BC0044 Accounting and Financial Management

Question[1-40] Part A [Each 1 mark] Question[41-60] Part B [Each 2 marks] Question[61-75] Part C [Each 4 marks]

1) Popular Financial Accounting Software Packages are : a) Tally, Ex b) WinCa and DacEasy c) Both a & b d) None of the above 2) Press _________ that would active the calculator a) Ctrl+ N b) F1 c) Alt + Del d) F11 3) Tally screen can be divided into _________ broad parts a) Two b) Three c) Four d) Six 4) The work area at gateway is broadly separated into ________ a) Two sections b) Three sections c) Five sections d) Eight sections 5) Tally provides an option to maintain a) Accounts only b) Inventory only c) Account cum Inventory d) All of the above 6) On pressing ________ : configure at gateway will show a figure, which allows to set configuration option a) F10 b) F11 c) F12 d) F1

7) __________ at the voucher entry screen to enter a contra voucher a) Press F11 b) Press F4 c) Press F12 d) Press F10 8) To delete a voucher type, select it in alteration mode and press a) <Alt> + <D> b) <Del> + <F10> c) <2> d) <Ctrl> + <A> 9) ______________ provides link between two transaction documents a) Batch numbers b) Godowns c) Tracking Numbers d) Unit of measure 10) You can print receipt vouchers by pressing a) <Alt> + <P> b) <Ctrl> + <P> c) <Ctrl> + C d) None of the above 11) A purchase voucher can be entered by pressing the function key a) F2 b) F4 c) F7 d) F9 12) The scope and functions of Financial Management is divided into _________categories: a) Two b) Three c) Four d) Six 13) The term ________ was used in place of the present term Financial Management a) Finance b) Corporation Finance c) Company finance d) None of the above 14) The wealth maximization is also called a) Profitability b) Profit c) Value maximization

d) Both A & B 15) __________ leverage occurs when fixed cost funds such as debt or preference capital is employed by the company a) b) c) d) Financial Leverage Operational Leverage Combined Leverage None of the above

16) Permanent working capital is also called a) Core current assets b) Hard core of the capital c) Both a & b d) Net working capital 17) The term inventories includes a) Stock of raw materials b) Work in progress c) Finished goods d) All of the above 18) Loan obtained without any hypothecation of asset ______________ a) Secured loan b) Unsecured loan c) Long term loan d) Short term loan 19) The accounting is the language of _________ a) Economics b) Business c) Computer d) Commerce 20) The date on which the bill becomes payable is called ___________ a) Grace date b) Due date c) Last date d) Least date 21) Excess of income over expenditure is _________a) Gross loss b) Net loss c) Gross profit d) Profit 22) E.P.S. means a) Equity per scheme

b) Earning per share c) Equity per share d) Even prudential share 23) An out flow of economic benefit or depletion of assets or increase / creation of liabilities resulting in decrease in equity __________a) Expenses b) Assets c) Income d) Liability 24) Amount created for unforeseen events in future _________ a) Provision b) Reserve c) Fund d) Gross profit 25) A happening of consequence to an entity is _____________ a) Situation b) Circumstances c) Event d) Problem 26) The residual interest of owners in assets over liabilities a) Profit b) Income c) Equity d) Loss 27) The suffix of b/d denotes _____________ a) Brought down b) Bought up c) Budget down d) None of the above 28) __________ is the backbone of the business a) Finance b) Profit c) Risk d) None of the above 29) ___________ is the mix of different sources of long term funds such debt, preference capital and equity capital in the total capitalization of a company a) Capital rationing b) Capital structure c) Capital system d) Cost of capital

30) According to ___________ theory the market value of the firm is not affected by the capital a) Net income approach b) Net operating income approach c) Traditional approach d) Modigliani Millar approach 31) The sum total of all current assets of the enterprise employed in the business process _________ a) Long term capital b) Permanent capital c) Fixed capital d) Gross working capital 32) The pattern of total financing employed by a firm is _________ a) Capital mixing b) Capital rationing c) Capital allocation d) Financial structure 33) According to ___________ the term financial management provides a conceptual and analytical framework for financial decision making . a) Traditional approach b) Modern approach c) Working capital concept d) Cost of capital 34) Who suggest the net income approach a) Peter F Drucker b) Modigliani Millar c) Chris Bernard d) David Durand 35) The employment of an asset of funds for which the pays a fixed cost or fixed return ____ a) Cost of equity b) Dividend c) Leverage d) Buy out ratio 36) The joining of two or more companies involved in different stages of the production or distribution of the same product or service is a) Horizontal merger b) Vertical merger c) Circular merger d) None of the above 37) The value of money changes over a period of time means ____________

