Basic Finance MCQs

A portion of profits, which a company retains itself for further expansion, is known as:

A. Dividends
B. Retained Earnings
C. Capital Gain
D. None of the given options

Quick Ratio is also known as:

A. Current Ratio
B. Acid-test Ratio
C. Cash Ratio
D. Solvency Ratio

Which of the following ratios are particularly interesting to short-term creditors:

A. Liquidity Ratios
B. Long-term Solvency Ratios
C. Profitability Ratios
D. Market Value Ratios

In which type of market, new securities are traded:

A. Primary market
B. Secondary market
C. Tertiary market
D. None of the given options

Which of the following terms refers to the use of debt financing:

A. Operating Leverage
B. Financial Leverage
C. Manufacturing Leverage
D. None of the given options

Which of the following costs are reported on the income statement as the cost of goods sold:

A. Product cost
B. Period cost
C. Both product cost and period cost
D. Neither product cost nor period cost

Finance is vital for which of the following business activity (activities):

A. Marketing Research
B. Product Pricing
C. Design of marketing and distribution channels
D. All of the given options

Which of the following refers to the cash flows that result from the firm‟s day-to-day activities of producing and selling:

A. Operating Cash Flows
B. Investing Cash Flows
C. Financing Cash Flows
D. All of the given options

Cash flow from assets involves which of the following component(s):

A. Operating cash flow
B. Capital spending
C. Change in net working capital
D. All of the given options

Financial policy is evaluated by which of the following:

A. Profit Margin
B. Total Assets Turnover
C. Debt-equity ratio
D. None of the given options

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