Top 550+ Solved Financial Management MCQ Questions Answer
Q. Bad debt cost is not borne by factor in case of
a. Pure Factoring
b. Without Recourse Factoring,
c. With Recourse Factoring
d. None of the above
Q. Which of the following is not a technique of receivables Management?
a. Funds Flow Analysis
b. Ageing Schedule,
c. Days sales outstanding
d. Collection Matrix.
Q. Which of the following is not a part of credit policy?
a. Collection Effort
b. Cash Discount,
c. Credit Standard
d. Paying Practices of debtors.
Q. Which is not a service of a factor?
a. Administrating Sales Ledger
b. Advancing against Credit Sales,
c. Assuming bad debt losses,
d. None of the above.
Q. Credit Policy of a firm should involve a trade-off between increased
a. Sales and Increased Profit
b. Profit and Increased Costs of Receivables,
c. Sales and Cost of goods sold,
d. None of the above.
Q. Out of the following, what is not true in respect of factoring?
a. Continuous Arrangement between Factor and Seller,
b. Sale of Receivables to the factor,
c. Factor provides cost free finance to seller
d. None of the above.
Q. Payment to creditors is a manifestation of cash held for:
a. Transactionery Motive,
b. Precautionary Motive,
c. Speculative Motive,
d. All of the above.
Q. If the closing balance of receivables is less than the opening balance for a month thenwhich one is true out of
a. Collections>Current Purchases,
b. Collections>Current Sales,
c. Collections<Current Purchases,
d. Collections < Current Sales.
Q. If the average balance of debtors has increased, which of the following might notshow a change in general?
a. Total Sales,
b. Average Payables
c. Current Ratio
d. Bad Debt loss
Q. Securitization is related to conversion of
a. Receivables,
b. Stock,
c. Investments,
d. Creditors.
Q. 80% of sales of 10,00,000 of a firm are on credit. It has a Receivable Turnover of 8.What is the Average collection period (360 days a year) and Average Debtors of the firm?
a. 45 days and 1,00,000
b. 360 days and 1,00,000,
c. 45 days and 8,00,000
d. 360 days and 1,25,000
Q. In response to market expectations, the credit pence r j been increased from 45 days to60 days. This would result in
a. Decrease in Sales,
b. Decrease in Debtors,
c. Increase in Bad Debts,
d. Increase in Average Collection Perio
Q. If a company sells its receivable to another party to raise funds, it is known as
a. Securitization
b. Factoring,
c. Pledging
d. None of the above.
Q. Cash Discount term 3/15, net 40 means
a. 3% Discount if payment in 15 days, otherwise full payment in 40 days,
b. 15% Discount if payment in 3 days, otherwise full payment 40 days,
c. 3% Interest if payment made in 40 days and 15%,interest thereafter,
d. None of the above.
Q. If the sales of the firm are . 60,00,000 and the average debtors are . 15,00,000 thenthe receivables turnover is
a. 4 times
b. 25%
c. 400%
d. 0.25 times