Business and Finance MCQs Test 05 Preparation Online

1. A schedule of balances drawn from the ledger is called:

A. A statement of account

B. A trial balance

C. A profit and loss account

D. A balance sheet

2. Finance is concerned with:

A. Recording utilization of funds

B. Arrangement of funds

C. All of the above

D. Identification of sources of funds

3. Under-capitalization refers to a situation where:

A. The capital base does not justify the amount of earnings made and needs to be enhanced

B. The earnings ratio of the company equals the industry's earnings ratio

C. The capital base is larger for the earnings made

D. The capital base justifies the earnings made

4. Break-even-point is a situation where:

A. Profits-Costs

B. Business is at the point of dissolution

C. Profits are negative

D. There is no profit no loss

5. The relationship between EBIT and EPS gives:

A. Financial leverage

B. Normal leverage

C. Operating leverage

D. Composite leverage

6. In the pay back period method of capital budgeting, investment is divided by:

A. Constant annual cash flow

B. Cumulative cash flow

C. Annual profits

D. Return on investment

7. Current Ratio is the ratio of:

A. Current assets to current liabilities

B. Fixed assets to total liabilities

C. Current liabilities to current assets

D. Current assets to total liabilities

8. Debt Equity Ratio refers to the ratio of:

A. Total debt to equity share capital

B. Debtors to equity share capital

C. Long term debt to shareholders' equity

D. Long term debt to equity share capital

9. Cost of goods sold refers to:

A. None of the above

B. Cost of materials, labour and overheads

C. Sales minus profits

D. Sales minus gross profits

10. Trading on equity' means:

A. Trading in equity share capital

B. Use of equity share capital for trade financing

C. Use of fixed-interest borrowed funds for getting a higher return on equity

D. Having no borrowed funds

Business and Finance MCQs Test 05 Preparation Online

Leave a Reply Cancel reply