Question 1

From the given alternatives, which one is not the quality of Finance Manager ?

Accepted Answer

The quality of being "good looking" is not a professional or functional requirement for a Finance Manager. The role demands skills such as intelligence, positive thinking, and decision-making capabilities, which are directly related to job performance.

Question 2

The operating budget which is usually prepared in terms of revenue and expenses is known as ?

Accepted Answer

B

Question 3

From the Given alternatives, Which is the example of Direct Cost ?

Accepted Answer

Direct costs are those that can be directly attributed to the production of a specific product or service. The purchase of raw material is a direct cost because it is directly associated with the production process.

Question 4

From the Given alternatives, Which is the example of Fixed Cost ?

Accepted Answer

Factory rent is an example of a fixed cost because it remains constant regardless of the level of production or sales activity.

Question 5

From the Given alternatives, Which is the example of Selling and Distribution Cost ?

Accepted Answer

All three alternatives, depreciation on delivery van, free samples, and showroom rent, are examples of selling and distribution costs. These costs are associated with the delivery, promotion, and selling of products.

Question 6

Sales in 1st Quarter of 2019, is achieved at 200 units at selling price of Rs. 40 per unit. If budget for second quarter is anticipated at, increase in units by 10% and Selling price by 25%, What would be budgeted Sales for second quarter ?

Accepted Answer

The budgeted sales for the second quarter can be calculated as follows: First, calculate the increased number of units and selling price. Units in the second quarter = 200 units + (10% of 200 units) = 200 units + 20 units = 220 units. Selling price in the second quarter = Rs. 40 + (25% of Rs. 40) = Rs. 40 + Rs. 10 = Rs. 50 per unit. Therefore, budgeted sales for the second quarter = 220 units * Rs. 50 per unit = Rs. 11,000.

Question 7

If total cost of production for a product is Rupees 80 per unit, And company want to achieve 20% profit on sale, Then what would be selling price per unit ?

Accepted Answer

The answer of If total cost of production for a...

Question 8

Advertiing expenses are divided between North, West and South Zone in the ratio of 5:9:4 respectively. If total Advertising expenses are Rs. 3,60,000, How much should be allocated to West Zone ?

Accepted Answer

The total ratio is 5+9+4 = 18 parts. The West Zone's share is 9 parts. So, the West Zone's allocation is (9/18) * 3,60,000 = Rs. 1,80,000.

Question 9

In capital budgeting, term NPV method stands for ?

Accepted Answer

NPV stands for Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Question 10

Equity Share Cpaital is also known as ?

Accepted Answer

Equity Share Capital is referred to as "own capital" because it represents funds raised by the company through the sale of its own shares, making shareholders part owners of the company.

Question 11

Which type of debentures are repaid by the company within or at the end of specified period ?

Accepted Answer

Redeemable debentures are specifically designed to be repaid by the issuing company either at the end of a specified period or before that period, in accordance with the terms of issue.

Question 12

In Marginal Costing, what will happen to Break Even Point [BEP,] if Fixed Cost is increased by 10% ?

Accepted Answer

When fixed costs increase, the total costs to cover at each level of production rise, leading to a higher break-even point since more units must be sold to cover the increased fixed costs.

Question 13

What will you get by using the formula:- Contribution/Sales x 100 ?

Accepted Answer

The formula Contribution/Sales x 100 calculates the Profit Volume Ratio (PVR), also known as the Contribution Margin Ratio. This ratio indicates what percentage of sales contributes to the fixed costs and profit, after variable costs have been covered.

Question 14

If Profit Volume ratio is 25% and Fixed Cost is Rs. 3,00,000 then, what would be Break Even Sales ?

Accepted Answer

The Break Even Sales can be calculated using the formula: Break Even Sales = Fixed Costs / Profit Volume Ratio. Here, it is Rs. 3,00,000 / 0.25 = Rs. 12,00,000.

Question 15

Direct and Indirect Cost are the classifications based on which type ?

Accepted Answer

Direct and indirect costs are classified based on traceability. Direct costs can be directly traced to a specific cost object, such as a product or a department, whereas indirect costs cannot be directly traced to a specific cost object and are instead allocated based on some reasonable basis.

Question 16

Shareholders Wealth is calculate by which formula ?

Accepted Answer

Shareholders' wealth is calculated by multiplying the number of shares they own by the market value per share. This gives the total market value of the equity they hold in the company.

Question 17

The minimum rate of return that a firm must earn in order to satisfy the expectations of its investor is called as ?

Accepted Answer

The minimum rate of return a firm must earn to meet its investors' expectations is known as the cost of capital. This rate reflects the cost of financing the firm's operations through debt, equity, or other financial instruments.

Question 18

If Companies Current assets are valued at Rs. 4,50,000 and current liabilies are valued at Rs. 3,00,000 then, What is the current ratio of the company ?

Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. Here, it is Rs. 4,50,000 / Rs. 3,00,000 = 1.5. Therefore, the current ratio is 1.5 : 1.

Question 19

Debtors turtnover ratio of Company 'A' is 30 days. Company 'B' from same industry has Debtor turnover ratio as 45 days. What does this indicate?

Accepted Answer

The debtor turnover ratio indicates how quickly a company collects payments from its debtors. A lower ratio (30 days for Company A vs. 45 days for Company B) suggests that Company A is more efficient at collecting its receivables than Company B, implying better debtor recovery for Company A.

Question 20

If current liabilities of a company is Rs. 1,00,000 and working capital is Rs.2,50,000; What would be the amount of current assets of the company ?

Accepted Answer

Working capital is calculated as Current Assets minus Current Liabilities. Given the working capital is Rs. 2,50,000 and current liabilities are Rs. 1,00,000, the current assets would be Rs. 3,50,000 (2,50,000 + 1,00,000).

Quiz 1: Finance and Accounting