Strategic Finance

Multiple Choice Multiple Answer
Question
Due to diversification employees seek:-
Correct Answer
Higher compensation , Job security , Better opportunities within the firm
Your Answer
Higher compensation , Job security , Better opportunities within the firm

Select The Blank
Question
A geographical segment cannot be ________.
Correct Answer
Countries in different zones
Your Answer
A single country

Select The Blank
Question
A shareholder expects a higher rate of return as a firm's compensation for ________.
Correct Answer
Increased risk
Your Answer
Increased risk

Multiple Choice Single Answer
Question
Most companies focus only on :-
Correct Answer
Return on investment
Your Answer
Return on investment

Multiple Choice Multiple Answer
Question
As a general rule, an asset is :-
Correct Answer
A good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenses
Your Answer
A good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenses

Multiple Choice Multiple Answer
Question
In the disclosures in financial statements, there are significant restrictions on :-
Correct Answer
The right of ownership , Realisability of investments , The remittance of income & proceeds of disposal
Your Answer
The right of ownership , The remittance of income & proceeds of disposal , Other disclosures

Multiple Choice Single Answer
Question
Equity includes :-
Correct Answer
Development Rebate Reserve
Your Answer
Deferred Payment Liabilities

Match The Following
Question
Correct Answer
Your Answer
Free cash flow theory
Enormous conflicts of interest between Stakeholders and shareholders
Enormous conflicts of interest between Stakeholders and shareholders
Net income approach
Cost of debt & equity do not change with a change in leverage ratio
Cost of debt & equity do not change with a change in leverage ratio
Net operating income approach
The overall capitalization rate remains constant for all levels of financial leverages
The overall capitalization rate remains constant for all levels of financial leverages
Modigliani - Miller Theory
weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure
weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure

True/False
Question
Organisational changes are similar to mission changes.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
Which of the following is NOT A Characteristic of declining firm :-
Correct Answer
The optimum payout ratio for a declining firm is not 100 %
Your Answer
The firm should not reinvest any profits

Select The Blank
Question
A company shall buyback its shares through the stock exchange by making a public announcement at least ________ days prior to the commencement of buyback.
Correct Answer
Seven
Your Answer
Fourteen

True/False
Question
Money becomes less valuable when received at a latter stage instead of in present time.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The resource theory considers that the competitive position of a firm depends on its ________ Assets.
Correct Answer
Specific
Your Answer
Intangible

Multiple Choice Multiple Answer
Question
A firm having aggressive policy of investing in current assets will show the following features :-
Correct Answer
Frequent production stoppages , High ROI
Your Answer
Frequent production stoppages , High ROI , Timely deliveries to customer

True/False
Question
Making decision on dividend is a very crucial area of financial management for a firm.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
Segment reporting comes under :-
Correct Answer
AS 17
Your Answer
AS 17

True/False
Question
Usually cost data is perfect for ABC Analysis & distribution.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
As per Pecking order theory, which is the costliest means of funding :-
Correct Answer
Equity Shares
Your Answer
Equity Shares

Match The Following
Question
Correct Answer
Your Answer
Mechanisms
Performs or provides energy to an activity
Performs or provides energy to an activity
Inputs
Information or material used to produce the output of an activity
Information or material used to produce the output of an activity
Controls
Information or material that constrains an activity
Information or material that constrains an activity
Outputs
Information or material produced by an activity
Information or material produced by an activity

True/False
Question
According to NOI Approach, any capital structure is optimum.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The ________ often gives the best insight into the borrower's short term credit needs.
Correct Answer
Cash budget
Your Answer
Market research

Select The Blank
Question
If firms have same technology ________ makes the difference i.e. firms become more productive .
Correct Answer
Solid human resource team
Your Answer
Latest & updated techniques

True/False
Question
Explicit cost and implicit cost are the two parts of cost of debt.
Correct Answer
True
Your Answer
True

Select The Blank
Question
If a segment is not designated as a ________ it should be included as an unallocated reconciling item.
Correct Answer
Reportable segment
Your Answer
Business segment

Multiple Choice Single Answer
Question
Research into true human resources accounting began in :-
Correct Answer
1960`s
Your Answer
1960`s

Select The Blank
Question
Increase in cost of capital means decrease in ________.
Correct Answer
Profitability
Your Answer
Expected returns

True/False
Question
According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value.
Correct Answer
False
Your Answer
True

Multiple Choice Multiple Answer
Question
Accrued expenses represent :-
Correct Answer
Costless financing , An interest free source of financing
Your Answer
Costless financing , An interest free source of financing

Multiple Choice Multiple Answer
Question
The direct costs tier normally only includes the following :-
Correct Answer
The personnel payroll , Supplies , Individual rental equipment
Your Answer
The personnel payroll , Supplies , Individual rental equipment

Multiple Choice Single Answer
Question
Fixed price tender offers are accompanied by an abnormal announcement period return of :-
Correct Answer
8 - 10 %
Your Answer
6 - 8 %

Multiple Choice Single Answer
Question
Many companies claim their main assets are their :-
Correct Answer
People
Your Answer
Land

Multiple Choice Multiple Answer
Question
The main assumptions for stock repurchase models are as follows :-
Correct Answer
The market is efficient , There is perfect competition in the securities market
Your Answer
The market is efficient , There is perfect competition in the securities market , Investors are not very keen to maximize the value of their investment

Multiple Choice Single Answer
Question
The Buy back of shares shall not be made from
Correct Answer
The promoters or persons in control of the company
Your Answer
The promoters or persons in control of the company

True/False
Question
Opportunity costs and real costs decrease the market value of a firm.
Correct Answer
True
Your Answer
False

True/False
Question
Retained earnings are the most important internal sources of financing the growth of the firm.
Correct Answer
True
Your Answer
True

True/False
Question
The chance of bankruptcy is small when the leverage of a firm is small.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
Examples of accounting methods used by firm are :-
Correct Answer
FIFO , LIFO , Accrual Accounting
Your Answer
FIFO , LIFO , Overhead calculations

Multiple Choice Single Answer
Question
For the following process the valuation is needed to decide the price at which the deal will be possibly concluded :-
Correct Answer
Mergers & Acquisitions
Your Answer
Computation of wealth tax & gift tax

True/False
Question
Diversification helps in preserving a firm's reputation & goodwill.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
According to Net Income Approach, the average cost of capital declines as the leverage ratio :-
Correct Answer
Increases
Your Answer
Increases

True/False
Question
Whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than its form.
Correct Answer
False
Your Answer
True

Select The Blank
Question
Forfeiting is mostly used for ________.
Correct Answer
Big ticket items & durable goods
Your Answer
Big ticket items & durable goods

Multiple Choice Multiple Answer
Question
The financial framework of a merger decision covers 3 interrelated aspects i.e. :-
Correct Answer
Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision
Your Answer
Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision

True/False
Question
For determining exchange ratio, the model developed by Conn & Nielson is used.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
One of the important assumptions for capital structure theories is :-
Correct Answer
Debt and equity are the 2 kinds of funds used by the firm
Your Answer
Debt and equity are the 2 kinds of funds used by the firm

Select The Blank
Question
________ are not diversible.
Correct Answer
Market related risks
Your Answer
Market related risks

Multiple Choice Multiple Answer
Question
The financial managers of a company consume a great deal of their time in activities like :-
Correct Answer
Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables
Your Answer
Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables

Multiple Choice Multiple Answer
Question
The different types of floats are :-
Correct Answer
Postal float , Deposit float , Bank float
Your Answer
Postal float , Deposit float , Bank float

Multiple Choice Single Answer
Question
A low payout policy implies :-
Correct Answer
More retention of profits
Your Answer
More retention of profits

True/False
Question
optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.
Correct Answer
False
Your Answer
True

Multiple Choice Single Answer
Question
Companies often need to value its own :-
Correct Answer
Shares
Your Answer
Liabilities

Select The Blank
Question
Postage is an example of ________ cost.
Correct Answer
Non traceable cost
Your Answer
Non traceable cost

Multiple Choice Single Answer
Question
Value added analysis :-
Correct Answer
Helps to identify potential activities that may be omitted immediately
Your Answer
Helps to identify potential activities that may be omitted immediately

Multiple Choice Multiple Answer
Question
Intangible assets include :-
Correct Answer
Preliminary expenses , Deferred revenue expenditure , Discount on issues of shares / debenture etc
Your Answer
Preliminary expenses , Deferred revenue expenditure , Discount on issues of shares / debenture etc

Multiple Choice Single Answer
Question
The Management of the Company may enter into a negotiated purchase, which is referred to as :-
Correct Answer
Greenfield
Your Answer
Forward Contracts

Multiple Choice Single Answer
Question
If the segment result of a segment includes interest expense its segment liabilities include :-
Correct Answer
The related interest bearing liabilities
Your Answer
The related interest bearing liabilities

Select The Blank
Question
As per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage.
Correct Answer
Constant
Your Answer
Constant

Match The Following
Question
Correct Answer
Your Answer
Exit cost
Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.
Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.
Historical costs
Sacrifice necessary to hire & train people
Sacrifice necessary to hire & train people
Substitution cost
Exit costs of the leaving employee & recruiting & training of the replacement
Exit costs of the leaving employee & recruiting & training of the replacement
Opportunity cost
An asset value when they are the target of an alternative use.
An asset value when they are the target of an alternative use.

Multiple Choice Single Answer
Question
Suppliers of equity are interested in :-
Correct Answer
High share prices
Your Answer
High share prices

Multiple Choice Multiple Answer
Question
The 3 groups of participants in a firm are :-
Correct Answer
Suppliers of equity , Debt suppliers , Firm Managers
Your Answer
Suppliers of equity , Debt suppliers , Firm Managers

True/False
Question
It is possible to place a single value for the acquired firm.
Correct Answer
False
Your Answer
True

Select The Blank
Question
________ is never a part of the output.
Correct Answer
Mechanisms
Your Answer
Mechanisms

Multiple Choice Multiple Answer
Question
Exit costs are classified into 3 categories namely :-
Correct Answer
Lost efficiency prior to separation , Job vacancy cost during the new search , Termination pay
Your Answer
Recruiting new employee as a replacement of the left employee , Lost efficiency prior to separation , Termination pay

True/False
Question
A transport corporation has a substantial working capital requirement.
Correct Answer
False
Your Answer
True

Select The Blank
Question
________ know the best about a firm's performance.
Correct Answer
Firm Managers
Your Answer
Business analysts

Multiple Choice Multiple Answer
Question
As per AS 13 Statement, the following are not considered as investments:-
Correct Answer
Shares , Debentures , Other securities held as stock in trade
Your Answer
Shares , Debentures , Other securities held as stock in trade

Multiple Choice Multiple Answer
Question
The employer in offering the job contract assumes a range of legal obligations such as :-
Correct Answer
Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments
Your Answer
Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments

True/False
Question
It is essential that ABC must fit into the strategy of the company.
Correct Answer
True
Your Answer
False

True/False
Question
Trade credit creates book debts which the firm is expected to collect in the near future.
Correct Answer
True
Your Answer
True

Select The Blank
Question
At times managers invest in projects that improve the company's ________.
Correct Answer
Prestige or power
Your Answer
Prestige or power

Select The Blank
Question
Business risk & financial risk do not have any influence on ________.
Correct Answer
Accounting numbers
Your Answer
Banks

True/False
Question
The objective of a dividend policy should be to maximize shareholder's return so that the value of his investment is maximized.
Correct Answer
False
Your Answer
True

True/False
Question
A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly.
Correct Answer
True
Your Answer
True

Select The Blank
Question
________ is not a characteristic of financial conglomerates.
Correct Answer
Provide ineffective competitive process
Your Answer
Provide ineffective competitive process

Select The Blank
Question
There is a ________ relationship between the number of employees & the use of operating supplies.
Correct Answer
Natural
Your Answer
Natural

Multiple Choice Single Answer
Question
If a firm opts for restrictive policy then the investments in current assets is :-
Correct Answer
Low
Your Answer
Low

Match The Following
Question
Correct Answer
Your Answer
AS 17
Segment reporting
Segment reporting
AS 19
Leases
Leases
AS 6
Depreciation accounting
Depreciation accounting
AS 10
Accounting for fixed assets
Revenue recognition

True/False
Question
To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes.
Correct Answer
True
Your Answer
True

Select The Blank
Question
Investors can reduce the company related risk by diversification of their investments in ________.
Correct Answer
Shares of a large number of companies
Your Answer
Fixed deposits of a company

Multiple Choice Multiple Answer
Question
For ABC Analysis the available cost data :-
Correct Answer
Has to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combined with different types of data from alternate sources
Your Answer
Has to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combined with different types of data from alternate sources

Multiple Choice Multiple Answer
Question
The external staffing performance indicators include :-
Correct Answer
Compensation per Re. Profit , Personnel services head count , Profit per head
Your Answer
Compensation per Re. Profit , Personnel services head count , Profit per head

Select The Blank
Question
HLL the largest FMCG company has a turnover of Rs. ________.
Correct Answer
118 Bn
Your Answer
118 Bn

Select The Blank
Question
Segment expense includes ________.
Correct Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment
Your Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment

Multiple Choice Multiple Answer
Question
The important aspect of dividend policy is :-
Correct Answer
To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm
Your Answer
To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm , To dispatch the dividend warrants in time

Select The Blank
Question
In today's fast moving world, the quickest way to get information on a firm is through ________.
Correct Answer
Internet
Your Answer
Internet

Multiple Choice Multiple Answer
Question
The main characteristics of operating economies are :-
Correct Answer
It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions
Your Answer
It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions

Multiple Choice Single Answer
Question
Segment liabilities do not include :-
Correct Answer
Borrowings & other liabilities that are incurred for financing rather than operating purpose
Your Answer
Borrowings & other liabilities that are incurred for financing rather than operating purpose

Multiple Choice Single Answer
Question
Which of the following company is reaping high market valuation due to showing human resources as an asset in its balance sheet information?
Correct Answer
Infosys
Your Answer
Infosys

True/False
Question
In market value approach, interested parties never manipulate the stock markets.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
The stock value for a company will be considered to be fair value for ordinary transactions if the shares are :-
Correct Answer
Listed
Your Answer
Listed

True/False
Question
Planning helps an acquiring firm to identify the units it should drop & it should add.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
For paying dividends, firms will have a given amount of :-
Correct Answer
Cash available
Your Answer
Cash available

Multiple Choice Single Answer
Question
The depreciation rates or the useful lives of the assets are disclosed only :-
Correct Answer
If they are different from the principle rates specified in the statute
Your Answer
If specifically asked by the Chartered accountant of the company

Select The Blank
Question
Earning power of the company approach tries to value the ________.
Correct Answer
Current value of the assets
Your Answer
Current value of the assets

Multiple Choice Single Answer
Question
One of the selective developments that has taken place in recent times is companies are going in for :-
Correct Answer
Activity based costing and management
Your Answer
Activity based costing and management

True/False
Question
Diversification helps in preserving a firm's reputation & goodwill.
Correct Answer
True
Your Answer
True

True/False
Question
Cash dividends are taxable at ordinary tax rates.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
The 3 groups of participants in a firm are :-
Correct Answer
Suppliers of equity , Debt suppliers , Firm Managers
Your Answer
Suppliers of equity , Debt suppliers , Firm Managers

Multiple Choice Multiple Answer
Question
As per AS 13 Statement, the following are not considered as investments:-
Correct Answer
Shares , Debentures , Other securities held as stock in trade
Your Answer
Shares , Debentures , Other securities held as stock in trade

