Top 150+ Solved Working Capital Management MCQ Questions Answer
Q. ABC Analysis is used in
a. inventory management
b. receivables management
c. accounting policies,
d. corporate governance.
Q. If no information is available, the General Rule for valuation of stock forbalance sheet is
a. replacement cost,
b. realizable value,
c. historical cost,
d. standard cost.
Q. In ABC inventory management system, class A items may require
a. higher safety stock
b. frequent deliveries
c. periodic inventory system
d. updating of inventory records.
Q. Inventory holding cost may include
a. material purchase cost,
b. penalty charge for default,
c. interest on loan,
d. none of the above.
Q. Use of safety stock by a firm would
a. increase inventory cost
b. decrease inventory cost,
c. no effect on cost
d. none of the above.
Q. Which of the following is true for a company which uses continuous reviewinventory system
a. order interval is fixed,
b. order interval varies,
c. order quantity is fixed,
d. both (a) and (c).
Q. EOQ determines the order size when
a. total order cost is minimum
b. total number of order is least,
c. total inventory costs are minimum,
d. none of the above.
Q. ABC Analysis is useful for analyzing the inventories:
a. based on their quality,
b. based on their usage and value,
c. based on physical volume,
d. all of the above.
Q. If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unitper annum, then EOQ
a. (2ao/c) 2 ,
b. 2ao/c
c. 2a÷oc,
d. 2aoc.
Q. Inventory is generally valued as lower of
a. market price and replacement cost
b. cost and net realizable value
c. cost and sales value,
d. sales value and profit.
Q. Which of the following is not included in cost of inventory?
a. purchase cost
b. transport in cost,
c. import duty,
d. selling costs.
Q. Cost of not carrying sufficient inventory is known as
a. carrying cost,
b. holding cost,
c. total cost
d. stock-out cost
Q. Which of the following is not a benefit of carrying inventories
a. reduction in ordering cost,
b. avoiding lost sales,
c. reducing carrying cost,
d. avoiding production shortages.
Q. Which of the following is not a standard method of inventory valuation?
a. first in first out
b. standard cost,
c. average pricing,
d. realizable value.
Q. System of procuring goods when required, is known as,
a. free on board (fob),
b. always butter control (abc),
c. jest in time (jit)
d. economic order quantity.