick ratios relative to the current ratio, the safer a firm is in terms of liquidity. |
| C. | the ratio of net working capital to total assets always lies between 0 and 1. |
| D. | relatively high current ratios are usually a sign of efficient working capital management. |
| Answer» B. the lower the quick ratios relative to the current ratio, the safer a firm is in terms of liquidity. | |
| 152. |
The primary purpose of the liquidity ratios is to determine |
| A. | how much working capital is tied up in inventory? |
| B. | the relative level of short-term debt. |
| C. | how well a firm is able to pay off short-term obligations? |
| D. | more than one of the above. |
| Answer» D. more than one of the above. | |
| 153. |
Creditors turnover ratio is also called |
| A. | stock turnover ratio. |
| B. | debtors velocity ratio. |
| C. | accounts payables ratio. |
| D. | working capital turnover ratio. |
| Answer» D. working capital turnover ratio. | |
| 154. |
Which ratio measures the number of times the receivables are rotated in a year in terms of sales? |
| A. | stock turnover ratio. |
| B. | debtors turnover ratio. |
| C. | creditors velocity ratio. |
| D. | working capital turnover ratio. |
| Answer» C. creditors velocity ratio. | |
| 155. |
The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is |
| A. | stock turnover ratio. |
| B. | debtors velocity ratio. |
| C. | creditors velocity ratio. |
| D. | working capital turnover ratio. |
| Answer» B. debtors velocity ratio. | |
| 156. |
The ratio shows the preference dividend as a proportion of profit available for shareholders is |
| A. | interest cover ratio. |
| B. | fixed dividend cover ratio. |
| C. | debt service coverage ratio. |
| D. | dividend yield ratio. |
| Answer» C. debt service coverage ratio. | |
| 157. |
The ratio establishes the relationship between profit before interest and tax and fixed interest charges is |
| A. | interest cover ratio. |
| B. | fixed dividend cover ratio. |
| C. | debt service coverage ratio. |
| D. | dividend yield ratio. |
| Answer» B. fixed dividend cover ratio. | |
| 158. |
Preliminary expenses is an example of . |
| A. | fixed assets. |
| B. | current assets. |
| C. | fictitious assets. |
| D. | current liabilities. |
| Answer» D. current liabilities. | |
| 159. |
The ratio which shows the proportion of profits retained in the business out of the current year’s profits is |
| A. | retained earnings ratio. |
| B. | payout ratio |
| C. | earnings per share. |
| D. | price earnings ratio |
| Answer» B. payout ratio | |
| 160. |
Proprietary ratio is a |
| A. | short-term solvency ratio. |
| B. | long-term solvency ratio. |
| C. | profitability ratio. |
| D. | turnover ratio. |
| Answer» C. profitability ratio. | |
| 161. |
Return on investment is a |
| A. | turnover ratios. |
| B. | short term solvency ratio. |
| C. | profitability ratios. |
| D. | long term solvency ratio. |
| Answer» D. long term solvency ratio. | |
| 162. |
Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales. |
| A. | 31 times |
| B. | 11 times |
| C. | 8 times |
| D. | 32 times |
| Answer» D. 32 times | |
| 163. |
The ratios which reveal the final result of the managerial policies and performance is . |
| A. | turnover ratios. |
| B. | profitability ratios. |
| C. | short term solvency ratio. |
| D. | long term solvency ratio. |
| Answer» C. short term solvency ratio. | |
| 164. |
Determine Working capital turnover ratio if, Current asset is Rs 1,50,000, current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000. |
| A. | 5 times |
| B. | 6 times |
| C. | 3 times |
| D. | 1.5 times |
| Answer» C. 3 times | |
| 165. |
What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold is Rs 2,00,000 & sales return is Rs10,000 ? |
| A. | 13 % |
| B. | 28% |
| C. | 26% |
| D. | 20% |
| Answer» E. | |
| 166. |
Return on properties funds is also known as. |
| A. | return on net worth |
| B. | return on shareholders fun |
| C. | return on the shareholders’ investment |
| D. | all the above |
