Deck 1: Business Finance, Financial Statements, and Accounting Information

Question 1

Business finance includes........

A)procurement of funds and utilization of funds
B)management of funds
C)allocation
D)insurance

Answer 1

procurement of funds and utilization of funds

Question 2

Funds are required for the..........

A)purchase of land & building
B)purchase of machinery
C)purchase of another fixed asset
D)all of the above

Answer 2

all of the above

Question 3

Which report gives a review on the profitability of a business?

A)statement of changes in equity
B)cash flow statement
C)balance sheet
D)income statement

Answer 3

income statement

Question 4

The term 'Financial Statement' covers

A)profit & loss statement
B)balance sheet and profit & loss statement appropriation account
C)profit & loss statement and balance sheet
D)all of above are false

Question 5

Which of the following is true about financial statements?
A-Financial statement gives a summary of accounts.
B- Financial statements can be stated asrecorded facts.

A)only a
B)only b
C)both a and b
D)none of the above

Question 6

Subtracting all expenses from revenues yields?

A)net profit / net loss
B)carrying value
C)long term assets
D)net liabilities

Question 7

Balance sheet of a company is required to be prepared in the format given in ………………………

A)schedule iii part ii
B)schedule iii part i
C)schedule iii part iii
D)table a

Question 8

As per Companies Act, the Balance Sheet of a company is required to be presented in ………………………

A)horizontal form
B)vertical form
C)either horizontal or vertical form
D)neither of the above

Question 9

Which of the following is not required to be prepared under the Companies Act?

A)statement of profit and loss
B)balance sheet
C)report of director's and auditor's
D)funds flow statement

Question 10

According to prescribed order of assets in a Company's Balance Sheet ……………………… assets should be shown first of all.

A)non-current assets
B)current assets
C)current investments
D)loans and advances

Question 11

Calls in Arrears appear in a Company's Balance Sheet under ………………..

A)reserve & surplus
B)shareholder's funds
C)contingent liabilities
D)short-term borrowings

Question 12

Calls in advance appear in a Company's Balance Sheet under ………………..

A)share capital
B)current liability
C)long-term borrowings
D)reserve & surplus

Question 13

Bills Receivables appear in a Company's Balance Sheet under the Sub-head ……………………..

A)current investments
B)cash equivalents
C)trade receivables
D)short term loans and advances

Question 14

Which of the following options is not recorded in the Balance sheet?

A)cash
B)rent expenses
C)building
D)goodwill

Question 15

Which of the given area is NOT addressed by Business Finance?

A)financing
B)investing
C)managing day today expenses
D)none of the given options

Question 16

Which of the following is measured by profit margin?

A)operating efficiency
B)asset use efficiency
C)financial policy
D)dividend policy

Question 17

Business Finance addresses which of the following?

A)capital budgeting
B)capital structure
C)working capital management
D)all of the given options

Question 18

Finance is vital for which of the following business activity (activities)?

A)marketing research
B)product pricing
C)design of marketing and distribution channels
D)all of the given options

Question 19

Which of the following refers to the difference between the sale price and cost of inventory?

A)net loss
B)net worth
C)markup
D)markdown

Question 20

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

A)accountants
B)financial analysts
C)auditors
D)marketers

Question 21

Which of the following statement is considered as the accountant's snapshot of firm's accounting value as of a particular date?

A)income statement
B)balance sheet
C)cash flow statement
D)retained earning statement

Question 22

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

A)agency problem
B)interest conflict
C)management conflict
D)agency cost