Business Finance MCQs

By: Prof. Dr. Fazal Rehman | Last updated: May 29, 2025

1. In which type of business do all owners share in gains and losses and all have unlimited liability for all business debts?
(A) Sole proprietorship
(B) General Partnership
(C) Limited Partnership
(D) Corporation

2. Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods?
(A) Ordinary annuity
(B) Annuity due
(C) Perpetuity
(D) A and C

3. Is concerned with the acquisition, financing, and management of assets with some overall goal in mind.
(A) Financial management
(B) Profit maximization
(C) Agency theory
(D) Social responsibility

4. Annual cash dividends divided by annual earnings or alternatively dividends per share divided by earnings per share is termed as?
(A) Earning per share ratio
(B) Proposed dividend ratio
(C) Dividend payout ratio
(D) Expected dividend ratio

5. An individual authorized by another person, called the principal, to act on the latter’s behalf is known as?
(A) Agent
(B) Servant
(C) Subordinate
(D) Assistant

6. Quick Ratio is also known as?
(A) Current Ratio
(B) Acid-test Ratio
(C) Cash Ratio
(D) None of the given options

7. Which of the following item provides the important function of shielding part of income from taxes?
(A) Inventory
(B) Supplies
(C) Machinery
(D) Depreciation

8. The process of determining the present value of a payment or a stream of payments that is to be received in the future is?
(A) Discounting
(B) Compounding
(C) Factorization
(D) Accounting

9. In which form of business do owners have limited liability?
(A) Sole Proprietorship
(B) Partnership
(C) Joint Stock Company
(D) Entrepreneurs

10. All the constituencies with a stake in the fortunes of the company are termed as?
(A) Stakeholders
(B) Directors
(C) Chief executives
(D) Subordinates

11. Corporate governance encompasses the relationship among a company’s?
(A) Shareholders and board of directors
(B) Board of directors and senior management
(C) Shareholders and senior management
(D) Shareholders, the board of directors, and senior management