Match The Following
Question
Correct Answer
Your Answer
Opportunity cost
An asset value when they are the target of an alternative use.
An asset value when they are the target of an alternative use.
Exit cost
Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.
Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.
Historical costs
Sacrifice necessary to hire & train people
Sacrifice necessary to hire & train people
Substitution cost
Exit costs of the leaving employee & recruiting & training of the replacement
Exit costs of the leaving employee & recruiting & training of the replacement

Multiple Choice Multiple Answer
Question
The acquiring firm for any M & A will require data about the target firm which will include :-
Correct Answer
Quality of management , Production capabilities , Profitability
Your Answer
Quality of management , Production capabilities , Profitability

Multiple Choice Single Answer
Question
Equity includes :-
Correct Answer
Development Rebate Reserve
Your Answer
Development Rebate Reserve

Match The Following
Question
Correct Answer
Your Answer
Free cash flow theory
Enormous conflicts of interest between Stakeholders and shareholders
Enormous conflicts of interest between Stakeholders and shareholders
Net income approach
Cost of debt & equity do not change with a change in leverage ratio
Cost of debt & equity do not change with a change in leverage ratio
Net operating income approach
The overall capitalization rate remains constant for all levels of financial leverages
The overall capitalization rate remains constant for all levels of financial leverages
Modigliani - Miller Theory
weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure
weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure

Select The Blank
Question
If a segment is not designated as a ________ it should be included as an unallocated reconciling item.
Correct Answer
Reportable segment
Your Answer
Reportable segment

True/False
Question
For determining exchange ratio, the model developed by Conn & Nielson is used.
Correct Answer
True
Your Answer
True

Select The Blank
Question
In presenting the reconciliation segment result should be reconciled to ________.
Correct Answer
Enterprise net profit or loss
Your Answer
Enterprise net profit or loss

Select The Blank
Question
Identify disclosure on human resources as a societal concern & prepare international regulations comes under ________
Correct Answer
The compulsory method
Your Answer
The compulsory method

Multiple Choice Single Answer
Question
Which is an example out of the following to which special consideration apply for depreciation :-
Correct Answer
Regenerative natural resources
Your Answer
Regenerative natural resources

True/False
Question
It is essential that ABC must fit into the strategy of the company.
Correct Answer
True
Your Answer
True

Select The Blank
Question
HLL the largest FMCG company has a turnover of Rs. ________.
Correct Answer
118 Bn
Your Answer
118 Bn

Select The Blank
Question
There is a ________ relationship between the number of employees & the use of operating supplies.
Correct Answer
Natural
Your Answer
Natural

Multiple Choice Multiple Answer
Question
The important aspect of dividend policy is :-
Correct Answer
To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm
Your Answer
To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm

Multiple Choice Multiple Answer
Question
The main characteristics of CAPM are :-
Correct Answer
It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium)
Your Answer
It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium)

True/False
Question
Current accounting system is able to provide actual value of employee capabilities & knowledge.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
In respect of depreciable assets, which do not have material value, depreciation is often allocated :-
Correct Answer
Fully in the accounting period for which they are acquired
Your Answer
Fully in the accounting period for which they are acquired

Multiple Choice Single Answer
Question
The depreciation rates or the useful lives of the assets are disclosed only :-
Correct Answer
If they are different from the principle rates specified in the statute
Your Answer
If they are different from the principle rates specified in the statute

Multiple Choice Multiple Answer
Question
Due to diversification employees seek:-
Correct Answer
Job security , Better opportunities within the firm , Higher compensation
Your Answer
Job security , Better opportunities within the firm , Higher compensation

Select The Blank
Question
The ________ cost tier has the advantage of being the simplest to calculate and justify.
Correct Answer
Direct
Your Answer
Direct

Multiple Choice Multiple Answer
Question
To gather costs means to do the following actions to support the costing of the activities :-
Correct Answer
To capture , To construct , To synthesize the correct cost figures
Your Answer
To capture , To construct , To synthesize the correct cost figures

True/False
Question
Odd lots purchase is not a method of buy back of shares.
Correct Answer
False
Your Answer
False

Multiple Choice Multiple Answer
Question
The overhead expenses include :-
Correct Answer
Utilities , Maintenance , Security
Your Answer
Utilities , Maintenance , Security

Multiple Choice Single Answer
Question
In a matching approach policy, :-
Correct Answer
There is a small risk if shortage of funds
Your Answer
There is a small risk if shortage of funds

Multiple Choice Single Answer
Question
The most important internal sources of financing the growth of the firm is through :-
Correct Answer
Retained earnings
Your Answer
Retained earnings

True/False
Question
The intellectual assets of a company are often worth 3 or 4 times the tangible book value.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
Indicators of the value of an investment are obtained by :-
Correct Answer
Reference to its market value , The investee`s assets , The expected cash flows from the investment
Your Answer
Reference to its market value , The investee`s assets , The expected cash flows from the investment

Select The Blank
Question
Buy back through book building the process should be made through ________.
Correct Answer
An electronically linked transparent facility
Your Answer
An electronically linked transparent facility

Multiple Choice Multiple Answer
Question
Significant influence is the power to :-
Correct Answer
Participate in the operating policy decisions , Participate in the financial decisions
Your Answer
Participate in the financial decisions , Participate in the operating policy decisions

True/False
Question
An activity model is a tool to assist in understanding & defining the organisation.
Correct Answer
True
Your Answer
True

True/False
Question
Decisions related to working capital are repetitive & frequent.
Correct Answer
True
Your Answer
True

Select The Blank
Question
________ is not a characteristic of financial conglomerates.
Correct Answer
Provide ineffective competitive process
Your Answer
Provide ineffective competitive process

Multiple Choice Single Answer
Question
In the past, costing mainly focused on :-
Correct Answer
Manufacturing costs
Your Answer
Manufacturing costs

Multiple Choice Multiple Answer
Question
A firm using a conservative policy for determining the requirements of current assets :-
Correct Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales
Your Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

Multiple Choice Multiple Answer
Question
The major conditions to be fulfilled for buyback of shares as per the legal provisions include :-
Correct Answer
Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1
Your Answer
Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1

Multiple Choice Single Answer
Question
Segment liabilities do not include :-
Correct Answer
Borrowings & other liabilities that are incurred for financing rather than operating purpose
Your Answer
Borrowings & other liabilities that are incurred for financing rather than operating purpose

Multiple Choice Single Answer
Question
The difference between current assets & current liabilities is known as :-
Correct Answer
Net working capital
Your Answer
Net working capital

Multiple Choice Single Answer
Question
The bottom line of ABC Process is :-
Correct Answer
To achieve a better method of doing the right business pf the organisation
Your Answer
To achieve a better method of doing the right business pf the organisation

Select The Blank
Question
Non value added activities helps ________.
Correct Answer
To analyse the activities more carefully
Your Answer
To analyse the activities more carefully

Multiple Choice Single Answer
Question
In value of assets method the following is also to be included as they are also of value to the company :-
Correct Answer
Non trading assets
Your Answer
Non trading assets

Multiple Choice Single Answer
Question
Best practices, a tool for review process is similar to :-
Correct Answer
Bench marking
Your Answer
Bench marking

Select The Blank
Question
HLL is ________ % of subsidiary of Unilever PLC.
Correct Answer
0.516
Your Answer
0.516

Select The Blank
Question
traditionally avails are provided by ________.
Correct Answer
Banks
Your Answer
Banks

Multiple Choice Multiple Answer
Question
The financial framework of a merger decision covers 3 interrelated aspects i.e. :-
Correct Answer
Financing techniques in mergers , Analysis of merger as a capital budgeting decision , Determining the firm's value
Your Answer
Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision

Select The Blank
Question
A company shall buyback its shares through the stock exchange by making a public announcement at least ________ days prior to the commencement of buyback.
Correct Answer
Seven
Your Answer
Seven

True/False
Question
Management of working capital refers to the management of total assets and liabilities of a company.
Correct Answer
False
Your Answer
False

True/False
Question
optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.
Correct Answer
False
Your Answer
False

True/False
Question
Appraisal value of a firm can be acquired from an independent appraisal agency.
Correct Answer
True
Your Answer
True

True/False
Question
Accounting standards (AS - 13) is now mandatory.
Correct Answer
True
Your Answer
True

True/False
Question
The accounting records serve as the major source of cost data.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
To gather costs means to do the following actions to support the costing of the activities :-
Correct Answer
To capture , To construct , To synthesize the correct cost figures
Your Answer
To capture , To construct , To find the cost of existing organisational structure

Select The Blank
Question
If firms have same technology ________ makes the difference i.e. firms become more productive .
Correct Answer
Solid human resource team
Your Answer
Solid human resource team

Select The Blank
Question
In many companies, there is no formal record of________.
Correct Answer
Investment in employees
Your Answer
Investment in employees

True/False
Question
The activity model is normally created by an activity Accountant.
Correct Answer
False
Your Answer
False

True/False
Question
The chance of bankruptcy is small when the leverage of a firm is small.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The total cost of the activity model allocated by the applied activity drivers to the output of the activity model is called________.
Correct Answer
The cost of the output
Your Answer
The cost of the output

Multiple Choice Multiple Answer
Question
A firm using a conservative policy for determining the requirements of current assets :-
Correct Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales
Your Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

Multiple Choice Multiple Answer
Question
The budgetary records are useful for:-
Correct Answer
Validating accounting costs , Providing a rationale for division of costs , Replacing missing data
Your Answer
Validating accounting costs , Providing a rationale for division of costs , Replacing missing data

Multiple Choice Single Answer
Question
When a company has resorted to buyback of its shares it cannot make a further issue of the same kind of securities within a period of how many months?
Correct Answer
6 months
Your Answer
6 months

Multiple Choice Single Answer
Question
The bottom line of ABC Process is :-
Correct Answer
To achieve a better method of doing the right business pf the organisation
Your Answer
To achieve a better method of doing the right business pf the organisation

Select The Blank
Question
The most popular kind of dividend policy is one that pays a ________.
Correct Answer
Regular, steady dividend
Your Answer
Regular, steady dividend

Multiple Choice Multiple Answer
Question
Due to diversification employees seek:-
Correct Answer
Job security , Better opportunities within the firm , Higher compensation
Your Answer
Job security , Better opportunities within the firm , Higher compensation

Match The Following
Question
Correct Answer
Your Answer
Amount involved in buy back
Not to exceed 25 % of the total paid up capital
Not to exceed 25 % of the total paid up capital
Articles of Association
Authorize buy back of securities
Authorize buy back of securities
Board of Directors
Resolution permitting the buy back of shares
Resolution permitting the buy back of shares
Shares to be bought back
Fully paid up
Fully paid up

Multiple Choice Single Answer
Question
A high payout policy means :-
Correct Answer
More current dividends
Your Answer
More current dividends

Match The Following
Question
Correct Answer
Your Answer
Earning per share
Acquisition is considered to be a function of the impact of the merger on the EPS
Acquisition is considered to be a function of the impact of the merger on the EPS
Book value
Divide net worth by the number of equity shares outstanding
Divide net worth by the number of equity shares outstanding
Appraisal value
Provides a list of the reasonableness of results obtained through methods base upon the going concern concept
Provides a list of the reasonableness of results obtained through methods base upon the going concern concept
Market value
Indicate the consensus of the investors
Indicate the consensus of the investors

Select The Blank
Question
In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________
Correct Answer
Replacement cost
Your Answer
Replacement cost

Select The Blank
Question
The advantage of ________ is that the company is not required to wait for the payment by the bill issuer.
Correct Answer
Bill discounting
Your Answer
Bill discounting

Multiple Choice Single Answer
Question
In a growth firm, internal rate is :-
Correct Answer
More than opportunity
Your Answer
equals opportunity

Multiple Choice Multiple Answer
Question
Shortage costs are mainly in the form of :-
Correct Answer
Disruption in production schedule , Loss of sales , Loss of customer goodwill
Your Answer
Disruption in production schedule , Loss of sales , Loss of customer goodwill

Multiple Choice Multiple Answer
Question
Shortcomings of accounting numbers consist of the following :-
Correct Answer
Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers
Your Answer
Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers

Multiple Choice Single Answer
Question
Internal financing means the firm finances all investments through :-
Correct Answer
Retained earnings
Your Answer
Retained earnings

Multiple Choice Single Answer
Question
The earning power of the company approach includes :-
Correct Answer
Mainly discounting of all future earnings
Your Answer
Mainly discounting of all future earnings

Multiple Choice Single Answer
Question
A firm should consider acquisition as a :-
Correct Answer
Capital budget decision
Your Answer
Capital budget decision

Multiple Choice Single Answer
Question
Firms which have marked seasonality in their operations usually have :-
Correct Answer
Highly fluctuating working capital requirement
Your Answer
Highly fluctuating working capital requirement

Multiple Choice Single Answer
Question
Decrease in leverage results in increasing the :-
Correct Answer
Overall cost of capital
Your Answer
Overall cost of capital

Select The Blank
Question
Segment expense includes ________.
Correct Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment
Your Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment

Multiple Choice Single Answer
Question
the amount of working capital required to meet long term, minimum needs is called :-
Correct Answer
Permanent working capital
Your Answer
Permanent working capital

Select The Blank
Question
The costs should be gathered & allocated within the organisation at the ________ structural layer.
Correct Answer
Lowest possible
Your Answer
Lowest possible

Multiple Choice Multiple Answer
Question
The acquiring firm for any M & A will require data about the target firm which will include :-
Correct Answer
Quality of management , Production capabilities , Profitability
Your Answer
Quality of management , Production capabilities , Profitability

Multiple Choice Single Answer
Question
Segment assets are determined after :-
Correct Answer
Deducting related allowances / provisions reported as direct offsets
Your Answer
Deducting related allowances / provisions reported as direct offsets

Multiple Choice Multiple Answer
Question
For M & As, the acquiring firm needs industry data on :-
Correct Answer
Market growth , Nature of competition , Degree of regulation
Your Answer
Market growth , Nature of competition , Degree of regulation

Select The Blank
Question
Implicit & Explicit costs are included in the ________.
Correct Answer
Price of a product
Your Answer
Price of a product

Multiple Choice Multiple Answer
Question
In a merger decision, the value of a firm depends upon:-
Correct Answer
Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm
Your Answer
Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm

True/False
Question
To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes.
Correct Answer
True
Your Answer
True

True/False
Question
Segment result is segment revenue less segment expenses.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
The main factor affecting the profits is :-
Correct Answer
The magnitude of sales of the business
Your Answer
Customer reputation in the market

True/False
Question
Retained earnings are the most important internal sources of financing the growth of the firm.
Correct Answer
True
Your Answer
True

Select The Blank
Question
________ are those operating assets that are employed by a segment in its operating activities.
Correct Answer
Segment assets
Your Answer
Segment assets

Multiple Choice Multiple Answer
Question
The direct costs tier normally only includes the following :-
Correct Answer
The personnel payroll , Supplies , Individual rental equipment
Your Answer
The personnel payroll , Supplies , Individual rental equipment

Multiple Choice Multiple Answer
Question
Accounting numbers are not influenced by :-
Correct Answer
Dividend policy , Time span of money , Financial and business risk
Your Answer
Dividend policy , Time span of money , Financial and business risk

Select The Blank
Question
Total risk reduces if operations of combining firms are ________.
Correct Answer
Negatively correlated
Your Answer
Negatively correlated

Multiple Choice Single Answer
Question
The Public announcement of share buy back has to be made at least :-
Correct Answer
7 Days prior to the commencement of buy back
Your Answer
7 Days prior to the commencement of buy back

Multiple Choice Multiple Answer
Question
It is the activity accountant's job to do the following for the existing organisational structure :-
Correct Answer
To define the costs , To refine the costs , To document the costs
Your Answer
To define the costs , To refine the costs , To document the costs

Multiple Choice Multiple Answer
Question
Operating economies occur due to indivisibilities of resources like :-
Correct Answer
People , Equipment , Overheads
Your Answer
People , Equipment , Overheads

