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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-4 section-4

Each section contains 100 MCQs on Financial Management .
31
Left side of balance sheet states the
Discuss
Answer & Solution
Answer: Option B
Solution:
Left side of balance sheet states the liabilities. A standard company balance sheet has two sides: assets, on the left and financing, which itself has two parts, liabilities and ownership equity, on the right. Balance sheets are usually presented with assets in one section and liabilities and net worth in the other section with the two sections "balancing".
32
Intangible assets such as copyrights, trademarks and patents are applicable for
Discuss
Answer & Solution
Answer: Option B
Solution:
Intangible assets such as copyrights, trademarks and patents are applicable for amortization. Amortization is an accounting technique used to periodically lower the book value of a loan or intangible asset over a set period of time.
33
A schedule which shows interest constitutes reduced principal and unpaid balance is considered as
Discuss
Answer & Solution
Answer: Option C
Solution:
A schedule which shows interest constitutes reduced principal and unpaid balance is considered as amortization schedule. An amortization schedule is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term.
34
Net income is Rs 2250 and noncash charges are Rs 1150 then net cash flow would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Bet Cash Flow = Net income - Non cash charges
= 2250 - 1150 = Rs. 1100.
35
Lottery payoffs and payment for rental apartments are examples of
Discuss
Answer & Solution
Answer: Option C
Solution:
Lottery payoffs and payment for rental apartments are examples of annuity due. An annuity due is a repeating payment that is made at the beginning of each period, such as a rent payment.
36
Finance company providing loans at 12% with 2 compounding periods per year, periodic rate is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Finance company providing loans at 12% with 2 compounding periods per year, periodic rate is classified as 6% per year.
37
Accounts payable, accruals and notes payables are listed on balance sheet as
Discuss
Answer & Solution
Answer: Option B
Solution:
Accounts payable, accruals and notes payables are listed on balance sheet as current liabilities. Current liabilities are a company's debts or obligations that are due within one year or within a normal operating cycle.
38
A loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
A loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as amortized loan. An amortized loan is a loan with scheduled periodic payments that are applied to both principal and interest.
39
An interest rate is 5%, number of period are 3, and present value is Rs 100,and then future value will be
Discuss
Answer & Solution
Answer: Option A
Solution:
FV = PV ( 1 + r/100 )ⁿ
= 100 ( 1 + 5/100 )³
= Rs. 115.76
40
A method of inventory recording which produces high inventories in balance sheet is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
A method of inventory recording which produces high inventories in balance sheet is classified as First in first out. First in, first out (FIFO) is an asset-management and valuation method in which the assets produced or acquired first are sold, used or disposed of first and may be used by an individual or a corporation.