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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