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Which of the following is not a part of owners’ funds?

(a) Reserves and surplus (b) Preference shares (c) Debentures (d) Equity shares Answer (c) Debentures Explanation: Debentures are a debt... View Article

Which of the following is not important to financial planning?

(a) It helps in coordinating various business functions. (b) It helps to reduce waste, duplication of efforts, and gaps in planning. (c) It... View Article

Arrange the following steps involved in the process of financial planning in the correct sequence.

(a) Preparation of a sales forecast, Estimation of expected profit, Preparation of financial statements (b) Preparation of a sales forecast,... View Article

The short-term financial plans are known as ______.

(a) Programs (b) Budgets (c) Policies (d) Objectives Answer (b) Budgets Explanation: A business budget is a spending plan for a business... View Article

The financial plans are drawn by taking into consideration _____.

(a) Performance of the organisation (b) Investments (c) Growth prospects (d) All of the above Answer (d) All of the above Explanation:... View Article

Which of the following is not an objective of financial planning?

(a) Ensuring smooth business operations. (b) Ensuring excess availability of funds at the right time. (c) All of the above. (d) Ensuring... View Article

A company must adhere to the provisions of the Companies Act while taking the dividend decision. Identify the related factor of the dividend decision being mentioned in the above line.

(a) Access to capital market (b) Legal constraints (c) Preferences of shareholders (d) Contractual constraints Answer (b) Legal constraints... View Article

Name the process that enables the management to foresee the fund requirements, both the quantum as well as the timing.

(a) Capital budgeting decisions (b) Dividend decision (c) Financial management (d) Financial planning Answer (d) Financial planning... View Article

It is essentially the preparation of a financial blueprint of an organisation’s future operations. Identify the related concept.

(a) Capital budgeting decisions (b) Financial planning (c) Dividend decision (d) Financial management Answer (b) Financial planning... View Article

A company is likely to declare higher dividends if _______.

(a) Tax rate has no effect on dividend declaration. (b) Tax rates are relatively lower. (c) None of the above. (d) Tax rates are high.... View Article

Under which of the following circumstances is a company not likely to declare a higher dividend?

(a) When the cash flow position of the company is strong. (b) When a company has a lucrative forthcoming business opportunity. (c) None of the... View Article

Name the financial decision which relates to the disposal of profits.

(a) Financing decision (b) Capital budgeting decision (c) Dividend decision (d) Investment decision Answer (c) Dividend decision... View Article

When the stock market is bearish, a company may depend upon ______ in order to raise the required funds.

(a) Debentures (b) Preference shares (c) All of the above (d) Equity shares Answer (a) Debentures Explanation: Debentures are a debt... View Article

When the stock market index is rising, a company may issue _____ in order to meet its financial requirements.

(a) Bonds (b) None of the above (c) Equity shares (d) Debentures Answer (c) Equity shares Explanation: Equity shares are long-term financing... View Article

Which of the following sources of capital should not be selected by a business if its fixed cost is high?

(a) Preference shares (b) All of the above (c) Debentures (d) Equity shares Answer (c) Debentures Explanation: Debentures are a debt... View Article

The _____ decision determines the overall cost of capital and the financial risk of the enterprise.

(a) Capital budgeting decision (b) Investment decision (c) Dividend decision (d) Financing decision Answer (d) Financing decision... View Article

The overall financial risk depends upon the ____.

(a) Proportion of debt in the total capital (b) Both of the above (c) None of the above (d) Proportion of equity in the total capital Answer... View Article

The inability of a business to meet its fixed financial obligations, like payment of interest, is known as _____.

(a) Long-term risk (b) Market risk (c) Long-term risk (d) Business risk Answer (b) Financial risk Explanation: Financial risk is the chance... View Article

This decision is about the quantum of finance to be raised from various long-term sources.

(a) Dividend decision (b) Capital budgeting decision (c) Dividend decision (d) Investment decision Answer (b) Financing decision... View Article

These decisions affect the liquidity as well as the profitability of a business.

(a) Financing decision (b) Dividend decision (c) Working capital decision (d) Capital budgeting decision Answer (c) Working capital decision... View Article

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