Finance Mcqs

Which of the following item provides the important function of shielding part of income from taxes?

A. Inventory
B. Supplies
C. Machinery
D. Depreciation

Depreciation expenses are deducted from net income for tax purpose.

In which form of Business, owners have limited liability?

A. sole proprietorship
B. partnership
C. joint stock company
D. none of the above

holders of a company have the liability up to the number of s purchased or amount invested only.

Which of the following ratios are particularly interesting to shortterm creditors?

A. Liquidity Ratios
B. Long-term Solvency Ratios
C. Profitability Ratios
D. Market Value Ratios

You just won a prize, you can either receive Rs. 1000 today or Rs. 1,050 in one year. Which option do you prefer and why if you can earn 5 percent on your money?

A. Rs. 1,000 because it has the higher future value
B. Rs. 1,000 because you receive it sooner
C. Rs. 1,050 because it is more money
D. Either because both options are of equal value

Which of the following is a special case of annuity, where the stream of cash flows continues forever?

A. Ordinary Annuity
B. Special Annuity
C. Annuity Due
D. Perpetuity

Quick Ratio is also known as_________?

A. Current Ratio
B. Acid-test Ratio
C. Cash Ratio
D. None of the given options

Balance Sheet is based upon which of the following formula?

A. Assets = Liabilities – Stockholder’s equity
B. Assets + Liabilities = Stockholder’s equity
C. Assets + Stockholder’s equity = Liabilities
D. Assets = Liabilities + Stockholder’s equity

Which of the following ratios are intended to address the firm’s financial leverage?

A. Liquidity Ratios
B. Long-term Solvency Ratios
C. Asset Management Ratios
D. Profitability Ratios

These ratios are intended to address the firm’s long-run ability to meet its obligations, or its financial leverage

The conflict of interest between stockholders and management is known as:

A. Agency problem
B. Interest conflict
C. Management conflict
D. Agency cost