Select The Blank
Question
The amount to be invested by any single investor in a commercial paper shall not be less than Rs. ________.
Correct Answer
25 lacs
Your Answer
25 lacs

True/False
Question
A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
The development aspect of training in firms focus on :-
Correct Answer
Promotion to higher job levels
Your Answer
Promotion to higher job levels

Multiple Choice Multiple Answer
Question
The main assumptions for stock repurchase models are as follows :-
Correct Answer
The market is efficient , There is perfect competition in the securities market
Your Answer
The market is efficient , There is perfect competition in the securities market

Multiple Choice Single Answer
Question
AS 17 is mandatory for all commercial, industrial & business reporting enterprises whose turnover for the accounting period :-
Correct Answer
Exceeds 50 crores
Your Answer
Exceeds 50 crores

Select The Blank
Question
If the segment result of a segment includes interest or dividend income its segment assets will not include ________.
Correct Answer
Payables
Your Answer
Payables

Select The Blank
Question
Economies of scale arises with increase in volume of production leading to________.
Correct Answer
Reduction in the cost of production
Your Answer
Reduction in the cost of production

Multiple Choice Single Answer
Question
When a change in the method of depreciation is made :-
Correct Answer
Depreciation is recalculated in accordance with the new method
Your Answer
Depreciation is recalculated in accordance with the new method

Multiple Choice Multiple Answer
Question
One of the advantages of trade credit is its flexibility i.e. the firm does not :-
Correct Answer
Have to sign a note , Pledge collateral , Adhere to strict payment schedule
Your Answer
Have to sign a note , Pledge collateral , Adhere to strict payment schedule

Select The Blank
Question
Depreciation is ________ of an asset.
Correct Answer
Loss of value
Your Answer
Loss of value

Select The Blank
Question
There is a ________ relationship between the number of employees & the use of operating supplies.
Correct Answer
Natural
Your Answer
Natural

Multiple Choice Single Answer
Question
If a firm opts for restrictive policy then the investments in current assets is :-
Correct Answer
Low
Your Answer
Low

Multiple Choice Single Answer
Question
When the seller asks for the payment before making the delivery in order to avoid all risks it is known as :-
Correct Answer
Cash before delivery
Your Answer
Cash before delivery

True/False
Question
An activity model is a tool to assist in understanding & defining the organisation.
Correct Answer
True
Your Answer
True

True/False
Question
It is possible to place a single value for the acquired firm.
Correct Answer
False
Your Answer
False

Multiple Choice Multiple Answer
Question
In the disclosures in financial statements, there are significant restrictions on :-
Correct Answer
The right of ownership , Realisability of investments , The remittance of income & proceeds of disposal
Your Answer
The right of ownership , Realisability of investments , The remittance of income & proceeds of disposal

Multiple Choice Single Answer
Question
The depreciable assets are assets which are expected to be used :-
Correct Answer
During more than 1 accounting period
Your Answer
During more than 1 accounting period

True/False
Question
Short term financing is meant for funding working capital of a company.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
The existence of significant influence by an investor is usually evidenced in the following ways :-
Correct Answer
Participation in policy making processes , Material transactions between the investor & the investee , Interchange of managerial personnel
Your Answer
Participation in policy making processes , Material transactions between the investor & the investee , Interchange of managerial personnel

Multiple Choice Multiple Answer
Question
The important steps involved in the analysis of mergers & acquisitions are:-
Correct Answer
Planning , Searching & screening , Financial evaluation
Your Answer
Planning , Searching & screening , Financial evaluation

Match The Following
Question
Correct Answer
Your Answer
Unsecured loans
Form of debt not backed by the pledge of specific assets
Form of debt not backed by the pledge of specific assets
Line of credit
Does not constitute any legal commitments on the part of the bank
Does not constitute any legal commitments on the part of the bank
Revolving credit agreements
While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow
While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow
Transaction loan
The cash flow ability of the borrower to pay the loan is usually of paramount importance
The cash flow ability of the borrower to pay the loan is usually of paramount importance

Multiple Choice Multiple Answer
Question
The financial managers of a company consume a great deal of their time in activities like :-
Correct Answer
Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables
Your Answer
Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables

True/False
Question
Dividends increase the current returns for shareholders.
Correct Answer
True
Your Answer
True

True/False
Question
Book value is based on the balance sheet value of owner's equity.
Correct Answer
True
Your Answer
True

Select The Blank
Question
the commercial paper may be issued in the multiples of ________.
Correct Answer
5 lakhs
Your Answer
5 lakhs

Select The Blank
Question
In presenting the reconciliation segment result should be reconciled to ________.
Correct Answer
Enterprise net profit or loss
Your Answer
Enterprise revenue

Select The Blank
Question
Another meaning of bear hug is ________.
Correct Answer
Hostile takeover
Your Answer
Friendly takeover

Multiple Choice Single Answer
Question
Funds borrowed for a period of 1 year or less is called :-
Correct Answer
Short term finance
Your Answer
Short term finance

Multiple Choice Multiple Answer
Question
Financial statements classify the following into separate categories :-
Correct Answer
Fixed assets , Investments , Current assets
Your Answer
Fixed assets , Investments , Current assets

Multiple Choice Single Answer
Question
Any addition or extension to an existing asset which retains a separate identify & is capable of being used after the existing asset is disposed of :-
Correct Answer
Is depreciated independently
Your Answer
Is depreciated independently

Multiple Choice Single Answer
Question
In value of assets approach the value of which of the following should be deducted to calculate the net assets available to the equity shareholders :-
Correct Answer
Outstanding preference shares
Your Answer
Outstanding preference shares

Multiple Choice Single Answer
Question
What is a very important factor in any kind of merger?
Correct Answer
Exchange ratio
Your Answer
Exchange ratio

Multiple Choice Single Answer
Question
When the working capital is less than its peak level :-
Correct Answer
The surplus is invested in liquid assets
Your Answer
The surplus is invested in liquid assets

True/False
Question
Baumul`s Model is similar to EOQ model in inventory management.
Correct Answer
True
Your Answer
True

True/False
Question
Sometimes the mechanisms may appear to be inputs for an activity.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
Accrued expenses represent :-
Correct Answer
Costless financing , An interest free source of financing
Your Answer
Costless financing , An interest free source of financing

True/False
Question
The intellectual assets of a company are often worth 3 or 4 times the tangible book value.
Correct Answer
True
Your Answer
True

Match The Following
Question
Correct Answer
Your Answer
Terminal warehouse receipt
Inventory is stored with a public or terminal warehousing company
Inventory is stored with a public or terminal warehousing company
Floating lien
Loose arrangement as the lender may find it difficult to police
Loose arrangement as the lender may find it difficult to police
Chattel mortgage
Well suited for financial good inventories of capital goods
Well suited for financial good inventories of capital goods
Trust receipt
Specifically identified by serial number or other means
Specifically identified by serial number or other means

Multiple Choice Multiple Answer
Question
The different types of floats are :-
Correct Answer
Postal float , Deposit float , Bank float
Your Answer
Postal float , Deposit float , Bank float

Multiple Choice Multiple Answer
Question
If a company is following multiple accounting system, the activity accountant will have to match data across :-
Correct Answer
Codes , Time periods , Systems
Your Answer
Codes , Time periods , Systems

True/False
Question
AS 13 statement does not deal with operating or finance leases.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The number of bidding centers shall not be less than ________ for buy back through book building.
Correct Answer
30
Your Answer
30

Select The Blank
Question
Market approach is used for companies whose shares are ________ on the Stock market.
Correct Answer
Listed
Your Answer
Listed

Multiple Choice Single Answer
Question A quantity discount is offered :-
Correct Answer On large shipments
Your Answer On large shipments

Multiple Choice Multiple Answer
Question Indicators of the value of an investment are obtained by :-
Correct Answer Reference to its market value , The investee`s assets , The
expected cash flows from the investment
Your Answer The expected cash flows from the investment , Current
investment valuation , The investee`s assets

Multiple Choice Single Answer
Question The following is not a method of payment to the acquired firm:-
Correct Answer Fixed deposits of the acquiring firm
Your Answer Convertible securities
True/False
Question The activity model is normally created by an activity Accountant.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question A company is prohibited to buy back its own shares in the
following circumstances :-
Correct Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon
Your Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon

Select The Blank
Question If the segment result of a segment includes interest or dividend
income its segment assets will not include ________.
Correct Answer Payables
Your Answer Related receivables

Select The Blank
Question Forward or backward integration is a characteristic of ________.
Correct Answer Vertical Mergers
Your Answer Horizontal Mergers

Multiple Choice Single Answer
Question Modigliani - Miller Theoram is based on :-
Correct Answer Perfect Capital Markets
Your Answer Perfect Capital Markets

True/False
Question Value based approach of HRA tracking can be divided into 2
categories - Non - monetary & monetary.
Correct Answer True
Your Answer False

Select The Blank
Question During the costing process, we look at ________.
Correct Answer Resource consumption
Your Answer Resource consumption

Multiple Choice Multiple Answer
Question For accounting standard (AS) 27, Significant influence may be
gained by :-
Correct Answer Share ownership , Statute , Agreement
Your Answer Share ownership , Statute , Agreement

Multiple Choice Multiple Answer
Question As a general rule, an asset is :-
Correct Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
Your Answer A good or a right that a firm owns in a determined moment ,
Capitalized expenses

Multiple Choice Single Answer
Question Deferred payment plan is also known as:-
Correct Answer Earn out plan
Your Answer Earn out plan
True/False
Question There are few methods of allocating depreciation over the useful
life of an assets.
Correct Answer False
Your Answer True
Select The Blank
Question Market approach is used for companies whose shares are
________ on the Stock market.
Correct Answer Listed
Your Answer Listed
Multiple Choice Multiple Answer
Question Operating economies of scale are achieved through the following
mergers :-
Correct Answer Horizontal , Vertical , Conglomerate
Your Answer Horizontal , Vertical , Financial
Multiple Choice Single Answer
Question Tender offers can be afforded by firms with :-
Correct Answer A large amount of financial Slack
Your Answer A large amount of financial Slack
Multiple Choice Single Answer
Question The following method of valuation is used for listed companies
that have an active market for their shares :-
Correct Answer Market value approach
Your Answer Market value approach
Select The Blank
Question According to Altman (1984) total costs in percentage of the
market value of a firm range between ________
Correct Answer 12.1 % & 16.7 %
Your Answer 12.1 % & 16.7 %
Multiple Choice Single Answer
Question Conservative policy for determining the requirements of current
assets is also known as :-
Correct Answer Flexible policy
Your Answer Aggressive policy
Multiple Choice Single Answer
Question Yield or earning approach method of valuation uses :-
Correct Answer Price to earnings ratio
Your Answer Price to earnings ratio
Multiple Choice Multiple Answer
Question The main categories of organisational elements are :-
Correct Answer Managerial , Support , Operational
Your Answer Managerial , Partly functional , Operational
Select The Blank
Question The ________ cost tier has the advantage of being the simplest
to calculate and justify.
Correct Answer Direct
Your Answer Direct
Multiple Choice Multiple Answer
Question The existence of significant influence by an investor is usually
evidenced in the following ways :-
Correct Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Your Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Multiple Choice Single Answer
Question Free Reserves is a component of :-
Correct Answer Equity
Your Answer Equity
Match The Following
Question Correct Answer Your Answer
Sentiments and rumours No fundamental basis. No effect on valuation
Unlisted shares on stock
exchange
Difficult to estimate the
price
Invalid valuation of shares
Manipulation of stock
markets
Invalid valuation of shares Easy to estimate the price
Selective information Valuation by various
people on information
available
Valuation by various
people on information
available
True/False
Question Only firms with a large amount of financial slack can afford
tender offers.
Correct Answer True
Your Answer True
Select The Blank
Question Buy back through book building the process should be made
through ________.
Correct Answer An electronically linked transparent facility
Your Answer Through brokers
Multiple Choice Multiple Answer
Question For M & As, the acquiring firm needs industry data on :-
Correct Answer Market growth , Nature of competition , Degree of regulation
Your Answer Market growth , Marketing capabilities , Nature of competition
True/False
Question The chance of bankruptcy is small when the leverage of a firm is
small.
Correct Answer True
Your Answer False
True/False
Question A change in the method of depreciation is treated as a change in
an accounting policy and is disclosed accordingly.
Correct Answer True
Your Answer True
Select The Blank
Question Economies of scale arises with increase in volume of production
leading to________.
Correct Answer Reduction in the cost of production
Your Answer Reduction in the cost of production
True/False
Question Arbitrage process implies that security cannot sell at different
prices.
Correct Answer True
Your Answer True
Select The Blank
Question Capital gains are taxed at ________.
Correct Answer Preferentially lower rate
Your Answer Acquisition price
Multiple Choice Single Answer
Question Net period - no cash discount means :-
Correct Answer The seller only specifies the time period allowed for the payment
Your Answer Cash on delivery of goods
True/False
Question A long term investment is an investment other than a current
investment.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Accounting standards (AS - 17) has come into effect in respect
of accounting periods commencing :-
Correct Answer On or after 01.04.2001
Your Answer Prior to 01.04.2001
True/False
Question Accounting standards (AS - 13) is now mandatory.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Valuation methods are highly specific to the following for doing
the valuation :-
Correct Answer To the person , To the firm , To the Consultant
Your Answer To the person , To the firm , To the Consultant
Select The Blank
Question ________ Assets in the balance sheet are normally excluded
from the value of total assets.
Correct Answer Intangible
Your Answer Tangible
Multiple Choice Multiple Answer
Question The budgetary records are useful for:-
Correct Answer Validating accounting costs , Providing a rationale for division of
costs , Replacing missing data
Your Answer Validating accounting costs , Allocating indirect costs into
different cost centres , Providing a rationale for division of costs
Multiple Choice Multiple Answer
Question As per the new sections of the company's act, funds out of which
buy back may be financed include :-
Correct Answer Free reserves of the company , Securities premium account ,
Proceeds of any shares or other specified securities
Your Answer Loans taken from banks and financial institutions , Free reserves
of the company , Securities premium account
Match The Following
Question Correct Answer Your Answer
PpH = P / H ( C + B ) / P
SPE = R / H (C + B ) / R
RR = (C + B ) / R P / H
U % = R / ( C + B ) R / ( C + B )
Multiple Choice Multiple Answer
Question Due to diversification employees seek:-
Correct Answer Job security , Better opportunities within the firm , Higher
compensation
Your Answer Job security , Better opportunities within the firm , More perks &
benefits
Select The Blank
Question In today's fast moving world, the quickest way to get information
on a firm is through ________.
Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer
Question It is often not possible to directly attribute, or reasonably allocate
:-
Correct Answer The interest bearing liabilities to segments
Your Answer Goodwill
True/False
Question Odd lots purchase is not a method of buy back of shares.
Correct Answer False
Your Answer True