a) Value of money measured in relation to time b) Time has money value c) Money has time value d) Time and money are tangible assets 38) Money has __________ a) Time value b) No time value c) Earning capacity d) Both A & C 39) ___________ is an instrument of long term debt issued by a borrower a) A bond b) A debenture c) Both a & b d) None of the above 40) There are ________ major theories explaining the relationship between capital & valuation of the firm. a) Two b) Three c) Four d) Five 41) The different elements of balance sheet are _______________ a) Assets, Liabilities and prepaid expenses b) Debtors, creditors & capital c) Assets, liabilities & equity d) Debtors, closing stock & creditors 42) The credit balance in the bank column of the ________ means _________ a) Cash book, overdraft b) Bank book, cash in hand c) Cash book, cash at bank d) Pass book, overdraft 43) Purchases of furniture worth Rs. 5,000. Two elements are _________ a) Furniture and cash b) Cash and furniture c) Purchases and cash d) Assets and purchase 44) Debit ________ credit _________ a) What comes in, what goes out b) Giver, receiver c) Receipts, payments d) Income, and expenses, gains & losses

45) Investments are shown and expressed as __________ and ___________ in the balance sheets. a) Short term, long term investment b) Quoted, unquoted investment c) Registered, unregistered investments d) Fixed and variable investment 46) The term debit is derived from the _________ word _________ meaning owed to me. a) Latin, debare b) Latin, debeo c) French, debit d) French, debare 47) Paid salary Rs. 500 for this journal entry will be _________ a) Cash A/c Dr 500 To salary a/c 500 b) Salary A/c To cash a/c Dr 500 500 500 500 500

c) Bank A/c Dr To Bank a/c

d) Employers A/c Dr 500 To Cash a/c

48) Liquidity is ascertained on the basis of _____________ a) Forecasting cash flows b) Raising funds c) Managing the flow of internal funds d) e) f) g) 1 & 3 only 1 only 2 2 and 3 only All of the above

49) Different types of mergers are __________ a) Absorption, Amalgamation, Acquisition and takeover b) Absorption, Amalgamation, Acquisition and Liquidation c) Takeover, Amalgamation, Acquisition and liquidation d) Absorption, Amalgamation, Demergers and Liquidation 50) Features of an appropriate capital structure are __________ a) Profitability, conservatism, profitability and control b) Profitability, solvency, flexibility, conservatism and control c) Profitability, solvency, consistency and conservation

d) Profitability, flexibility, consistency and control A firm sells its product for Rs. 100/- per unit . The variable cost is Rs. 60/- per unit and fixed cost is Rs. 30,000 51) What is the operating profit when the firm sells 1,000 units? a) Rs. 10,000 b) Rs. 5,000 c) Rs. 15,000 d) Rs. 20,000 52) What is the operating leverage when the firm sells 1,000 units ? a) 5 b) 6 c) 8 d) 4 53) A company issues 3 years debentures of Rs. 100 at 13% coupon rate with no flotation cost. Hence the BTCD is equal to _________ a) 13% b) 15% c) 30% d) 10% 54) What is the present value of an annuity of Rs. 5,000 over 3 years when discounted at 5%? a) 12,865 b) 14,685 c) 13,685 d) 14,976 55) The total of processing time + inspection time + conveyance time + waiting time equal to __________ a) Lead time b) Production time c) Throughput time d) None of the above 56) All inflow of money are recorded through __________ a) Receipt voucher b) Payment voucher c) Cash voucher d) Journal proper 57) __________ is an offer for sale to the prospective buyer quoting sellers price, terms and conditions and delivery schedule a) Order b) Quotation c) Invoice

d) Receipt 58) Memo vouchers are entered by pressing the function key ___________ a) F11 b) F9 c) F10 d) F7 59) Which type of voucher you pass for entering the purchase of fixed assets by making a cheques payment? a) Receipt voucher b) Payment voucher c) Cash voucher d) Memo voucher 60) Which type of voucher is used to make the entry of transactions related to the suspense payment? a) Receipt voucher b) Payment voucher c) Cash voucher d) Memo voucher 61) Match the following and select the right combination Set I Set II 1. F8 i. Sales Voucher 2. F7 ii. Journal voucher 3. F10 iii. Memo voucher (a) 1-ii, 2-i, 3-iii (b) 1-i, 2- iii, 3-ii (c) 1-i, 2- ii, 3-iii (d) 1-iii, 2- ii, 3-i 62) Match the following and select the right combination Set I Set II 1. Physical stock voucher i. Alt + F7 2. Stock journal ii. Alt + F1 3. To display vouchers in detail iii. Alt + F7 (a) 1-i, 2- iii, 3-ii (b) 1-iii, 2-i, 3-ii (c) 1-i, 2- ii, 3-iii (d) 1-iii, 2- ii, 3-i 63) 1. To view the detailed balance sheet , press Alt + F11 2. To display the balance sheet for particular period, press F1 3. F9 button facilitates to get inventory reports quickly without leaving the current screen