| Answer» E. | |
| 167. |
Stock is considered as a liquid asset as anytime it can be converted into cash immediately. |
| A. | yes |
| B. | no |
| C. | only yes |
| D. | none of the above |
| Answer» C. only yes | |
| 168. |
When the concept of ratio is defined in respect to the item shown in the financial statements, it is termed as |
| A. | accounting ratio |
| B. | financial ratio |
| C. | costing ratio |
| D. | none of the above |
| Answer» C. costing ratio | |
| 169. |
Vertical analysis is made on the basis of __________. |
| A. | single set of financial statements |
| B. | multiple sets of financial statements |
| C. | different schedules attached to financial statements |
| D. | similar set of financial statements |
| Answer» B. multiple sets of financial statements | |
| 170. |
The relationship between two financial variables can be expressed in: |
| A. | pure ratio |
| B. | percentage |
| C. | rate or time |
| D. | all the above |
| Answer» E. | |
| 171. |
Horizontal analysis is done by analyzing ____________. |
| A. | quarterly statement |
| B. | half yearly statement |
| C. | financial statements of several years |
| D. | financial statements of a particular year |
| Answer» E. | |
| 172. |
Financial statements are meaningful and useful only when they are ___________. |
| A. | verified |
| B. | presented to owners |
| C. | analyzed and interpreted |
| D. | published |
| Answer» D. published | |
| 173. |
Comparative statement analysis sheet is __________. |
| A. | vertical analysis |
| B. | horizontal analysis |
| C. | either vertical or horizontal analysis |
| D. | neither vertical nor horizontal analysis |
| Answer» C. either vertical or horizontal analysis | |
| 174. |
In common size income statement analysis, which is taken as 100 percent? |
| A. | sales |
| B. | cost of goods sold |
| C. | purchases |
| D. | total assets |
| Answer» B. cost of goods sold | |
| 175. |
Trend analysis is significant for ____________. |
| A. | forecasting and budgeting |
| B. | profit planning |
| C. | capital rationing |
| D. | working capital management |
| Answer» C. capital rationing | |
| 176. |
Financial statements are ____________. |
| A. | anticipated facts |
| B. | recorded facts |
| C. | estimated of facts |
| D. | unknown facts |
| Answer» C. estimated of facts | |
| 177. |
The statement of cash flows tells us |
| A. | accounting profit or loss |
| B. | how cash was created |
| C. | actual profit or loss |
| D. | two of the above |
| Answer» C. actual profit or loss | |
| 178. |
The primary sections of a statement of cash flows are: |
| A. | cash flows from investing, operating, and financing activities. |
| B. | cash flows from investing and operating activities plus investments. |
| C. | cash flows from investing, financing, and accounting activities. |
| D. | cash flows from investing, operating, financing, and accounting activities. |
| Answer» B. cash flows from investing and operating activities plus investments. | |
| 179. |
Which of the following are Non-current assets? |
| A. | land, building and plant |
| B. | leasehold property |
| C. | computer software |
| D. | all of the above |
| Answer» E. | |
| 180. |
__________ analysis is the process of studying a series of ratios for a company and/or industry over time. |
| A. | dupont |
| B. | trend |
| C. | common size |
| D. | all of the above. |
| Answer» C. common size | |
| 181. |
Which of the following is NOT a key ratio in the prediction of bankruptcy as developed by Edward Altman? |
| A. | debt to equity |
| B. | current ratio |
| C. | retained earnings as a percent of total assets |
| D. | total assets |
| Answer» B. current ratio | |
| 182. |
Cash inflows arise from _____ assets, ________ liabilities, and ___________ stockholders' equity. |
| A. | increasing; increasing; decreasing |
| B. | increasing; decreasing; decreasing |
| C. | decreasing; increasing; increasing |
| D. | decreasing; increasing; decreasing |
| Answer» D. decreasing; increasing; decreasing | |
| 183. |