Multiple Choice Multiple Answer
Question A normal firm shows the following characteristics :-
Correct Answer No unique optimum payout ratio , Market value per share
unaffected by the payout ratio , All dividend policies are similar
Your Answer No unique optimum payout ratio , Market value per share
unaffected by the payout ratio , All dividend policies are similar
Multiple Choice Single Answer
Question One of the bases for determining the residual value of similar
assets is :-
Correct Answer Realizable value
Your Answer Net operational value
Multiple Choice Multiple Answer
Question If a firm diversifies managerial teams formed can be shifted from
unproductive activities to productive ones which leads to :-
Correct Answer Improved profitability , Continuity , Growth of the firm
Your Answer Improved profitability , Continuity , Growth of the firm
Multiple Choice Single Answer
Question Segment liabilities do not include :-
Correct Answer Borrowings & other liabilities that are incurred for financing rather
than operating purpose
Your Answer Other payables
Multiple Choice Single Answer
Question As per Pecking order theory, which is the costliest means of
funding :-
Correct Answer Equity Shares
Your Answer Secured debt
Select The Blank
Question Cost of ________ is more than other sources for raising short -
term finance.
Correct Answer Bank finance
Your Answer Commercial paper
Multiple Choice Multiple Answer
Question Operating economies occur due to indivisibilities of resources
like :-
Correct Answer People , Equipment , Overheads
Your Answer People , Equipment , Overheads
True/False
Question If a company has resorted to buyback its shares, it cannot make
a further issue of the same kind of securities within a period of 1
year.
Correct Answer False
Your Answer True
True/False
Question In value of assets approach for computation of valuation of
shares, the total value of all the assets will be divided by the total
number of shares.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Short term sources of funds include :-
Correct Answer Current Liabilities
Your Answer Term loans
Multiple Choice Single Answer
Question Investment decisions are mainly concerned with :-
Correct Answer Assets
Your Answer Assets
Multiple Choice Multiple Answer
Question Debt reduces :-
Correct Answer Agency cost of free cash flow , Commitment to pay in time to all
lenders , Freedom of decisions
Your Answer Agency cost of free cash flow , Commitment to pay in time to all
lenders , Freedom of decisions
Multiple Choice Multiple Answer
Question The main theories behind share repurchases are :-
Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis ,
Information or signalling hypothesis
Your Answer Dividend or personal taxation hypothesis , Leverage hypothesis ,
Information or signalling hypothesis
Select The Blank
Question The cost of facilities is usually included & distributed as
________.
Correct Answer Depreciation
Your Answer Fringe benefits
Multiple Choice Multiple Answer
Question Investments having no physical existence includes :-
Correct Answer Shares , Debentures , Bonds
Your Answer Bonds , Shares , Debentures
Multiple Choice Multiple Answer
Question An investment property is an investment in land or buildings :-
Correct Answer Not intended to be occupied substantially for use by investing
enterprise , Not intended to be in the operations of the investing
enterprise
Your Answer Not intended to be occupied substantially for use by investing
enterprise , Not intended to be in the operations of the investing
enterprise
Multiple Choice Single Answer
Question If a firm opts for restrictive policy then the investments in current
assets is :-
Correct Answer Low
Your Answer Moderate
True/False
Question According to NOI Approach, any capital structure is optimum.
Correct Answer True
Your Answer True
Select The Blank
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Your Answer Indirectly attributable to the segments
Match The Following
Question Correct Answer Your Answer
Free cash flow theory Enormous conflicts of
interest between
Stakeholders and
shareholders
Many groups of non -
investor stakeholders have
an interest in the firm
Net income approach Cost of debt & equity do
not change with a change
in leverage ratio
Enormous conflicts of
interest between
Stakeholders and
shareholders
Net operating income
approach
The overall capitalization
rate remains constant for
all levels of financial
leverages
Firms have preferences by
choosing a way to finance
their projects
Modigliani - Miller Theory weighted average cost of
capital does not change
with a change in the
proportion of debt to
equity in the capital
structure
Cost of debt & equity do
not change with a change
in leverage ratio
Select The Blank
Question The processes to be identified & focused should to be on the
basis of not adhering to benchmarks, bottlenecks, quality not
met, time problems etc. This is called as ________.
Correct Answer Process analysis
Your Answer Process analysis
Multiple Choice Multiple Answer
Question The main characteristics of operating economies are :-
Correct Answer It is achieved through horizontal, vertical and conglomerate
mergers , It occurs due to indivisibilities of resources , It is
possible in generic management functions
Your Answer Vertical integration has no connection with operating economies
, It is achieved through horizontal, vertical and conglomerate
mergers , It occurs due to indivisibilities of resources
Multiple Choice Single Answer
Question usually the `controlling block' tends to be between :-
Correct Answer 20 & 40 percent
Your Answer 10 & 30 percent
Multiple Choice Multiple Answer
Question The 3 groups of participants in a firm are :-
Correct Answer Suppliers of equity , Debt suppliers , Firm Managers
Your Answer Suppliers of equity , Debt suppliers , Firm Managers
Multiple Choice Single Answer
Question Human Assets accounting stands for :-
Correct Answer Measurement & reporting of the cost and value of people as
organisational resources
Your Answer Calculation of wages paid to casual workers
Multiple Choice Single Answer
Question Profitability of a company depends upon :-
Correct Answer Cost of capital
Your Answer Debt equity ratio
Select The Blank
Question Horizontal mergers involves firms________.
Correct Answer That operate & compete in a similar kind of business
Your Answer With a new & different entity
Match The Following
Question Correct Answer Your Answer
Availability of funds in the
market
Cost of funds depends on
this factor
Different costs are involved
Flexibility The extent & the ease
with which the funds can
be raised & paid back are
very important
The extent & the ease with
which the funds can be
raised & paid back are very
important
Time Takes less time to take an
overdraft from the bank
Takes less time to take an
overdraft from the bank
Creditworthiness of the
issuer
If a company has a good
creditworthiness it is not
difficult to raise short term
funds
If a company has a good
creditworthiness it is not
difficult to raise short term
funds
Multiple Choice Multiple Answer
Question A firm's current assets include :-
Correct Answer Marketable securities , Receivables , Inventory
Your Answer Marketable securities , Receivables , Inventory
Select The Blank
Question If a segment is not designated as a ________ it should be
included as an unallocated reconciling item.
Correct Answer Reportable segment
Your Answer Operating segment
Select The Blank
Question An asset is included in segment assets, if and only if the related
depreciation or amortisation is included in ________.
Correct Answer Segment expense
Your Answer Segment liability
True/False
Question Trade credit creates book debts which the firm is expected to
collect in the near future.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Long term financing strategy is used by a firm to meet :-
Correct Answer Fixed assets requirements , Permanent working capital
requirements , Portion of fluctuating working capital requirement
Your Answer Fixed assets requirements , Permanent working capital
requirements
Multiple Choice Single Answer
Question Debt is often issued at :-
Correct Answer The head office level
Your Answer The head office level
True/False
Question Determination of residual value of an asset is normally a difficult
matter.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question Which of the following systems identifies each of the
organizational elements of the traditional bureaucratic structure
and applies the identifiable costs of that element accordingly?
Correct Answer Organization element accounting
Your Answer Budgetary accounting
Multiple Choice Single Answer
Question Segment result represents :-
Correct Answer Operating profit or loss
Your Answer Net of financing profit or loss
Multiple Choice Single Answer
Question Which of the following is NOT a disadvantage of deferred
payment plan to the acquiring firm?
Correct Answer There is built - in cushion to the acquiring firm as total payment
is not made at the time of acquisition
Your Answer There is built - in cushion to the acquiring firm as total payment
is not made at the time of acquisition
Select The Blank
Question The resource theory considers that the competitive position of a
firm depends on its ________ Assets.
Correct Answer Specific
Your Answer Intangible
True/False
Question Short term financing is meant for funding working capital of a
company.
Correct Answer True
Your Answer False
True/False
Question Money becomes less valuable when received at a latter stage
instead of in present time.
Correct Answer True
Your Answer False
True/False
Question The intellectual assets of a company are often worth 3 or 4 times
the tangible book value.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question One of the selective developments that has taken place in recent
times is companies are going in for :-
Correct Answer Activity based costing and management
Your Answer Activity based costing and management
Multiple Choice Multiple Answer
Question The financial managers of a company consume a great deal of
their time in activities like :-
Correct Answer Monitoring the investment in inventories , Negotiating favourable
credit terms , Administrating Accounts receivables
Your Answer Monitoring the investment in inventories , Negotiating favourable
credit terms , Defining a proper strategy for product promotion
Select The Blank
Question If total external revenue attributable to reportable segments
constitutes less than ________ of the total enterprise revenue
additional segments should be identified as reportable
segments.
Correct Answer 75 percent
Your Answer 50 percent
True/False
Question A single organisation model serves to keep all individual
initiatives to be targeted into a co-ordinated plan.
Correct Answer True
Your Answer True
True/False
Question Valuation of current investments on overall basis is not
considered appropriate.
Correct Answer True
Your Answer True

True/False
Question Accounting standards (AS - 13) is now mandatory.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Exit costs are classified into 3 categories namely :-
Correct Answer Lost efficiency prior to separation , Job vacancy cost during the new
search , Termination pay
Your Answer Job vacancy cost during the new search , Termination pay ,
Recruiting new employee as a replacement of the left employee
Multiple Choice Multiple Answer
Question A firm's current assets include :-
Correct Answer Marketable securities , Receivables , Inventory
Your Answer Marketable securities , Receivables , Inventory
Multiple Choice Multiple Answer
Question In a merger decision, the value of a firm depends upon:-
Correct Answer Earnings , Operating characteristics of acquiring firm , Financial
characteristics of acquiring firm
Your Answer Earnings , Manpower of the acquiring firm , Financial characteristics
of acquiring firm
Multiple Choice Multiple Answer
Question A company is permitted to buy back its shares through stock
exchange in the following situations :-
Correct Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , The
buy back shall be made only on stock exchanges with electronic
trading facility
Your Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , It is
not mandatory to specify the maximum price at which the buy back
will be made
True/False
Question A merger will make sense to the acquiring firm if its shareholders
benefit.
Correct Answer True
Strategic Finance II Page 2 of 8
Your Answer True
Select The Blank
Question ________ Assets in the balance sheet are normally excluded from
the value of total assets.
Correct Answer Intangible
Your Answer Intangible
Multiple Choice Single Answer
Question What is a very important factor in any kind of merger?
Correct Answer Exchange ratio
Your Answer Pre merger price
Select The Blank
Question A shareholder expects a higher rate of return as a firm's
compensation for ________.
Correct Answer Increased risk
Your Answer Investment in projects to improve prestige or power
True/False
Question Usually cost data is perfect for ABC Analysis & distribution.
Correct Answer False
Your Answer True
Select The Blank
Question Forward or backward integration is a characteristic of ________.
Correct Answer Vertical Mergers
Your Answer Vertical Mergers
Multiple Choice Single Answer
Question Segment assets are determined after :-
Correct Answer Deducting related allowances / provisions reported as direct offsets
Your Answer Deducting income tax assets
Multiple Choice Single Answer
Question Acceptable audit requirements cannot be overlooked even under the
pressure of :-
Strategic Finance II Page 3 of 8
Correct Answer Timeliness & turnaround
Your Answer Mergers & acquisitions
Multiple Choice Single Answer
Question Which of the following is NOT a disadvantage of deferred payment
plan to the acquiring firm?
Correct Answer There is built - in cushion to the acquiring firm as total payment is not
made at the time of acquisition
Your Answer Freedom of operation to the management of the newly acquired firm
True/False
Question A single organisation model serves to keep all individual initiatives to
be targeted into a co-ordinated plan.
Correct Answer True
Your Answer True
True/False
Question Assets held as stock - in - trade are also investments.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question In an aggressive approach :-
Correct Answer There is a very large risk of shortage of funds
Your Answer There is a very large risk of shortage of funds
True/False
Question Organisational changes are similar to mission changes.
Correct Answer True
Your Answer False
Multiple Choice Multiple Answer
Question The internal staffing performance indicators are :-
Correct Answer Sales per employee , Recovery rate , Utilization %
Your Answer Sales per employee , Recovery rate , Utilization %
Select The Blank
Strategic Finance II Page 4 of 8
Question The most popular kind of dividend policy is one that pays a
________.
Correct Answer Regular, steady dividend
Your Answer Regular, steady dividend
Match The Following
Question Correct Answer Your Answer
Amount involved in buy
back
Not to exceed 25 % of the
total paid up capital
Not to exceed 25 % of the
total paid up capital
Articles of Association Authorize buy back of
securities
Resolution permitting the
buy back of shares
Board of Directors Resolution permitting the
buy back of shares
Authorize buy back of
securities
Shares to be bought back Fully paid up Fully paid up
Multiple Choice Single Answer
Question A good accounting system does NOT have the characteristics such
as :-
Correct Answer Does not cover decisions over the life cycle
Your Answer Takes into account time as an important parameter
Multiple Choice Single Answer
Question Fixed price tender offers are accompanied by an abnormal
announcement period return of :-
Correct Answer 8 - 10 %
Your Answer 6 - 8 %
Multiple Choice Multiple Answer
Question The external staffing performance indicators include :-
Correct Answer Compensation per Re. Profit , Personnel services head count , Profit
per head
Your Answer Compensation per Re. Profit , Personnel services head count ,
Recovery rate
Match The Following
Question Correct Answer Your Answer
Trust receipt Specifically identified by
serial number or other
means
Specifically identified by
serial number or other
means
Terminal warehouse receipt Inventory is stored with a
public or terminal
Inventory is stored with a
public or terminal
Strategic Finance II Page 5 of 8
warehousing company warehousing company
Floating lien Loose arrangement as the
lender may find it difficult to
police
Well suited for financial
good inventories of capital
goods
Chattel mortgage Well suited for financial
good inventories of capital
goods
Affords a higher degree of
control over the collateral
Select The Blank
Question In today's fast moving world, the quickest way to get information on a
firm is through ________.
Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer
Question Companies often need to value its own :-
Correct Answer Shares
Your Answer Shares
Multiple Choice Multiple Answer
Question Long term financing strategy is used by a firm to meet :-
Correct Answer Fixed assets requirements , Permanent working capital requirements
, Portion of fluctuating working capital requirement
Your Answer Fixed assets requirements , Permanent working capital requirements
True/False
Question For determining exchange ratio, the model developed by Conn &
Nielson is used.
Correct Answer True
Your Answer True
Select The Blank
Question usually credit lines are established for a period of ________.
Correct Answer 1 year
Your Answer 3 years
Multiple Choice Multiple Answer
Question Shortcomings of accounting numbers consist of the following :-
Strategic Finance II Page 6 of 8
Correct Answer Firms use different kind of accounting methods , Business risk and
financial risk do not have any influence on accounting numbers
Your Answer Dividend policy has lot of influence on accounting numbers ,
Business risk and financial risk do not have any influence on
accounting numbers , There is a serious relationship between
economic value and profit
Select The Blank
Question Investors can reduce the company related risk by diversification of
their investments in ________.
Correct Answer Shares of a large number of companies
Your Answer Mutual funds
True/False
Question Making decision on dividend is a very crucial area of financial
management for a firm.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The following is not a factor for reduction in the life of an asset by
obsolescence :-
Correct Answer No study of market demand for a product / service
Your Answer Legal restrictions
Multiple Choice Multiple Answer
Question Due to diversification employees seek:-
Correct Answer Job security , Better opportunities within the firm , Higher
compensation
Your Answer Job security , Better opportunities within the firm , More perks &
benefits , Higher compensation
Multiple Choice Single Answer
Question Research into true human resources accounting began in :-
Correct Answer 1960`s
Your Answer 1994
Select The Blank
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Your Answer Directly attributable to the segment
Strategic Finance II Page 7 of 8
True/False
Question AS 13 statement does not deal with operating or finance leases.
Correct Answer True
Your Answer True
Select The Blank
Question The costs should be gathered & allocated within the organisation at
the ________ structural layer.
Correct Answer Lowest possible
Your Answer Lowest possible
Multiple Choice Single Answer
Question Value implies that something has :-
Correct Answer Worth
Your Answer Worth
Multiple Choice Multiple Answer
Question Examples of accounting methods used by firm are :-
Correct Answer FIFO , LIFO , Accrual Accounting
Your Answer FIFO , LIFO , Accrual Accounting
Multiple Choice Multiple Answer
Question The main assumptions for stock repurchase models are as follows :-
Correct Answer The market is efficient , There is perfect competition in the securities
market
Your Answer The market is efficient , Offers are minimum limit offers. , Investors
are not very keen to maximize the value of their investment
Multiple Choice Multiple Answer
Question As a general rule, an asset is :-
Correct Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
Your Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
True/False
Question It is easy to find a risk free security.
Correct Answer False
Strategic Finance II Page 8 of 8
Your Answer False
Multiple Choice Single Answer
Question The earning power of the company approach includes :-
Correct Answer Mainly discounting of all future earnings
Your Answer Mainly discounting of all future earnings
Select The Blank
Question During the costing process, we look at ________.
Correct Answer Resource consumption
Your Answer Resource consumption
Select The Blank
Question Mature companies with stable earnings generally pay out ________.
Correct Answer A high proportion of earnings
Your Answer A high proportion of earnings