(a) (b) (c) (d)

1-True, 2- True, 3-True 1-False, 2-False, 3-True 1-False, 2-True, 3-True 1-True, 2-False, 3-True

64) 1. To specify the balance sheet titling, press Alt + C 2. To select the printer name, paper type, orientation of printing etc. , press Alt + D 3. To change the method of calculating the closing value (FIFO, LIFO etc), Press F5 (a) 1-True, 2- False, 3-True (b) 1-False, 2-True, 3-True (c) 1-True, 2-True, 3-True (d) 1-True, 2-True, 3-False Q. No. 65-66 ABC has an EBIT of Rs. 6,00,000 at 5,000 level of production. The company has 5,00,000 equity shares of Rs. 10 each 15% debentures of Rs. 5,00,000 and 10% preference capital of Rs. 5,00,000 65) What is the earnings available to equity shareholders? (a) Rs. 5,25,000 (b) Rs. 2,62,500 (c) 2,21,500 (d) None of the above 66) What is the degree of financial leverage ? (a) 2.1 (b) 1.41 (c) 1.73 (d) None of the above 67) On 1st May 2002 a drew a 3 months bill on B for Rs. 800 after acceptance the bill was endorsed over to C. The bill was dishonored on the due date. The bill was taken up by A. Journal entry in the books of A for the receipt of bill will be : a) Bills Receivable A/c To Bs a/c b) Bills Receivable A/c To Cs a/c c) Bs A/c To Bills receivable a/c d) Bills receivable a/c To Cash A/c Dr Dr Dr Dr. 800 800 800 800 800 800 800 800

68) On 1st May 2003 A drew a 3 months bill on B for Rs. 200 and the latter accepted the

bill on the due date. The bill was dishonored Journal entry in the books of A for the receipt of bill will be : a) Bills Receivable A/c To Bs a/c b) Bills Receivable A/c To As a/c Dr Dr 200 200 200 200 200 200 200 200

c) Bs A/c Dr To Bills receivable a/c d) Bills receivable a/c To Cash A/c Dr.

69) On 1st May 2003 A drew a 3 months bill on B for Rs. 200 and the latter accepted the bill on the due date. The bill was dishonored Journal entry in the books of B for the acceptance of bill will be : a) Bills Receivable A/c To As a/c b) Cash A/c To As a/c c) As A/c To Bills payable a/c d) Bills payable a/c To As A/c Dr Dr Dr Dr. 200 200 200 200 200 200 200 200

The following is the information relating to the Acquiring company (A) and the target company (T) A T Earning after tax (EAT) Rs. 50,00,000 10,00,000 Number of shares 5,00,000 2,00,000 Earning per share (Rs.) 10 5 P/E ratio 15 10 Market price per share (Rs.) 150 50 Based on the evaluation of T, A has agreed to offer Rs. 65 per share to T. This is 30% premium over the premerger market price of Rs. 50. The offer price is Rs. 65. 70) What is the exchange ratio from the above problem ?

a) b) c) d)

0.4333 2.307 1.15 2.10

71) What is the total number of shares to be issued as per the above problem? a) 76,000 b) 1,45,000 c) 1,21,000 d) 86,666 72) The two schools of accounting concepts are ___________ a) Single ledger concept and sub ledger concept b) Single ledger concept and double ledger concept c) Credit concept and debit concept d) Debtor concept and creditor concept 73) How to display the voucher entered . a) Gateway of Tally > Display > Pass book b) Gateway of Tally > Display > Day book c) Receipt of Tally > Display > Day book d) Gateway of Tally > Enter> Day book 74) Tally screen divided into four broad parts they are ____________ a) Product Information, back up, Button bar and Restore b) Product Information, Company name, Button bar and Calculator c) Product Information, Work area, Button bar and Back up d) Product Information, Work area, Button bar and Calculator 75) Shetty Brothers will purchase 500 books at the rate of rs. 100 per book, if the supplier offers 10% dis count and charges 5% sales tax, what will be the purchase price ? a) Rs. 67,500 b) Rs. 49,500 c) Rs. 47,500 d) Rs. 49,750