The ________ does not represent continuing operations in any way, but is simply a snapshot of the total worth of a firm at a given point in time. |
| A. | income statement |
| B. | balance sheet |
| C. | sources and uses of funds statement |
| D. | none of the above |
| Answer» C. sources and uses of funds statement | |
| 184. |
The major device for measuring the profitability of a firm over a defined period of time is the |
| A. | income statement. |
| B. | balance sheet. |
| C. | statement of cash flow. |
| D. | none of the above. |
| Answer» B. balance sheet. | |
| 185. |
Interpretation of accounts is the |
| A. | art and science of translating the figures |
| B. | to know financial strengths and weaknesses of a business |
| C. | to know the causes for the prevailing performance of business |
| D. | all of the above |
| Answer» E. | |
| 186. |
Which of the following are techniques, tools or methods of analysis and interpretation of financial statements? |
| A. | ratio analysis |
| B. | average analysis |
| C. | trend analysis |
| D. | all of the above |
| Answer» E. | |
| 187. |
Analysis of any financial Statement comprises |
| A. | balance sheet |
| B. | p&l account |
| C. | trading account |
| D. | all of the above |
| Answer» E. | |
| 188. |
Incorrect cash flow planning can lead to ________ |
| A. | solvency |
| B. | insolvency |
| C. | bankruptcy |
| D. | failure |
| Answer» D. failure | |
| 189. |
________is a simply the amount of cash coming in to a business. |
| A. | cash flow |
| B. | inflow |
| C. | both a and b |
| D. | none of the above. |
| Answer» B. inflow | |
| 190. |
Which of the following is technique of financial statement analysis? |
| A. | commonâ€size statement |
| B. | comparative statement |
| C. | trend analysis |
| D. | all |
| Answer» E. | |
| 191. |
The process of comparing various financial factors of a company over a period of time is known as … |
| A. | interâ€firm comparison |
| B. | ratio analysis |
| C. | intraâ€firm comparison |
| D. | interâ€industry comparison |
| Answer» D. interâ€industry comparison | |
| 192. |
The process of explaining the meaning, significance and relationship between two financial factors is called … |
| A. | summarization |
| B. | analysis |
| C. | interpretation |
| D. | none |
| Answer» D. none | |
| 193. |
The analysis and interpretations of the financial statement will reveal … |
| A. | the financial position |
| B. | the profitability |
| C. | none |
| D. | both |
| Answer» E. | |
| 194. |
The balance sheet shows … |
| A. | the source of working capital |
| B. | the change in working capital |
| C. | both |
| D. | none |
| Answer» E. | |
| 195. |
In financial statement the stock is valued at cost or market price whichever is less on the basis of… |
| A. | accounting concepts |
| B. | accounting conventions |
| C. | accounting principles |
| D. | none |
| Answer» C. accounting principles | |
| 196. |
What is followed while preparing the financial statements? |
| A. | accounting conventions |
| B. | accounting principles |
| C. | accounting concepts |
| D. | all |
| Answer» E. | |
| 197. |
In financial statements, the fixed assets are shown at … |
| A. | market price |
| B. | cost price |
| C. | replacement price |
| D. | none |
| Answer» B. cost price | |
| 198. |
Which of the following is the main objective of a financial statement? |
| A. | to know the solvency |
| B. | to know the debt capacity |
| C. | to know the earning capacity |
| D. | all |
| Answer» E. | |
| 199. |
The term financial statement refers to… |
| A. | income statement |
| B. | cash flow and fund flow |
| C. | balance sheet |
| D. | all |
| Answer» E. | |
| 200. |
The focal point of financial management in a firm is: |
| A. | the number and types of products or services provided by the firm. |
| B. | the minimization of the amount of taxes paid by the firm. |
| C. | the creation of value for shareholders. |
| D. | the dollars profits earned by the firm. |
| Answer» D. the dollars profits earned by the firm. | |