True/False
Question Value based approach of HRA tracking can be divided into 2
categories - Non - monetary & monetary.
Correct Answer True
Your Answer False
True/False
Question The activity model is normally created by an activity Accountant.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Organisations have various records and reports from past
actions such as :-
Correct Answer Logs to record workflow , Specific costs , External and internal
audit reports
Your Answer Logs to record workflow , Specific costs , General studies and
processes
Select The Blank
Question In today's fast moving world, the quickest way to get information
on a firm is through ________.
Correct Answer Internet
Your Answer Internet
Select The Blank
Question The cost of facilities is usually included & distributed as
________.
Correct Answer Depreciation
Your Answer Fringe benefits
Multiple Choice Multiple Answer
Question The existence of significant influence by an investor is usually
evidenced in the following ways :-
Correct Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Your Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Multiple Choice Multiple Answer
Question The direct costs tier normally only includes the following :-
Correct Answer The personnel payroll , Supplies , Individual rental equipment
Your Answer The personnel payroll , Support costs , Supplies
Multiple Choice Multiple Answer
Question While accounting for human assets, the following data is to be
considered :-
Correct Answer Full time equivalent staff , Revenues , Expenses
Your Answer Full time equivalent staff , Expenses , Good will
Multiple Choice Multiple Answer
Question Accrued expenses represent :-
Correct Answer Costless financing , An interest free source of financing
Your Answer Costless financing , An interest free source of financing , Truly
discretionary financing
True/False
Question The accounting records serve as the major source of cost data.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Conservative policy for determining the requirements of current
assets is also known as :-
Correct Answer Flexible policy
Your Answer Aggressive policy
Multiple Choice Single Answer
Question When the working capital is less than its peak level :-
Correct Answer The surplus is invested in liquid assets
Your Answer The surplus is invested in liquid assets
True/False
Question optimum cash balance under certainty i.e. Baumul`s model
allows the cash flow to fluctuate.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question open account credit appears on the buyer's balance sheet as :-
Correct Answer Accounts payable
Your Answer Accounts receivables
Select The Blank
Question According to Altman (1984) total costs in percentage of the
market value of a firm range between ________
Correct Answer 12.1 % & 16.7 %
Your Answer less than 10 %
Multiple Choice Single Answer
Question According to a survey for reasons for share purchase, what is
the percentage of cash distribution to cash holders ?
Correct Answer 0.28
Your Answer 0.28
Select The Blank
Question ________ is not a characteristic of financial conglomerates.
Correct Answer Provide ineffective competitive process
Your Answer Provide ineffective competitive process
Multiple Choice Multiple Answer
Question The important steps involved in the analysis of mergers &
acquisitions are:-
Correct Answer Planning , Searching & screening , Financial evaluation
Your Answer Consultation with shareholders , Planning , Searching &
screening
Multiple Choice Multiple Answer
Question Trade credits are of the following types:-
Correct Answer Notes payable , Trade acceptances , Open accounts
Your Answer Notes payable , Trade acceptances , Commercial paper
True/False
Question The statute governing an enterprise may provide the basis for
computation of the depreciation.
Correct Answer True
Your Answer True
Select The Blank
Question The clean up period is usually ________ months.
Correct Answer 1 to 2 months
Your Answer 3 months
Multiple Choice Single Answer
Question Any addition or extension to an existing asset which retains a
separate identify & is capable of being used after the existing
asset is disposed of :-
Correct Answer Is depreciated independently
Your Answer Is depreciated along with the existing asset
Match The Following
Question Correct Answer Your Answer
Amount involved in buy
back
Not to exceed 25 % of the
total paid up capital
Authorize buy back of
securities
Articles of Association Authorize buy back of
securities
Not to exceed 25 % of the
total paid up capital
Board of Directors Resolution permitting the
buy back of shares
The ratio of debt to total
capital & free reserves
should be 1 : 1
Shares to be bought back Fully paid up Resolution permitting the
buy back of shares
Multiple Choice Single Answer
Question Acceptable audit requirements cannot be overlooked even under
the pressure of :-
Correct Answer Timeliness & turnaround
Your Answer Timeliness & turnaround
True/False
Question A long term investment is an investment other than a current
investment.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Book value of the assets is directly dependent on the accounting
policies followed by the company which is used in the following
areas :-
Correct Answer Booking depreciation , Methods of provisions , Inventory
valuation
Your Answer Booking depreciation , Methods of provisions , Inventory
valuation
Select The Blank
Question Identify disclosure on human resources as a societal concern &
prepare international regulations comes under ________
Correct Answer The compulsory method
Your Answer The voluntary market based method
Multiple Choice Multiple Answer
Question Walter's model on dividend relevance is based on the following
assumptions :-
Correct Answer Internal financing , Constant return and cost of capital , 100 Per
cent payout or retention
Your Answer Internal financing , Constant return and cost of capital , Perfect
markets
Multiple Choice Single Answer
Question When competition is high in the market, it is :-
Correct Answer Essential to maintain a larger inventory of finished goods
Your Answer Necessary that firms should have less working capital
requirement
Multiple Choice Single Answer
Question A manufacturing concern like a machine tool has :-
Correct Answer A long operating cycle
Your Answer Sells largely on cash basis
True/False
Question Decisions related to working capital are repetitive & frequent.
Correct Answer True
Your Answer True
Select The Blank
Question In many companies, there is no formal record of________.
Correct Answer Investment in employees
Your Answer Investment in employees
Select The Blank
Question Depreciation is ________ of an asset.
Correct Answer Loss of value
Your Answer Loss of value
Match The Following
Question Correct Answer Your Answer
Mortgage Pertains to immovable
properties
Duty of the bank to take
care of movable goods
Lien The bank has a right to
retain the goods belonging
to the company until the
debts due to the bank are
paid
The bank has a right to
retain the goods belonging
to the company until the
debts due to the bank are
paid
Hypothecation A charge against property
for an amount of debt
A lender does not keep
track of individual accounts
Pledge Duty of the bank to take
care of movable goods
Have high costs of
processing the collateral &
risk of fraud
Multiple Choice Multiple Answer
Question Significant influence is the power to :-
Correct Answer Participate in the financial decisions , Participate in the operating
policy decisions
Your Answer Participate in the financial decisions , Participate in the operating
policy decisions , Growth & diversify
Select The Blank
Question Stock repurchases ________ the debt / equity ratio.
Correct Answer Increases
Your Answer Increases
True/False
Question Organisational changes are similar to mission changes.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Where the management's estimate of the useful life of an asset
of the enterprise is shorter than that envisaged under the
provisions of the relevant statute, the depreciation provision is
approximately computed :-
Correct Answer By applying a higher rate
Your Answer By applying a lower rate
Select The Blank
Question An asset is included in segment assets, if and only if the related
depreciation or amortisation is included in ________.
Correct Answer Segment expense
Your Answer Segment revenue
Multiple Choice Multiple Answer
Question The support elements consists of important functions such as :-
Correct Answer Payroll , Accounting , Automatic data processing
Your Answer Payroll , Co-ordination , Accounting
Multiple Choice Single Answer
Question Cost benefit analysis is the simplest form of comparison between
:-
Correct Answer Ideas to determine which is faster, better or cheaper
Your Answer Value added & non value added activities
Multiple Choice Multiple Answer
Question Valuation methods are highly specific to the following for doing
the valuation :-
Correct Answer To the person , To the firm , To the Consultant
Your Answer To the person , To the firm , To the Consultant
Multiple Choice Single Answer
Question Arbitrage means :-
Correct Answer Securities cannot sell at different prices
Your Answer Selling a security
Select The Blank
Question Credit standards should be relaxed upon the point where
incremental returns ________ incremental costs.
Correct Answer Equals
Your Answer Have no correlation with
Multiple Choice Single Answer
Question Modigliani - Miller Theoram is based on :-
Correct Answer Perfect Capital Markets
Your Answer Perfect Capital Markets
True/False
Question Dividends increase the current returns for shareholders.
Correct Answer True
Your Answer False
True/False
Question When a company is able to assess an individual's worth, it helps
in increasing its own worth.
Correct Answer True
Your Answer True

Match The Following
Question Correct Answer Your Answer
Opportunity cost An asset value when they
are the target of an
alternative use.
Lost efficiency prior to
separation, Job vacancy
cost during the new search
& termination pay.
Exit cost Lost efficiency prior to
separation, Job vacancy
cost during the new
search & termination pay.
Exit costs of the leaving
employee & recruiting &
training of the replacement
Historical costs Sacrifice necessary to hire
& train people
An asset value when they
are the target of an
alternative use.
Substitution cost Exit costs of the leaving
employee & recruiting &
training of the
replacement
Sacrifice necessary to hire
& train people
Multiple Choice Single Answer
Question Book value is relevant to determine the firm's value because of
the following reasons except:-
Correct Answer It cannot be used as a starting point to be compared &
complimented by other analysis
Your Answer It is used as a starting point
True/False
Question For determining exchange ratio, the model developed by Conn &
Nielson is used.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Normally the basis for identifying an enterprise segments are :-
Correct Answer The organizational structure of an enterprise
Your Answer Location of its customers
Multiple Choice Single Answer
Question FEA is a technique to analyze & evaluate :-
Correct Answer Alternative process improvements
Your Answer Alternative process improvements
True/False
Question Arbitrage process implies that security cannot sell at different
prices.
Correct Answer True
Your Answer False
Select The Blank
Question ________ is not a characteristic of financial conglomerates.
Correct Answer Provide ineffective competitive process
Your Answer Provide ineffective competitive process
True/False
Question Retained earnings are the most important internal sources of
financing the growth of the firm.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Significant influence is the power to :-
Correct Answer Participate in the financial decisions , Participate in the operating
policy decisions
Your Answer Participate in the financial decisions , Participate in the operating
policy decisions , Control over the policies
Multiple Choice Single Answer
Question For paying dividends, firms will have a given amount of :-
Correct Answer Cash available
Your Answer Cash available
Multiple Choice Multiple Answer
Question The characteristics of working capital are :-
Correct Answer It is continually required for a going concern , Quantum of
working capital fluctuates depending on the level of activity , It is
impacted by numerous transactions on a continuous basis
Your Answer The decisions related are one time decisions only , It is
continually required for a going concern , Quantum of working
capital fluctuates depending on the level of activity
Select The Blank
Question Earning power of the company approach tries to value the
________.
Correct Answer Current value of the assets
Your Answer Income / profit from the assets
Multiple Choice Multiple Answer
Question As per AS 13 Statement, the following are not considered as
investments:-
Correct Answer Shares , Debentures , Other securities held as stock in trade
Your Answer Land , Debentures
Multiple Choice Multiple Answer
Question Operating economies of scale are achieved through the following
mergers :-
Correct Answer Horizontal , Vertical , Conglomerate
Your Answer Vertical , Conglomerate , Financial
True/False
Question Usually only a single method is used for valuation of shares.
Correct Answer False
Your Answer False
Select The Blank
Question As per residual theory of dividends the focus is on ________.
Correct Answer Growth
Your Answer Growth
True/False
Question Management of working capital refers to the management of
total assets and liabilities of a company.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question The important aspect of dividend policy is :-
Correct Answer To determine the amount of earnings to be distributed to
shareholders , Amount to be retained in the firm
Your Answer To determine the amount of earnings to be distributed to
shareholders , Amount to be retained in the firm
Multiple Choice Multiple Answer
Question The cost of an investment includes charges such as :-
Correct Answer Brokerage , Fees , Duties
Your Answer Brokerage , Fees , Duties
Select The Blank
Question Forfeiting is mostly used for ________.
Correct Answer Big ticket items & durable goods
Your Answer Big ticket items & durable goods
True/False
Question Planning helps an acquiring firm to identify the units it should
drop & it should add.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Segment information needs to be presented :-
Correct Answer Only on the basis of the consolidated financial statements
Your Answer As separate financial statements
Select The Blank
Question Postage is an example of ________ cost.
Correct Answer Non traceable cost
Your Answer Input cost
Match The Following
Question Correct Answer Your Answer
Earning per share Acquisition is considered
to be a function of the
impact of the merger on
Divide net worth by the
number of equity shares
outstanding
the EPS
Book value Divide net worth by the
number of equity shares
outstanding
Acquisition is considered to
be a function of the impact
of the merger on the EPS
Appraisal value Provides a list of the
reasonableness of results
obtained through methods
base upon the going
concern concept
Evaluate the impact of the
merger on EPS & price -
earning ratio
Market value Indicate the consensus of
the investors
Decide if the acquisition is
attractive on the basis if
NPV
Multiple Choice Multiple Answer
Question Book value of the assets is directly dependent on the accounting
policies followed by the company which is used in the following
areas :-
Correct Answer Booking depreciation , Methods of provisions , Inventory
valuation
Your Answer Booking depreciation , Methods of provisions , Inventory
valuation
Multiple Choice Multiple Answer
Question Every business requires funds on a continual basis for expenses
incurred on for :-
Correct Answer Purchase of raw material , Manufacturing costs , Administration
Your Answer Purchase of raw material , Manufacturing costs , Administration
Select The Blank
Question Forward or backward integration is a characteristic of ________.
Correct Answer Vertical Mergers
Your Answer Conglomerate mergers
True/False
Question According to NI Approach, decrease in leverage decreases the
overall cost of capital and increases the firm's value.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question If a firm diversifies managerial teams formed can be shifted from
unproductive activities to productive ones which leads to :-
Correct Answer Improved profitability , Continuity , Growth of the firm
Your Answer Improved profitability , Growth of the firm , Better facilities and
work conditions
Multiple Choice Single Answer
Question Best practices, a tool for review process is similar to :-
Correct Answer Bench marking
Your Answer Value added analysis
Multiple Choice Single Answer
Question One of the important assumptions for capital structure theories is
:-
Correct Answer Debt and equity are the 2 kinds of funds used by the firm
Your Answer Debt and equity are the 2 kinds of funds used by the firm
True/False
Question If a company has resorted to buyback its shares, it cannot make
a further issue of the same kind of securities within a period of 1
year.
Correct Answer False
Your Answer True
True/False
Question The scope of the data required relates to the scope of the activity
model & processes under review.
Correct Answer True
Your Answer True
Select The Blank
Question The ________ cost tier has the advantage of being the simplest
to calculate and justify.
Correct Answer Direct
Your Answer Direct
Select The Blank
Question Stock repurchases ________ the debt / equity ratio.
Correct Answer Increases
Your Answer Decreases
Select The Blank
Question The resource theory considers that the competitive position of a
firm depends on its ________ Assets.
Correct Answer Specific
Your Answer General
Multiple Choice Single Answer
Question Many companies claim their main assets are their :-
Correct Answer People
Your Answer People
Multiple Choice Multiple Answer
Question The important steps involved in the analysis of mergers &
acquisitions are:-
Correct Answer Planning , Searching & screening , Financial evaluation
Your Answer Planning , Searching & screening , Financial evaluation
Select The Blank
Question ________ is not a example of segment liability.
Correct Answer Goodwill
Your Answer Product warranty provision
Select The Blank
Question If a segment is not designated as a ________ it should be
included as an unallocated reconciling item.
Correct Answer Reportable segment
Your Answer Business segment
Multiple Choice Multiple Answer
Question The main characteristics of CAPM are :-
Correct Answer It is an equilibrium Model , It describes the pricing of assets as
well as derivatives , Expected security return = Riskless return +
beta x (expected market risk premium)
Your Answer It is an equilibrium Model , It describes the pricing of assets as
well as derivatives , Expected security return = Riskless return +
beta x (expected market risk premium)
Multiple Choice Single Answer
Question Debt suppliers main concern is :-
Correct Answer Interest & debt repayment
Your Answer Interest & debt repayment
True/False
Question Organisational changes are similar to mission changes.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question The difference between current assets & current liabilities is
known as :-
Correct Answer Net working capital
Your Answer Working capital cycle
Multiple Choice Multiple Answer
Question The 3 groups of participants in a firm are :-
Correct Answer Suppliers of equity , Debt suppliers , Firm Managers
Your Answer Suppliers of equity , Debt suppliers , Firm Managers
Multiple Choice Single Answer
Question When the working capital is less than its peak level :-
Correct Answer The surplus is invested in liquid assets
Your Answer The surplus is invested in liquid assets
Multiple Choice Single Answer
Question According to a survey for reasons for share purchase, what is
the percentage of cash distribution to cash holders ?
Correct Answer 0.28
Your Answer 0.28

