MCQs for Auditor Jobs

By: Prof. Dr. Fazal Rehman | Last updated: May 21, 2025

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1. : Profitability varies inversely with:





2. : In financial planning, the higher most option price will lead to:





3. : The principal advantage of high debt financing is:





4. : Developing a long-term financial plan allows the firm to:





5. : The most common cause(s) of financial problems are:





6. : The steps in financial planning are:





7. : Insurance companies would tend to invest in securities:





8. : Liquidity has:





9. : Long-term financing plans with low liquidity have:





10. : Concerning long-term financial planning models, which of the following statements is generally not correct?





11. : Which forecast gives management some sense of the profit potential possible of different strategic plans?





12. : What is it called when management projects revenue expectations and allocates resources accordingly?





13. : A budget is the plan of the various costs and expenses needed to operate the business, based on the short-term forecast:





14. : Debt capital refers to:





15. : The most widely used source of short-term funding is:





16. : A loan backed by collateral is called a:





17. : Which of the following is a short-term source of funds?





18. : A short-term corporate equivalent of an IOU that is sold in the marketplace by a firm is called:





19. : A bond backed by the company’s real assets is called a:





20. : A firm’s profit that is distributed to shareholders is called:





21. : What is the type of stock that gives owners preference over common shareholders in dividends and asset claims upon liquidation?





22. : The theory says that investors must be paid a premium to hold long-term securities:





23. : Working capital management involves the financing and management of the firm:





24. : An asset sold at the end of a specified time period is called an asset:





25. : Fixed assets are usually financed with funds:





26. : Is usually used to finance self-liquidating assets:





27. : Short-term interest rates, in a normal economy, are generally than long-term rates:





28. : The expectations hypothesis says that interest rates are a function of assets of interest rates:





29. : A key element in financial planning models is:





30. : Planning for future growth is called:





31. : Which one of the following is not a tool of financial forecasting?





32. : The first step in developing a proforma income statement is to:





33. : Proforma statements are statements:





34. : Financial managers use the plan for monthly financing needs





35. : The payments that a firm collects from its customers are called:





36. : Examples of cash disbursements are all but:





37. : Sheet, we get common stock from:





38. : The percent of sales method of financial forecasting shows us the relationship between financing needs and:





39. : Which of the following are microeconomic variables that help define and explain the discipline of finance?





40. : The money markets deal with:





41. : The ability of a firm to convert an asset to cash is called:





42. : Early in the history of finance, an important issue was:





43. : The appropriate firm goal in a capitalist society is:





44. : The agency problem will occur in a business firm if the goals of shareholders do not agree:





45. : Source of funds is a:





46. : Short-term financing for a business firm includes:





47. : Finance is vital for which of the following business activities?





48. : The most important item that can be extracted from financial statements is the actual of the firm:





49. : Which of the following ratios is not from the set of asset management ratios?





50. : Which of the following statements is true regarding debt?





51. : Also, spontaneous financing is known as:





52. : In financial statement analysis, shareholders’ focus will be on the:





53. : Which of the following is the cheapest source of financing available to a firm?





54. : Refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure:





55. : Cash management involves all of the following except:





56. : Financial policy is evaluated by which of the following?





57. : Which of the following holds true regarding aggressive working capital policy?





58. : “Shareholder wealth” in a firm is represented by:





59. : The long-run objective of financial management is to:





60. : What is the EPS for a company with Rs. 100,000 in after-tax profits, 200,000 common shares outstanding, and Rs. 1.2 million in year-end retained earnings?





61. : The market price of a share of common stock is determined by:





62. : The key point of financial management in a firm is:





63. : Composition of its long-term fund and its capital structure refers to:





64. : _____ is the price at which the bond is traded in the stock exchange:





65. : _____ enhance the market value of shares and therefore equity capital is not free of cost:





66. : In _____ approach, the capital structure decision is relevant to the valuation of the firm:





67. : When _____ is greater than zero the project should be accepted:





68. : _____ is defined as the length of time required to recover the initial cash outlay:





69. : _____ refers to a firm holding some cash to meet its routine expenses that are incurred in the ordinary course of business:





70. : _____ refers to the length of time allowed by a firm for its customers to make payment for their purchases:





71. : Amounts due from customers when goods are sold on credit are called:





72. : _____ and _____ are the two versions of goals of the financial management of the firm:





73. : _____ and _____ carry a fixed rate of interest and are to be paid off irrespective of the firm’s revenues:





74. : Credit policy of every company is largely influenced by _____ and _____





75. : What type of decision is needed for XYZ, an oil-based business with inadequate working capital and facing bankruptcy, to prevent this risk?





76. : How are earnings per share calculated?





77. : A profitability index of 85 for a project means that:





78. : Which of the following statements is correct?





79. : Based on risk and return, you would say that Project A is preferred over Project B because it has lower dispersion and a higher expected net present value by Rs. 1,000.





80. : To decrease a given present value, the discount rate should be adjusted:





81. : Process of evaluating financing and investing options available to a firm is:





82. : Which of the following would be consistent with a more aggressive approach to financing working capital?





83. : Which asset-liability combination would most likely result in the firm’s having the greatest risk of technical insolvency?





84. : In deciding the appropriate level of current assets for the firm, management is confronted with:





85. : In finance “working capital” means the same thing as:





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