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Financial Management MCQ Questions and Solutions with Explanations | Commerce

Financial Management MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Financial Management MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-2 section-4

Each section contains 100 MCQs on Financial Management .
11
Stockholders that do not get benefits even if company's earnings grow are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Stockholders that do not get benefits even if company's earnings grow are classified as preferred stockholders. Preferred shareholders have priority over common stockholders when it comes to dividends, which generally yield more than common stock and can be paid monthly or quarterly.
12
In balance sheet, sum of retained earnings and common stock are considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
In balance sheet, sum of retained earnings and common stock are considered as common equity. Common equity is the amount that all common shareholders have invested in a company. Most importantly, this includes the value of the common shares themselves.
13
Securities with less predictable prices and have longer maturity time is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
Securities with less predictable prices and have longer maturity time is considered as short-term investments. Short-term investments are designed to provide considerable returns in a short period of time, which could be a few months or even a year.
14
Number of shares outstanding if it is divided by net income for using to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Number of shares outstanding if it is divided by net income for using to calculate earning per share. Earnings per share or EPS is an important financial measure, which indicates the profitability of a company. It is calculated by dividing the company's net income with its total number of outstanding shares.
15
Purchase cost of assets over its useful life is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Purchase cost of assets over its useful life is classified as depreciation. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.
16
Process of calculating future value of money from present value is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Process of calculating future value of money from present value is classified as compounding. Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.
17
Type of basic financial statements consist of
Discuss
Answer & Solution
Answer: Option D
Solution:
Type of basic financial statements consist of balance sheet and income statement, statement of retained earning and statement of cash flows.
18
If common shares outstanding are 50,000,000 and book value per share is Rs 19.92 then total common equity will be
Discuss
Answer & Solution
Answer: Option A
Solution:
Total Equity = Shares outstanding × Book value per share
= 50,000,000 × 19.92
= Rs. 996,000,000.00
19
An income available for shareholders after deducting expenses and taxes from revenues is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
An income available for shareholders after deducting expenses and taxes from revenues is classified as net income. Net income represents the amount of money remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue.
20
Security present value is Rs 100 and future value is Rs 150 after 10 years and value of 'I = interest rate' will be
Discuss
Answer & Solution
Answer: Option A
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