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Financial Management

Total questions: 40

Worksheet time: 40mins

Name
Class
Date
1.

Pool of institutions and procedures that facilitate transactions in all types of financial claims refer to

a)

Banking institutions

b)

Financial market

c)

Money market

d)

Ministry of finance

2.

These are advantages for running a business in the form of sole proprietorship, except

a)

flexibility for owner

b)

responsible to all activities

c)

bounded by partnership

d)

owner retains all profits

3.

Based on financial management, firm usually tend to attain specific goal which is

a)

investment maximization

b)

operation maximization

c)

wealth maximization

d)

capital maximization

4.

These are all functions of financial manager in an organization:

a)

Involve the analysis of cause and responsible to control cash flow

b)

Determine how much money to be allocated for assets

c)

Involve in manufacturing process and strategies

d)

Determine the sources of fund for firm to maintain operation

5.

The form of business which has unlimited number of shareholders and large scale economic operations refers to:

a)

Sole proprietorship

b)

Corporation

c)

Partnership

d)

Small enterprise

6.

Below are examples of non-profit organization, except

a)

Malaysian Nature Society

b)

MAKNA

c)

Permodalan Nasional Berhad

d)

Mercy Malaysia

7.

One of the thumb rules for doing an investment is

a)

High risk, low profit

b)

High return, high profit

c)

High profit, low risk

d)

High risk, high return

8.

Which of the followings are key financial statements in an organization

a)

Statement of cash flows

b)

Bank statement

c)

Balance sheet

d)

Income statement

e)

Supplier's quotation

9.

________ shows the financial position of a company at point of assets and liabilities is measured

a)

Income statement

b)

Pro forma statement

c)

Balance sheet

d)

Cash flow statement

10.

Family Mart collect RM2,000 from SS Company who is the customer. The statement shows that Family Mart utilizes

a)

sources of fund

b)

uses of fund

11.

AA Enterprise borrow long term by selling bonds RM80,000. This statement shows that AA Enterprise utilizes

a)

Sources of fund

b)

Uses of fund

12.

Brandy Sdn Bhd purchased new fixed assets worth RM10,000. This statement shows that Brandy Sdn Bhd utilizes

a)

Sources of fund

b)

Uses of fund

13.

Three components of the statement of cash flows are:

a)

Cash flow from financing activities

b)

Cash flow from administrative activities

c)

Cash flow from operating activities

d)

Cash flow from investing activities

e)

Cash flow from capital activities

14.

Followings are the example of fixed assets, except

a)

machinery

b)

building

c)

inventories

d)

land

15.

_______ are relatively liquid, and are expected to be converted to cash within a year.

a)

Current liabilities

b)

Non-current liabilities

c)

Current assets

d)

Non-current assets

16.

To identify the uses of funds in a firm over a time is by

a)

increasing in assets.

b)

increasing in liabilities.

c)

decreasing in assets.

d)

selling the stocks.

17.

_________ used to compare different firms at the same point in time.

a)

Industry comparative analysis

b)

Cross-sectional analysis

c)

Trend analysis

d)

Combined analysis

18.

Leverage is the extend which a firm is using debt financing and the degree of safety that the firm provides to the creditors. _______ ratio is one of the ratios to evaluate leverage.

a)

Average collection period

b)

Net working capital

c)

Inventory turnover

d)

Time interest earned

19.

The best sentence to describe activity ratio.

a)

The extend to which a firm is using debt financing and the degree of safety that the firm provides to the creditors.

b)

The firm's ability to meet its current obligations as they come due.

c)

The effectiveness of a firm in managing its assets that related to the level of operations

d)

The combined effects of liquidity, asset management and debt of the firm.

20.

The followings are the statements that best described for cash budget, except

a)

The cash forecast of the firm by planning inflows and outflows.

b)

Depreciation is excluded from the statement.

c)

Used to estimate short term cash requirements.

d)

Positive cashflow indicate the firm has surplus cash.

21.

Which of the following is component in cash receipt.

a)

purchasing materials

b)

Wages

c)

dividend received

d)

acquire fixed asset

22.

The following items are spontaneous when the firm is operating below its capacity, except

a)

Account receivable

b)

Account payable

c)

Fixed assets

d)

Retained earnings

23.

Items that remain constant or unchanged when the firm operating at full capacity are:

a)

Retained earnings

b)

Long term debt

c)

Cash

d)

Preferred stock

e)

Common stock

24.

All assets purchased by the firm can be financed in three ways, which are short-term financing, long-term financing and ________.

a)

immediate financing.

b)

spontaneous financing.

c)

impulsive financing.

d)

temporary financing.

25.

All fixed assets and part of the permanent will be financed by long-term financing. The statement is best described for ______.

a)

aggressive approach.

b)

hedging approach.

c)

preserve approach.

d)

conservative approach.

26.

The firm has amount of cash reserved for the unexpected event which unlikely to be happened is _______ motive for holding cash.

a)

transaction

b)

speculative

c)

precautionary

d)

leisure

27.

Cash turnover is an average time required to acquire inventory, sell it and collect money from it.

a)

True

b)

False

28.

Why do the firm need to do the basic cash management?

a)

The firm want to has low average payment period

b)

The firm want to has low average collection period

c)

The firm want to has many customer

d)

The firm want to connect with many suppliers

29.

Inventory can be divided into 3 categories:

a)

work-in process

b)

raw materials

c)

reserved stock

d)

finished goods

30.

The variable costs per unit of holding an item of inventory for a specific period of time includes:

a)

storage cost

b)

ordering cost

c)

insurance cost

d)

property taxes

e)

depreciation

31.

_______ is extra inventory to prevent stockout in the firm's warehouse.

a)

Safety stock

b)

Reorder point

c)

Lead time

d)

Total inventory cost

32.

Non-spontaneous financing can be divided into:

a)

security loan and permanent loan

b)

temporary loan and permanent loan

c)

secured loan and unsecured loan

d)

long-term loan and immediate loan

33.

_______ is the requirement amount from the bank to the borrower with specific percentage of the outstanding loan balance on deposit in the borrower's account.

a)

floatation cost

b)

commitment fees

c)

compensating balance

d)

unused portion

34.

Short term unsecured promissory notes that is generally sold by large corporation on discount basis with the maturity period from 1 to 270 days. The statement is best described for _______.

a)

bonds.

b)

commercial paper.

c)

preferred shares,

d)

common stocks.

35.

_____ market is where institutions can buy and sell instruments to raise the fund with maturity more than a year.

a)

Capital

b)

Financial

c)

Investment

d)

Money

36.

The promissory notes that commonly has long-term and viewed as debt instrument which par value have been set at RM1,000.

a)

Preferred stock

b)

Common stock

c)

Bond

d)

Derivative

37.

The followings are the characteristics of common stock, except

a)

voting rights

b)

preemptive right

c)

limited liability

d)

call feature

38.

The best decision for the firm in capital budgeting is ______

a)

low net present value

b)

low payback period

c)

high payback period

d)

low profitability index

39.

Company prefers to go for debt financing instead of equity financing because of

a)

A company does not have to share ownership of the company

b)

Interest paid is exempted from tax, while dividends paid on equity are not

c)

A company can offer voting right to the investors

d)

Interest paid to the bondholders are tax deductible and therefore is a cheaper source of capital

40.

Common stockholders received fixed dividends, and have higher priority than priority than preferred stockholders in event of liquidation of the firm.

a)

True

b)

False