Multiple Choice Single Answer
Question Any addition or extension to an existing asset which retains a separate
identify & is capable of being used after the existing asset is disposed of :-
CorrectAnswer Is depreciated independently
Your Answer Is depreciated along with the existing asset
True/False
Question In market value approach, interested parties never manipulate the stock
markets.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question For accounting standard (AS) 27, Significant influence may be gained by
:-
Correct Answer Share ownership , Statute , Agreement
Your Answer Share ownership , Statute , Agreement
Multiple Choice Single Answer
Question Accounts payable is also known as :-
Correct Answer Trade credit from suppliers
Your Answer Trade credit from suppliers
Select The Blank
Question Earning power of the company approach tries to value the ________.
Correct Answer Current value of the assets
Your Answer Current value of the assets
Match The Following
Question Correct Answer Your Answer
Free cash flow theory Enormous conflicts of interest between Stakeholders and
shareholders Enormous conflicts of interest between Stakeholders and shareholders
Net income approach Cost of debt & equity do not change with a change in leverage
ratio Cost of debt & equity do not change with a change in leverage ratio
Net operating income approach The overall capitalization rate remains constant for
all levels of financial leverages The overall capitalization rate remains constant for
all levels of financial leverages
Modigliani - Miller Theory weighted average cost of capital does not change with a
change in the proportion of debt to equity in the capital structure weighted average cost
of capital does not change with a change in the proportion of debt to equity in the capital
structure
Multiple Choice Single Answer
Question Where the management's estimate of the useful life of an asset of the
enterprise is shorter than that envisaged under the provisions of the relevant statute, the
depreciation provision is approximately computed :-
Correct Answer By applying a higher rate
Your Answer By applying a lower rate
Multiple Choice Single Answer
Question What is a very important factor in any kind of merger?
Correct Answer Exchange ratio
Your Answer Post merger price
Select The Blank
Question Segment expense includes ________.
Correct Answer The relevant portion of enterprise revenue that can be allocated on
a reasonable basis to a segment
Your Answer General administrative expenses
Multiple Choice Single Answer
Question The depreciable assets are assets which are expected to be used :-
Correct Answer During more than 1 accounting period
Your Answer During more than 1 accounting period
True/False
Question Arbitrage process implies that security cannot sell at different prices.
CorrectAnswer True
Your Answer True
Multiple Choice Single Answer
Question Which is an example out of the following to which special consideration
apply for depreciation :-
Correct Answer Regenerative natural resources
Your Answer Regenerative natural resources
True/False
Question Baumul`s Model is similar to EOQ model in inventory management.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Financial evaluation involves :-
Correct Answer Determining the earnings , Areas of risk , Best way to finance a
merger
Your Answer Determining the earnings , Areas of risk , Best way to finance a
merger
Multiple Choice Single Answer
Question The difference between current assets & current liabilities is known as :-
Correct Answer Net working capital
Your Answer Net working capital
Select The Blank
Question Stock repurchases ________ the debt / equity ratio.
Correct Answer Increases
Your Answer Increases
Multiple Choice Single Answer
Question Which of the following systems identifies each of the organizational
elements of the traditional bureaucratic structure and applies the identifiable costs of that
element accordingly?
Correct Answer Organization element accounting
Your Answer Organization element accounting
Multiple Choice Multiple Answer
Question The major conditions to be fulfilled for buyback of shares as per the legal
provisions include :-
Correct Answer Articles of association should authorize buyback of shares , The
shares which are sought to be bought back should be fully paid up , After the buy back
the ratio of debt to total capital and free reserves should not be more than 2 : 1
Your Answer After the buy back the ratio of debt to total capital and free
reserves should not be more than 2 : 1 , Articles of association should authorize buyback
of shares , The shares which are sought to be bought back should be fully paid up
True/False
Question Determination of residual value of an asset is normally a difficult matter.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Free Reserves is a component of :-
Correct Answer Equity
Your Answer Equity
Multiple Choice Single Answer
Question Short term sources of funds include :-
Correct Answer Current Liabilities
Your Answer Capital
True/False
Question To `gather costs', means capturing all relevant expenses that pertain to the
selected model and processes.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question When a company has resorted to buyback of its shares it cannot make a
further issue of the same kind of securities within a period of how many months?
Correct Answer 6 months
Your Answer 6 months
Select The Blank
Question At times managers invest in projects that improve the company's
________.
Correct Answer Prestige or power
Your Answer Value
Multiple Choice Multiple Answer
Question It is the activity accountant's job to do the following for the existing
organisational structure :-
Correct Answer To define the costs , To refine the costs , To document the costs
Your Answer To define the costs , To document the costs , Support the costing of
the activities
Multiple Choice Single Answer
Question One of the important assumptions for capital structure theories is :-
Correct Answer Debt and equity are the 2 kinds of funds used by the firm
Your Answer Debt and equity are the 2 kinds of funds used by the firm
True/False
Question Assets held as stock - in - trade are also investments.
Correct Answer False
Your Answer True
Select The Blank
Question As per residual theory of dividends the focus is on ________.
Correct Answer Growth
Your Answer Payout of dividends even if the funds are unavailable
Multiple Choice Single Answer
Question Profitability of a company depends upon :-
Correct Answer Cost of capital
Your Answer Earning per share
Select The Blank
Question HLL the largest FMCG company has a turnover of Rs. ________.
Correct Answer 118 Bn
Your Answer 1000 crores
Multiple Choice Multiple Answer
Question The characteristics of working capital are :-
Correct Answer It is continually required for a going concern , Quantum of
working capital fluctuates depending on the level of activity , It is impacted by numerous
transactions on a continuous basis
Your Answer It is continually required for a going concern , Quantum of
working capital fluctuates depending on the level of activity , It is impacted by numerous
transactions on a continuous basis
Multiple Choice Multiple Answer
Question If a firm diversifies managerial teams formed can be shifted from
unproductive activities to productive ones which leads to :-
Correct Answer Improved profitability , Continuity , Growth of the firm
Your Answer Improved profitability , Continuity , Growth of the firm
Multiple Choice Single Answer
Question In the tender offer, the purchaser approaches :-
Correct Answer The shareholder
Your Answer The shareholder
Multiple Choice Multiple Answer
Question To overcome the problems of matching data the actions can be taken as
follows :-
Correct Answer Keep extensive records of the process , Maintain detailed
procedures , Keep records of assumptions as an audit trail
Your Answer Keep extensive records of the process , Maintain detailed
procedures , Keep records of assumptions as an audit trail
Select The Blank
Question In the shareholding pattern of a company, the promoter's holding
includes________.
Correct Answer Foreign Promoters
Your Answer Foreign Promoters
Multiple Choice Multiple Answer
Question A current investment is an investment that is by nature :-
Correct Answer Readily realisable , Intended to be held for not more than 1year
from the date on which investment is made
Your Answer Readily realisable , Intended to be held for not more than 1year
from the date on which investment is made
True/False
Question Trade credit creates book debts which the firm is expected to collect in the
near future.
Correct Answer True
Your Answer True
True/False
Question The chance of bankruptcy is small when the leverage of a firm is small.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The 3 groups of participants in a firm are :-
Correct Answer Suppliers of equity , Debt suppliers , Firm Managers
Your Answer Suppliers of equity , Debt suppliers , Firm Managers
Multiple Choice Multiple Answer
Question The financial managers of a company consume a great deal of their time in
activities like :-
Correct Answer Monitoring the investment in inventories , Negotiating favourable
credit terms , Administrating Accounts receivables
Your Answer Monitoring the investment in inventories , Negotiating favourable
credit terms , Defining a proper strategy for product promotion
True/False
Question Appraisal value of a firm can be acquired from an independent appraisal
agency.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The following categories of personnel are taken into account to calculate
the actual manpower strength :-
Correct Answer Full time equivalents , Temporary staff , Part time personnel
Your Answer Full time equivalents , Temporary staff , Casual workers
Multiple Choice Multiple Answer
Question Accrued expenses represent :-
Correct Answer Costless financing , An interest free source of financing
Your Answer Costless financing , An interest free source of financing , Truly
discretionary financing
Select The Blank
Question There is a ________ relationship between the number of employees & the
use of operating supplies.
Correct Answer Natural
Your Answer Natural
Match The Following
Question Correct Answer Your Answer
Mechanisms Performs or provides energy to an activity Performs or provides energy
to an activity
Inputs Information or material used to produce the output of an activity Information or
material used to produce the output of an activity
Controls Information or material that constrains an activity Information or
material that constrains an activity
Outputs Information or material produced by an activity Information or
material produced by an activity
Multiple Choice Single Answer
Question Value added analysis :-
Correct Answer Helps to identify potential activities that may be omitted
immediately
Your Answer Does not assist the planners & project teams
True/False
Question Notes payable means the buyer signs a note that evidences a debt to the
seller.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Exit costs are classified into 3 categories namely :-
Correct Answer Lost efficiency prior to separation , Job vacancy cost during
the new search , Termination pay
Multiple Choice Multiple Answer
Question The 3 groups of participants in a firm are :-
Correct Answer Suppliers of equity , Debt suppliers , Firm Managers
True/False
Question Tender offers us an alternative approach to acquire another
firm.
Correct Answer TRUE
Select The Blank
Question Increase in cost of capital means decrease in ________.
Correct Answer Profitability
Multiple Choice Single Answer
Question To calculate depreciable amount the following is subtracted
from its historical cost :-
Correct Answer Estimated residual value
Multiple Choice Single Answer
Question The value of the asset does not include:-
Correct Answer Price per share
Multiple Choice Multiple Answer
Question The main characteristics of CAPM are :-
Correct Answer It is an equilibrium Model , It describes the pricing of assets
as well as derivatives , Expected security return = Riskless return + beta x )
(expected market risk premium
True/False
Question Assets held as stock - in - trade are also investments.
Correct Answer FALSE
Select The Blank
Question Segment revenue includes ________.
Correct Answer Revenue from transactions with other segments of the
enterprise
Multiple Choice Single Answer
Question Which is an example out of the following to which special
consideration apply for depreciation :-
Correct Answer Regenerative natural resources
Multiple Choice Single Answer
Question The value based approach of HRA Tracking suggests
that the value of human resources depends upon :-
Correct Answer Capacity to generate revenue
True/False
Question According to NI Approach, decrease in leverage decreases
the overall cost of capital and increases the firm's value.
Correct Answer FALSE
Multiple Choice Multiple Answer
Question The employer in offering the job contract assumes a range
of legal obligations such as :-
Correct Answer Rewards - cash like & non cash like , Health & safety policies ,
Pensions & contributions to social security payments
Multiple Choice Multiple Answer
Question The main categories of organisational elements are :-
Correct Answer Managerial , Support , Operational
Multiple Choice Single Answer
Question Controlling block is usually acquired from:-
Correct Answer A single seller
Multiple Choice Multiple Answer
Question Personnel services expenses is made up of:-
Correct Answer Personnel salaries , Cost of facilities , Training &
development budgets
True/False
Question Valuation of current investments on overall basis is not
considered appropriate.
Correct Answer TRUE
Select The Blank
Question Combination of 2 or more companies into existing company
is called ________.
Correct Answer Absorption
Multiple Choice Multiple Answer
Question An investment property is an investment in land or buildings :-
Correct Answer Not intended to be occupied substantially for use by ,
investing enterprise Not intended to be in the operations of the investing enterprise
True/False
Question Organisational changes are similar to mission changes.
Correct Answer TRUE
Match The Following
Question Correct AnsYwoeurr Answer
Free cash Enormous conflicts of interest between Stakeholders and shareholders
flow theory
Net incomeCost of debt & equity do not change with a change in leverage ratio
approach
Net opera The overall capitalization rate remains constant for all levels of financial
ting income approach leverages
Modigliani -weighted average cost of capital does not change with a change
Miller Theory in the proportion of debt to equity in the capital structure
Select The Blank
Question In the shareholding pattern of a company, the promoter's
holding includes________.
Correct Answer Foreign Promoters
Multiple Choice Single Answer
Question Yield or earning approach method of valuation uses :-
Correct Answer Price to earnings ratio
Multiple Choice Single Answer
Question As per Pecking order theory, which is the costliest means
of funding :-
Correct Answer Equity Shares
True/False
Question The carrying amount for current investments is the lower of
cost & fair value.
Correct Answer TRUE
Multiple Choice Multiple Answer
Question The limitations of value of assets approach include :-
Correct Answer Book value of the assets is directly dependent on the
accounting policies followed by the company , There are no standard procedures
for valuation of intangible assets , No importance to the market value of the asset
True/False
Question Management of working capital refers to the management
of total assets and liabilities of a company.
Correct Answer FALSE
True/False
Question When a company is able to assess an individual's worth,
it helps in increasing its own worth.
Correct Answer TRUE
Multiple Choice Single Answer
Question The Board of Directors should pass a resolution permitting
the buy back upto what percent of the paid up equity capital?
Correct Answer 0.1
Select The Blank
Question Long term cash forecasting is generally for a period of
________ years.
Correct Answer 3 to 5 years
Select The Blank
Question Economies of scale arises with increase in volume of
production leading to________.
Correct Answer Reduction in the cost of production
Multiple Choice Multiple Answer
Question The internal staffing performance indicators are :-
Correct Answer Sales per employee , Recovery rate , Utilization %
Multiple Choice Single Answer
Question The following analysis is more targeted on similar activities
or firms that exist in parallel within the activity model or process flow to ensure
that they are being done the same best way :-
Correct Answer Comparative analysis
Multiple Choice Multiple Answer
Question Accounting numbers are not influenced by :-
Correct Answer Dividend policy , Time span of money , Financial and
business risk
Select The Blank
Question Cost of ________ is more than other sources for raising
short - term finance.
Correct Answer Bank finance
True/False
Question Segment result is segment revenue less segment expenses.
Correct Answer TRUE
Multiple Choice Single Answer
Question The depreciable assets are assets which are expected
to be used :-
Correct Answer During more than 1 accounting period
Multiple Choice Single Answer
Question Research into true human resources accounting began in :-
Correct Answer 1960`s
Select The Blank
Question An asset is included in segment assets, if and only if the
related depreciation or amortisation is included in ________.
Correct Answer Segment expense
Select The Blank
Question A shareholder expects a higher rate of return as a firm's
compensation for ________.
Correct Answer Increased risk
Select The Blank
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Multiple Choice Multiple Answer
Question Implicit claims are non written promises and rights such as :-
Correct Answer Right to provide service to customers , Job security for the
employees
Multiple Choice Single Answer
Question Often a company borrows loans / debts by giving the
following as a security :-
Correct Answer Shares
Match The Following
Question Correct AnsYwoeurr Answer
A highly Shows the illusion of financial problems
leveraged firm
Fiscal advaIsntdaegdeu, ctible from the profit
the interest of financing with debt
Financing Prevents firms from investing too much
with a high percentage of debt
Firms mustDiscussions about the sell out of assets must be made
repay debts
Multiple Choice Single Answer
Question Arbitrage means :-
Correct Answer Securities cannot sell at different prices
True/False
Question Opportunity costs and real costs decrease the market
value of a firm.
Correct Answer TRUE
Select The Blank
Question the commercial paper may be issued in the multiples of ________.
Correct Answer 5 lakhs

