MCQs on Financial Management

Financial Management is a study of planning, designing, directing and managing the economic activities such as the utilization of capital and acquisition of the firm. To put it in other words, it is applying general management standards to the financial resources of the firm.

It applies management ethics to the financial resources of a company. This practice controls all the economic operations of an enterprise like utilization of funds, procurement of funds, payment, accounting, risk assessment and everything related to its cash.

Given below are essential MCQs on Financial Management to analyze your understanding of the topic. The answers are also given for your reference.

Financial Management MCQs

Q1. Investment can be defined as

A) Person’s dedication to purchasing a house or flat

B) Use of capital on assets to receive returns

C) Usage of money on a production process of products and services

D) Net additions made to the nation’s capital stocks

Answer: B

Q2. The concept of Financial management is

A) Profit maximization

B) All features of obtaining and using financial resources for company operations

C) Organization of funds

D) Effective Management of every company

Answer: B

Q3. What is the primary goal of financial management?

A) To minimise the risk

B) To maximise the owner’s wealth

C) To maximise the return

D) To raise profit

Answer: B

Q4. GST is a consumption of goods and service tax based on.

A) Development

B) Dividend

C) Duration

D) Destination

Answer: D

Q5. The finance manager is accountable for.

A) Earning capital assets of the company

B) Effective management of a fund

C) Arrangement of financial resources

D) Proper utilisation of funds

Answer: C

Q6. The market value of the shares is decided by

A) The investment market

B) The government

C) Shareholders

D) The respective companies

Answer: A

Q7. The capital budget is associated with.

A) Long terms and short terms assets

B) Fixed assets

C) Long terms assets

D) Short term assets

Answer: C

Q8. CAPM stands for.

A) Capital asset pricing model.

B) Capital amount printing model.

C) Capital amount pricing model.

D) Capital asset printing model.

Answer: A

Q9. What does financial leverage measure?

A) No change with EBIT and EPS

B) The sensibility of EBIT with % change with respect to output

C) The sensibility of EPS w.r.t % change in the EBIT level

D) % variation in the level of production

Answer: C

Q10. From the below-mentioned items which are financial assets?

A) Machines

B) Bonds

C) Stocks

D) B and C

Answer: D

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