Finance Mcqs

Who of the following make a broader use of accounting information?

A. Accountants
B. Financial Analysts
C. Auditors
D. Marketers

Financial analysts make extensive use of accounting information; they are some of the most important end users. Understanding finance helps accountants recognize what types of information are particularly valuable and, more generally, how accounting information is actually used (and abused) in practice.

A. Net loss
B. Net worth
C. Markup
D. Markdown

In case of international business which of the given factor(s) must be considered?

A. Role of foreign exchange
B. Balance of payments
C. Attitude of Governments
D. All of the given options

If you have Rs. 850 and you plan to save it for 4 years with an interest rate of 10%, what will be the future value of your savings?

A. Rs. 1,000
B. Rs. 1,244
C. Rs. 1,331
D. Rs. 1,464

FV = PV * (1+ i) ^n
= 850 * (1+0.1)^4
= 1244

Which of the following measure reveals how much profit a company generates with the money holders have invested?

A. Profit Margin
B. Return on Assets
C. Return on Equity
D. Debt-Equity Ratio

A firm reports total liabilities of Rs. 300,000 and owner’s equity of Rs. 500,000. What would be the total worth of the firm’s assets?

A. Rs. 300,000
B. Rs. 500,000
C. Rs. 800,000
D. Rs. 1100,000

Assets = Liabilities + Owner’s Equity
= 300,000 + 500,000
= 800,000

Which of the following statement is TRUE regarding debt?

A. Debt is an ownership interest in the firm.
B. Unpaid debt can result in bankruptcy or financial failure.
C. Debt provides the voting rights to the bondholders.
D. Corporation’s payment of interest on debt is fully taxable.

If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will be the worth of your amount after 4 years if interest is compounded annually?

A. Rs. 5,400
B. Rs. 5,900
C. Rs. 6,600
D. Rs. 6,802

FV = PV * (1+ i) ^n
= 5,000 (1+0.08) ^4
= 6802

Which of the following statement about bond ratings is TRUE?

A. Bond ratings are typically paid for by a company’s bondholders.
B. Bond ratings are based solely on information acquired from sources other than the bond issuer.
C. Bond ratings represent an independent assessment of the credit-worthiness of bonds.
D. None of the given options

Which of the following ratios is NOT from the set of Asset Management Ratios?

A. Inventory Turnover Ratio
B. Receivable Turnover
C. Capital Intensity Ratio
D. Return on Assets

The capital intensity ratio is a financial calculation measuring how much a company is invested in total assets compared to how much it is earning in revenue. Where as Asset turn over ratio determines how efficiently or effectively an organization is using its assets.