Question A normal firm shows the following characteristics :-
Correct Answer No unique optimum payout ratio , Market value per share unaffected by the
payout ratio , All dividend policies are similar
Question One of the bases for determining the residual value of similar assets is :-
Correct Answer Realizable value
Question If a firm diversifies managerial teams formed can be shifted from unproductive
activities to productive ones which leads to :-
Correct Answer Improved profitability , Continuity , Growth of the firm
Question Segment liabilities do not include :-
Correct Answer Borrowings & other liabilities that are incurred for financing rather than
operating purpose
Question As per Pecking order theory, which is the costliest means of funding :-
Correct Answer Equity Shares
Question Cost of ________ is more than other sources for raising short - term finance.
Correct Answer Bank finance
Question Operating economies occur due to indivisibilities of resources like :-
Correct Answer People , Equipment , Overheads
Question If a company has resorted to buyback its shares, it cannot make a further issue of the
same kind of securities within a period of 1 year.
Correct Answer False
Question In value of assets approach for computation of valuation of shares, the total value of
all the assets will be divided by the total number of shares.
Correct Answer True
Question Short term sources of funds include :-
Correct Answer Current Liabilities
Question Investment decisions are mainly concerned with :-
Correct Answer Assets
Question Debt reduces :-
Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders ,
Freedom of decisions
Question The main theories behind share repurchases are :-
Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information
or signalling hypothesis
Question The cost of facilities is usually included & distributed as ________.
Correct Answer Depreciation
Question Investments having no physical existence includes :-
Correct Answer Shares , Debentures , Bonds
Question An investment property is an investment in land or buildings :-
Correct Answer Not intended to be occupied substantially for use by investing enterprise , Not
intended to be in the operations of the investing enterprise
Question If a firm opts for restrictive policy then the investments in current assets is :-
Correct Answer Low
Question According to NOI Approach, any capital structure is optimum.
Correct Answer True
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders
Many groups of non - investor stakeholders have an interest in the firm
Net income approach Cost of debt & equity do not change with a change in leverage ratio
Enormous conflicts of interest between Stakeholders and shareholders
Net operating income approach The overall capitalization rate remains constant for all levels of
financial leverages Firms have preferences by choosing a way to finance their projects
Modigliani - Miller Theory weighted average cost of capital does not change with a change in the
proportion of debt to equity in the capital structure Cost of debt & equity do not change with a
change in leverage ratio
Question The processes to be identified & focused should to be on the basis of not adhering to
benchmarks, bottlenecks, quality not met, time problems etc. This is called as ________.
Correct Answer Process analysis
Question The main characteristics of operating economies are :-
Correct Answer It is achieved through horizontal, vertical and conglomerate mergers , It
occurs due to indivisibilities of resources , It is possible in generic management functions
Question usually the `controlling block' tends to be between :-
Correct Answer 20 & 40 percent
Question The 3 groups of participants in a firm are :-
Correct Answer Suppliers of equity , Debt suppliers , Firm Managers
Question Human Assets accounting stands for :-
Correct Answer Measurement & reporting of the cost and value of people as organisational
resources
Question Profitability of a company depends upon :-
Correct Answer Cost of capital
Question Horizontal mergers involves firms________.
Correct Answer That operate & compete in a similar kind of business
Availability of funds in the market Cost of funds depends on this factor Different costs are
involved
Flexibility The extent & the ease with which the funds can be raised & paid back are very
important The extent & the ease with which the funds can be raised & paid back are very
important
Time Takes less time to take an overdraft from the bank Takes less time to take an overdraft from
the bank
Creditworthiness of the issuerIf a company has a good creditworthiness it is not difficult to raise
short term funds If a company has a good creditworthiness it is not difficult to raise short term
funds
Question A firm's current assets include :-
Correct Answer Marketable securities , Receivables , Inventory
Question If a segment is not designated as a ________ it should be included as an unallocated
reconciling item.
Correct Answer Reportable segment
Question An asset is included in segment assets, if and only if the related depreciation or
amortisation is included in ________.
Correct Answer Segment expense
Question Trade credit creates book debts which the firm is expected to collect in the near
future.
Correct Answer True
Question Long term financing strategy is used by a firm to meet :-
Correct Answer Fixed assets requirements , Permanent working capital requirements , Portion
of fluctuating working capital requirement
Question Debt is often issued at :-
Correct Answer The head office level
Question Determination of residual value of an asset is normally a difficult matter.
Correct Answer True
Question Which of the following systems identifies each of the organizational elements of the
traditional bureaucratic structure and applies the identifiable costs of that element accordingly?
Correct Answer Organization element accounting
Question Segment result represents :-
Correct Answer Operating profit or loss
Question Which of the following is NOT a disadvantage of deferred payment plan to the
acquiring firm?
Correct Answer There is built - in cushion to the acquiring firm as total payment is not made at
the time of acquisition
Question The resource theory considers that the competitive position of a firm depends on its
________ Assets.
Correct Answer Specific
Question Short term financing is meant for funding working capital of a company.
Correct Answer True
Question Money becomes less valuable when received at a latter stage instead of in present
time.
Correct Answer True
Question The intellectual assets of a company are often worth 3 or 4 times the tangible book
value.
Correct Answer True
Question One of the selective developments that has taken place in recent times is companies
are going in for :-
Correct Answer Activity based costing and management
Question The financial managers of a company consume a great deal of their time in activities
like :-
Correct Answer Monitoring the investment in inventories , Negotiating favourable credit terms
, Administrating Accounts receivables
Question If total external revenue attributable to reportable segments constitutes less than
________ of the total enterprise revenue additional segments should be identified as reportable
segments.
Correct Answer 75 percent
Question A single organisation model serves to keep all individual initiatives to be targeted into
a co-ordinated plan.
Correct Answer True
Question Valuation of current investments on overall basis is not considered appropriate.
Correct Answer True

Multiple Choice Multiple Answer
Question The support elements consists of important functions
such as :-
Correct Answer Accounting , Automatic data processing , Payroll
Your Answer Payroll , Co-ordination , Accounting
Multiple Choice Single Answer
Question The value of the asset does not include:-
Correct Answer Price per share
Your Answer Price per share
Multiple Choice Single Answer
Question The bottom line of ABC Process is :-
Correct Answer To achieve a better method of doing the right business
pf the organisation
Your Answer To achieve a better method of doing the right business
pf the organisation
Multiple Choice Single Answer
Question When the working capital is less than its peak level :-
Correct Answer The surplus is invested in liquid assets
Your Answer The surplus is invested in liquid assets
True/False
Question Articles of association should authorise buy back of
securities as per the Company's Act.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question During Share repurchase, it is necessary to transfer
certain sum to :-
Correct Answer Capital redemption reserve Account
Your Answer Capital redemption reserve Account
Multiple Choice Single Answer
Question Comparative analysis is :-
Correct Answer A review to ensure consistency within the activity
model & process flow
Your Answer A review to ensure consistency within the activity
model & process flow
Multiple Choice Multiple Answer
Question Exit costs are classified into 3 categories namely :-
Correct Answer Lost efficiency prior to separation , Job vacancy cost
during the new search , Termination pay
Your Answer Lost efficiency prior to separation , Job vacancy cost
during the new search , Termination pay
Multiple Choice Multiple Answer
Question As a general rule, an asset is :-
Correct Answer A good or a right that a firm owns in a determined
moment , Prepayment adjustments , Capitalized
expenses
Your Answer A good or a right that a firm owns in a determined
moment , Prepayment adjustments , Capitalized
expenses
Select The Blank
Question During the costing process, we look at ________.
Correct Answer Resource consumption
Your Answer Resource consumption
Select The Blank
Question Credit standards should be relaxed upon the point
where incremental returns ________ incremental
costs.
Correct Answer Equals
Your Answer Equals
True/False
Question Usually cost data is perfect for ABC Analysis &
distribution.
Correct Answer False
Your Answer False
True/False
Question An activity model is a tool to assist in understanding &
defining the organisation.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The acquiring firm for any M & A will require data
about the target firm which will include :-
Correct Answer Quality of management , Production capabilities ,
Profitability
Your Answer Production capabilities , Capital & labour intensity ,
Profitability
Select The Blank
Question ________ is not a example of segment liability.
Correct Answer Goodwill
Your Answer Goodwill
Multiple Choice Single Answer
Question The value based approach of HRA Tracking suggests
that the value of human resources depends upon :-
Correct Answer Capacity to generate revenue
Your Answer Opportunity cost
Select The Blank
Question ________ are considered most desirable from
shareholders point of view.
Correct Answer Dividends
Your Answer Dividends
Multiple Choice Multiple Answer
Question Shareholders returns consists of 2 components :-
Correct Answer Dividend , Capital gains
Your Answer Capital gains , Dividend
Multiple Choice Single Answer
Question In the book building method, the company makes an
offer to buy back :-
Correct Answer Its specified number of shares at a specified offer
price range
Your Answer Its specified number of shares at a specified offer
price range
Multiple Choice Multiple Answer
Question A company is permitted to buy back its shares through
stock exchange in the following situations :-
Correct Answer The company shall complete the verification of
acceptances within 15 days of the payout , The
identity of the company as a purchaser shall appear
on the electronic screen when the order is placed ,
The buy back shall be made only on stock exchanges
with electronic trading facility
Your Answer The company shall complete the verification of
acceptances within 15 days of the payout , The
identity of the company as a purchaser shall appear
on the electronic screen when the order is placed ,
The buy back shall be made only on stock exchanges
with electronic trading facility
Multiple Choice Single Answer
Question Research into true human resources accounting
began in :-
Correct Answer 1960`s
Your Answer 1960`s
Select The Blank
Question If firms have same technology ________ makes the
difference i.e. firms become more productive .
Correct Answer Solid human resource team
Your Answer Latest & updated techniques
True/False
Question It is necessary to identify all costs that may be related
to an acquisition.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question It is the activity accountant's job to do the following for
the existing organisational structure :-
Correct Answer To define the costs , To refine the costs , To
document the costs
Your Answer To define the costs , To document the costs , Support
the costing of the activities
Multiple Choice Multiple Answer
Question Debt reduces :-
Correct Answer Agency cost of free cash flow , Commitment to pay in
time to all lenders , Freedom of decisions
Your Answer Agency cost of free cash flow , Commitment to pay in
time to all lenders , Freedom of decisions
Select The Blank
Question Stock repurchases ________ the debt / equity ratio.
Correct Answer Increases
Your Answer Increases
Select The Blank
Question If total external revenue attributable to reportable
segments constitutes less than ________ of the total
enterprise revenue additional segments should be
identified as reportable segments.
Correct Answer 75 percent
Your Answer 75 percent
Multiple Choice Multiple Answer
Question A current investment is an investment that is by nature
:-
Correct Answer Readily realisable , Intended to be held for not more
than 1year from the date on which investment is made
Your Answer Readily realisable , Intended to be held for not more
than 1year from the date on which investment is made
, Not similar to current assets
Select The Blank
Question If the segment result of a segment includes interest or
dividend income its segment assets will not include
________.
Correct Answer Payables
Your Answer Related receivables
Multiple Choice Single Answer
Question What is the maximum amount involved in the buy
back of the total paid up capital & free reserves of the
company?
Correct Answer 0.25
Your Answer 0.25
Select The Blank
Question Economies of scale arises with increase in volume of
production leading to________.
Correct Answer Reduction in the cost of production
Your Answer Reduction in the cost of production
Multiple Choice Multiple Answer
Question The 3 groups of participants in a firm are :-
Correct Answer Suppliers of equity , Debt suppliers , Firm Managers
Your Answer Suppliers of equity , Debt suppliers , Firm Managers
Multiple Choice Multiple Answer
Question The important aspect of dividend policy is :-
Correct Answer To determine the amount of earnings to be distributed
to shareholders , Amount to be retained in the firm
Your Answer To determine the amount of earnings to be distributed
to shareholders , Amount to be retained in the firm
True/False
Question Baumul`s Model is similar to EOQ model in inventory
management.
Correct Answer True
Your Answer True
True/False
Question To `gather costs', means capturing all relevant
expenses that pertain to the selected model and
processes.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question When the seller asks for the payment beforemaking
the delivery in order to avoid all risks it is known as :-
Correct Answer Cash before delivery
Your Answer Cash before delivery
True/False
Question When a company is able to assess an individual's
worth, it helps in increasing its own worth.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The depreciation rates or the useful lives of the assets
are disclosed only :-
Correct Answer If they are different from the principle rates specified in
the statute
Your Answer If they are different from the principle rates specified in
the statute
Select The Blank
Question Depreciation is ________ of an asset.
Correct Answer Loss of value
Your Answer Loss of value
Multiple Choice Single Answer
Question usually the `controlling block' tends to be between :-
Correct Answer 20 & 40 percent
Your Answer 20 & 40 percent
True/False
Question Money becomes less valuable when received at a
latter stage instead of in present time.
Correct Answer True
Your Answer False
True/False
Question Diversification helps in preserving a firm's reputation &
goodwill.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Decrease in leverage results in increasing the :-
Correct Answer Overall cost of capital
Your Answer Overall cost of capital
Multiple Choice Multiple Answer
Question The limitations of value of assets approach include :-
Correct Answer Book value of the assets is directly dependent on the
accounting policies followed by the company , There
are no standard procedures for valuation of intangible
assets , No importance to the market value of the
asset
Your Answer Book value of the assets is directly dependent on the
accounting policies followed by the company , There
are no standard procedures for valuation of intangible
assets , No importance to the market value of the
asset
True/False
Question The chance of bankruptcy is small when the leverage
of a firm is small.
Correct Answer True
Your Answer False

True/False
Question It is easy to find a risk free security.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question As per the study conducted by RBI, Current assets
constitute :-
Correct Answer More than 50 % of the total assets
Your Answer More than 50 % of the total assets
Multiple Choice Multiple Answer
Question The following categories of personnel are taken into
account to calculate the actual manpower strength :-
Correct Answer Full time equivalents , Temporary staff , Part time
personnel
Your Answer Full time equivalents , Temporary staff , Part time
personnel
Select The Blank
Question Business risk & financial risk do not have any
influence on ________.
Correct Answer Accounting numbers
Your Answer Accounting numbers
Multiple Choice Multiple Answer
Question The characteristics of working capital are :-
Correct Answer It is continually required for a going concern ,
Quantum of working capital fluctuates depending on
the level of activity , It is impacted by numerous
transactions on a continuous basis
Your Answer It is continually required for a going concern ,
Quantum of working capital fluctuates depending on
the level of activity , It is impacted by numerous
transactions on a continuous basis
Multiple Choice Single Answer
Question Profitability of a company depends upon :-
Correct Answer Cost of capital
Your Answer Cost of capital
Multiple Choice Multiple Answer
Question If a firm diversifies managerial teams formed can be
shifted from unproductive activities to productive ones
which leads to :-
Correct Answer Improved profitability , Continuity , Growth of the firm
Your Answer Improved profitability , Growth of the firm
Select The Blank
Question Conglomerate mergers are also called ________.
Correct Answer Concentric mergers
Your Answer Concentric mergers
True/False
Question The buyback shall be made only on stock exchanges
with electronic trading facility.
Correct Answer True
Your Answer True
True/False
Question Appraisal value of a firm can be acquired from an
independent appraisal agency.
Correct Answer True
Your Answer True
True/False
Question firms use credit policy as a marketing tool for
expanding sales.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Tender offers are used primarily for :-
Correct Answer Large Equity repurchases
Your Answer Large Equity repurchases
Multiple Choice Single Answer
Question Which is an example out of the following to which
special consideration apply for depreciation :-
Correct Answer Regenerative natural resources
Your Answer Regenerative natural resources
Multiple Choice Single Answer
Question Which of the following is NOT A Characteristic of
declining firm :-
Correct Answer The optimum payout ratio for a declining firm is not
100 %
Your Answer The optimum payout ratio for a declining firm is not
100 %
Multiple Choice Single Answer
Question According to Net Income Approach, the average cost
of capital declines as the leverage ratio :-
Correct Answer Increases
Your Answer Increases
Multiple Choice Multiple Answer
Question Personnel services expenses is made up of:-
Correct Answer Personnel salaries , Cost of facilities , Training &
development budgets
Your Answer Personnel salaries , Cost of facilities , Training &
development budgets
Multiple Choice Multiple Answer
Question The employer in offering the job contract assumes a
range of legal obligations such as :-
Correct Answer Rewards - cash like & non cash like , Health & safety
policies , Pensions & contributions to social security
payments
Your Answer Rewards - cash like & non cash like , Health & safety
policies , Pensions & contributions to social security
payments
Select The Blank
Question Mature companies with stable earnings generally pay
out ________.
Correct Answer A high proportion of earnings
Your Answer A high proportion of earnings
Multiple Choice Single Answer
Question Segment result represents :-
Correct Answer Operating profit or loss
Your Answer Net of financing profit or loss
Multiple Choice Single Answer
Question Best practices, a tool for review process is similar to :-
Correct Answer Bench marking
Your Answer Bench marking
True/False
Question Making decision on dividend is a very crucial area of
financial management for a firm.
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Mechanisms Performs or provides
energy to an activity
Performs or provides
energy to an activity
Inputs Information or material
used to produce the
output of an activity
Information or material
used to produce the
output of an activity
Controls Information or material
that constrains an
activity
Information or material
that constrains an
activity
Outputs Information or material
produced by an activity
Information or material
produced by an activity
True/False
Question According to NI Approach, decrease in leverage
decreases the overall cost of capital and increases the
firm's value.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Lien The bank has a right to
retain the goods
belonging to the
company until the
debts due to the bank
are paid
The bank has a right to
retain the goods
belonging to the
company until the debts
due to the bank are
paid
Hypothecation A charge against
property for an amount
of debt
A charge against
property for an amount
of debt
Pledge Duty of the bank to
take care of movable
goods
Duty of the bank to take
care of movable goods
Mortgage Pertains to immovable
properties
Pertains to immovable
properties
Multiple Choice Single Answer
Question Investment decisions are mainly concerned with :-
Correct Answer Assets
Your Answer Assets
Multiple Choice Multiple Answer
Question A normal firm shows the following characteristics :-
Correct Answer No unique optimum payout ratio , Market value per
share unaffected by the payout ratio , All dividend
policies are similar
Your Answer No unique optimum payout ratio , Market value per
share unaffected by the payout ratio , All dividend
policies are similar
Select The Blank
Question Buy back through book building the process should be
made through ________.
Correct Answer An electronically linked transparent facility
Your Answer An electronically linked transparent facility
Multiple Choice Multiple Answer
Question The internal staffing performance indicators are :-
Correct Answer Sales per employee , Recovery rate , Utilization %
Your Answer Sales per employee , Recovery rate , Utilization %
Multiple Choice Multiple Answer
Question The 3 main types of accounting records followed by
an organisation are :-
Correct Answer Organisational accounting , Budgetary accounting ,
Cost accounting
Your Answer Organisational accounting , Budgetary accounting ,
Cost accounting
Select The Blank
Question An asset is included in segment assets, if and only if
the related depreciation or amortisation is included in
________.
Correct Answer Segment expense
Your Answer Segment expense
Select The Blank
Question A company shall buyback its shares through the stock
exchange by making a public announcement at least
________ days prior to the commencement of
buyback.
Correct Answer Seven
Your Answer Seven
Multiple Choice Single Answer
Question Which of the following systems identifies each of the
organizational elements of the traditional bureaucratic
structure and applies the identifiable costs of that
element accordingly?
Correct Answer Organization element accounting
Your Answer Organization element accounting
Multiple Choice Single Answer
Question Short term sources of funds include :-
Correct Answer Current Liabilities
Your Answer Current Liabilities
True/False
Question Tender offers us an alternative approach to acquire
another firm.
Correct Answer True
Your Answer True
Select The Blank
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Your Answer Directly attributable to the segment
True/False
Question Management of working capital refers to the
management of total assets and liabilities of a
company.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question If a company is following multiple accounting system,
the activity accountant will have to match data across
:-
Correct Answer Codes , Time periods , Systems
Your Answer Codes , Time periods , Systems
Multiple Choice Single Answer
Question If competition is weak, a firm :-
Correct Answer Can manage with a smaller inventory of finished
goods
Your Answer Can manage with a smaller inventory of finished
goods
Select The Blank
Question When a firm invests in human resources by
acquisition & training, it anticipates a ________
Correct Answer Future generation of profits & services
Your Answer Future generation of profits & services
Select The Blank
Question Horizontal mergers involves firms________.
Correct Answer That operate & compete in a similar kind of business
Your Answer That operate & compete in a similar kind of business
Multiple Choice Single Answer
Question The following of total cost of assets over its useful life
is called depreciation :-
Correct Answer Distribution
Your Answer Distribution
Multiple Choice Multiple Answer
Question The different types of floats are :-
Correct Answer Postal float , Deposit float , Bank float
Your Answer Postal float , Deposit float , Bank float
Select The Blank
Question Segment expense includes ________.
Correct Answer The relevant portion of enterprise revenue that can be
allocated on a reasonable basis to a segment
Your Answer The relevant portion of enterprise revenue that can be
allocated on a reasonable basis to a segment
Multiple Choice Multiple Answer
Question Due to diversification employees seek:-
Correct Answer Job security , Better opportunities within the firm ,
Higher compensation
Your Answer Job security , Better opportunities within the firm ,
Higher compensation
True/False
Question Short term financing is meant for funding working
capital of a company.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Deferred payment plan is also known as:-
Correct Answer Earn out plan
Your Answer Earn out plan
Multiple Choice Single Answer
Question Estimation for determining the useful life of an asset is
required :-
Correct Answer On some reasonable basis
Your Answer On some reasonable basis

Multiple Choice Single Answer
Question The Buy back of shares shall not be made from
Correct Answer The promoters or persons in control of the company
Your Answer The promoters or persons in control of the company
Multiple Choice Multiple Answer
Question Operating economies of scale are achieved through
the following mergers :-
Correct Answer Horizontal , Vertical , Conglomerate
Your Answer Vertical , Conglomerate , Horizontal
Multiple Choice Single Answer
Question Free Reserves is a component of :-
Correct Answer Equity
Your Answer Market Capitalization
Select The Blank
Question Capital gains are taxed at ________.
Correct Answer Preferentially lower rate
Your Answer Preferentially lower rate
Select The Blank
Question Forward or backward integration is a characteristic of
________.
Correct Answer Vertical Mergers
Your Answer Vertical Mergers
True/False
Question Valuation of current investments on overall basis is
not considered appropriate.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The main categories of organisational elements are :-
Correct Answer Managerial , Support , Operational
Your Answer Managerial , Support , Operational
Multiple Choice Single Answer
Question A firm can manage with small inventory if the supply is
:-
Correct Answer Prompt & adequate
Your Answer Prompt & adequate
Multiple Choice Multiple Answer
Question Accounting standard 19 for leases statement is
applied in accounting for all leases other than :-
Correct Answer Lease agreements to explore for or use natural
resources , Licensing agreements for items such as
motion picture films , Lease agreements to use land
Your Answer Lease agreements to explore for or use natural
resources , Licensing agreements for items such as
motion picture films , Lease agreements to use land
Multiple Choice Single Answer
Question Equity includes :-
Correct Answer Development Rebate Reserve
Your Answer Deferred Payment Liabilities
Select The Blank
Question ________ is not a example of segment asset.
Correct Answer Customer advances
Your Answer Customer advances
Multiple Choice Single Answer
Question Book value is relevant to determine the firm's value
because of the following reasons except:-
Correct Answer It cannot be used as a starting point to be compared &
complimented by other analysis
Your Answer It cannot be used as a starting point to be compared &
complimented by other analysis
Multiple Choice Single Answer
Question As per Pecking order theory, which is the costliest
means of funding :-
Correct Answer Equity Shares
Your Answer Equity Shares
Multiple Choice Single Answer
Question Many companies claim their main assets are their :-
Correct Answer People
Your Answer People
Multiple Choice Multiple Answer
Question The net income approach is based on following 3
assumptions :-
Correct Answer There are no taxes , Cost of debt is less than equity
capitalization rate , Use of debt doesn't change the
risk perception of investors
Your Answer There are no taxes , Cost of debt is less than equity
capitalization rate , Use of debt doesn't change the
risk perception of investors
True/False
Question Receivables constitutes a substantial portion of
current assets of several firms.
Correct Answer True
Your Answer True
True/False
Question Decisions related to working capital are repetitive &
frequent.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question One of the important assumptions for capital structure
theories is :-
Correct Answer Debt and equity are the 2 kinds of funds used by the
firm
Your Answer Debt and equity are the 2 kinds of funds used by the
firm
Select The Blank
Question Liquidation value is also known as ________.
Correct Answer Realizable value
Your Answer Net replacement value of the assets
True/False
Question It is possible to place a single value for the acquired
firm.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Implicit claims are non written promises and rights
such as :-
Correct Answer Right to provide service to customers , Job security for
the employees
Your Answer Right to provide service to customers , Job security for
the employees , Commitment to pay interest in time
for debentures issued
Select The Blank
Question According to Altman (1984) total costs in percentage
of the market value of a firm range between ________
Correct Answer 12.1 % & 16.7 %
Your Answer 5 % & 15 %
Match The Following
Question Correct Answer Your Answer
Availability of funds in
the market
Cost of funds depends
on this factor
Cost of funds depends
on this factor
Flexibility The extent & the ease
with which the funds
can be raised & paid
back are very
important
The extent & the ease
with which the funds
can be raised & paid
back are very important
Time Takes less time to take
an overdraft from the
bank
Takes less time to take
an overdraft from the
bank
Creditworthiness of the If a company has a If a company has a
issuer good creditworthiness
it is not difficult to raise
short term funds
good creditworthiness it
is not difficult to raise
short term funds
Multiple Choice Multiple Answer
Question A firm with a judicious mixture of debt and equity will
have :-
Correct Answer Lowest cost of capital , High value of firm , Good
market reputation
Your Answer Lowest cost of capital , High value of firm , Good
market reputation
Select The Blank
Question Implicit & Explicit costs are included in the ________.
Correct Answer Price of a product
Your Answer Price of a product
Match The Following
Question Correct Answer Your Answer
Diversification Growth through the
combination of firms in
unrelated fields of
business
Growth through the
combination of firms in
unrelated fields of
business
Horizontal mergers 2 Firms operate &
compete in a similar
kind of business
Combined firm is more
valuable than the sum
of individual firms
Vertical mergers Firms in different
stages of production
Firms in different
stages of production
Conglomerate mergers Different or unrelated
business activity
Different or unrelated
business activity
Multiple Choice Multiple Answer
Question The main characteristics of operating economies are :-
Correct Answer It is achieved through horizontal, vertical and
conglomerate mergers , It occurs due to indivisibilities
of resources , It is possible in generic management
functions
Your Answer It is achieved through horizontal, vertical and
conglomerate mergers , It occurs due to indivisibilities
of resources , It is possible in generic management
functions
Multiple Choice Single Answer
Question The following analysis is more targeted on similar
activities or firms that exist in parallel within the activity
model or process flow to ensure that they are being
done the same best way :-
Correct Answer Comparative analysis
Your Answer Comparative analysis
Multiple Choice Multiple Answer
Question Every business requires funds on a continual basis for
expenses incurred on for :-
Correct Answer Purchase of raw material , Manufacturing costs ,
Administration
Your Answer Purchase of raw material , Manufacturing costs ,
Administration
True/False
Question There are few methods of allocating depreciation over
the useful life of an assets.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question For paying dividends, firms will have a given amount
of :-
Correct Answer Cash available
Your Answer Cash available
Multiple Choice Multiple Answer
Question Financial evaluation involves :-
Correct Answer Determining the earnings , Areas of risk , Best way to
finance a merger
Your Answer Determining the earnings , Areas of risk , Best way to
finance a merger
True/False
Question A single organisation model serves to keep all
individual initiatives to be targeted into a co-ordinated
plan.
Correct Answer True
Your Answer True
True/False
Question The objective of a dividend policy should be to
maximize shareholder's return so that the value of his
investment is maximized.
Correct Answer False
Your Answer True
Select The Blank
Question HLL is ________ % of subsidiary of Unilever PLC.
Correct Answer 0.516
Your Answer 0.5
Multiple Choice Single Answer
Question In a matching approach policy, :-
Correct Answer There is a small risk if shortage of funds
Your Answer There is a small risk if shortage of funds
Select The Blank
Question In case of direct placement of commercial papers it
may be issued for maturities ________ from the date
of issue.
Correct Answer Between 15 days to 1 year
Your Answer Between 15 days to 1 year
Select The Blank
Question ________ is not a characteristic of financial
conglomerates.
Correct Answer Provide ineffective competitive process
Your Answer Provide ineffective competitive process
Multiple Choice Single Answer
Question Controlling block is usually acquired from:-
Correct Answer A single seller
Your Answer A single seller
Multiple Choice Multiple Answer
Question A firm using a conservative policy for determining the
requirements of current assets :-
Correct Answer Has fewer production stoppages , Ensures quick
deliveries to customers , Stimulates sales
Your Answer Has fewer production stoppages , Ensures quick
deliveries to customers , Stimulates sales
True/False
Question Only firms with a large amount of financial slack can
afford tender offers.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Changes in the investee`s equity includes those :-
Correct Answer Arising from the revaluation of fixed assets , From
foreign exchange translation differences , From the
adjustment of differences arising on amalgamation
Your Answer Arising from the revaluation of fixed assets , From
foreign exchange translation differences , From the
adjustment of differences arising on amalgamation
True/False
Question Value based approach of HRA tracking can be divided
into 2 categories - Non - monetary & monetary.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Depreciation includes amortization of assets whose
useful life is :-
Correct Answer Predetermined
Your Answer Predetermined
True/False
Question Human assets accounting is still to become an
accepted trend in the industry.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Value implies that something has :-
Correct Answer Worth
Your Answer Worth
Multiple Choice Multiple Answer
Question Long term financing strategy is used by a firm to meet
:-
Correct Answer Fixed assets requirements , Permanent working
capital requirements , Portion of fluctuating working
capital requirement
Your Answer Fixed assets requirements , Permanent working
capital requirements , Portion of fluctuating working
capital requirement

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