MBA MCQ Quiz Hub

1. If bank giving 12% interest rate per year, then per month it will be
1%
12%
5%
6%

2. Market value determines
On running business
When company closedown
Before establishment of business
When asset sold individually

3. The Yield to Maturity on a bond is
Equal to the Coupon Rate divided by the Market Price
The Current Required Market Rate
Equal to the Annual Interest divided by the Face Value
Another name for the coupon rate.

4. Muhammad Ali just received an interest payment that is equal to 7 percent of his Rs. 20,000 in Bond investment. This 7 percent is best described as a
Real Return
Deflated Return
Coupon Return
None

5. A decrease in the firm's receivable turnover ratio means that ______
Inventories have gone up
It is collecting credit sales more slowly than before
Cash sales have gone down
None of Above

6. Marketable Securities, Account Receivables and Inventory are listed as
Current Asset
Current Liabilities
Long Term Asset
Long term liabilities

7. The Coupon Rate for a Bond is best defined as the
Annual interest divided by the current market price
Annual interest divided by the face value
Annual interest divided by the clean market price
all of above

8. Which of the following is considered a Profitability measure?
Days Sales in Inventory
Fixed Asset Turnover
Cash Coverage Ratio
Return on Assets

9. Quick ratios are also called ______
Super ratios
Acid-test ratios
Cash ratios
None of the above

10. Bond secured by lien on real property is
Debenture
Euro bond
Mortgage bond
Convertible bond

11. Net present value _______
Is equal to the initial investment in a project
Is equal to the present value of the project benefits
Is equal to zero when the discount rate used is equal to the IRR
Is simplified by the fact that future cash flows are easy to estimate

12. Profit maximization is a
Short term concept
Long term concept
Both a & b
None

13. Which of the following is the variability of return on stocks or portfolios associated with changes in return on the market as a whole?
Systematic risk
Standard deviation
Unsystematic risk
Coefficient of variation

14. When the bond approaches its maturity, the market value of the bond approaches to which of the following?
Intrinsic value
Book value
Par value
Historic cost

15. Bonds are hybrid of
Annuity due + Lumpsum amount
Ordinary annuity + Lumpsum amount
Annuity due + Ordinary annuity
Perpetuity + Lumpsum amount

16. Which one of the following can issue the corporate bond?
Individuals
Government
Public limited companies
All of before

17. A Bond that pays no interest payments and sells at a deep discount is called
Bond
Zero Coupon
Convertible
Tax-free

18. Which of the following statements is incorrect?
Assets - Capital = Liabilities
Liabilities + Assets = Capital
Liabilities + Capital = Assets
Assets - Liabilities = Capital

19. Given the following, what is the amount of Capital? Assets: Premises £20,000; Stock £8,500; Cash £100. Liabilities: Creditors £3,000; Loan from A Adams £4,000
£21,100
£21,400
£21,600
£32,400

20. To find the value of closing stock at the end of a period we
do this by stocktaking
deduct cost of goods sold from sales
deduct opening stock from cost of goods sold
look in the stock account

21. Given figures showing: Sales £8,200; Opening stock £1,300; Closing stock £900; Purchases £6,400; Carriage inwards £200, the cost of goods sold figure is:
Another figure
£6,200
£6,800
£7,000

22. When Lee makes out a cheque for £50 and sends it to Young, then Lee is known as:
The payee
The banker
The drawer
The creditor

23. 'Posting' the transactions in bookkeeping means:
Making the second entry of a double entry transaction
Entering items in a cash book
Making the first entry of a double entry transaction
Something other than the above

24. Given a purchases invoice showing 5 items of £80 each, less trade discount of 25 per cent and cash discount of 5 per cent, if paid within the credit period, your cheque would be made out for:
£260
£280
£285
None of these

25. We originally sold 25 items at £12 each, less 331/3 per cent trade discount. Our customer now returns 4 of them to us. What is the amount of credit note to be issued?
£36
£30
£32
£48

26. At the balance sheet date the balance on the Accumulated Provision for Depreciation Account is:
Transferred to Depreciation Account
Transferred to the Asset Account
Transferred to Profit and Loss Account
Simply deducted from the asset in the Balance Sheet

27. A credit balance brought down on a Rent Account means:
We have paid too little in rent
We have paid too much rent
We owe that rent at that date
We have paid that rent in advance at that date

28. What should happen if the balance on a Suspense Account is of a material amount?
Write it off to Profit and Loss Account
Should be written off to the balance sheet
Carry forward the balance to the next period
Find the error(s) before publishing the final accounts

29. If opening stock is £3,000, closing stock £5,000, sales £40,000 and margin 20 per cent, then stock turn is:
7 ½ times
8 times
5 times
6 times

30. Which of the following should be charged in the Profit and Loss Account?
Carriage on raw materials
Carriage on raw materials
Office rent
Direct materials

31. You are to buy an existing business which has assets valued at buildings £50,000, Motor vehicles £15,000, Fixtures £5,000 and Stock £40,000. You are to pay £140,000 for the business. This means that:
You have made an arithmetical mistake
You are paying £40,000 for Goodwill
Buildings are costing you £30,000 more than their value
You are paying £30,000 for Goodwill

32. A company wishes to pay out all available profits as dividends. Net profit is £26,600. There are 20,000 8% Preference shares of £1 each, and 50,000 Ordinary shares of £1 each. £5,000 is to be transferred to General Reserve. What Ordinary dividends are to be paid, in percentage terms?
40 per cent
60 per cent
10 per cent
20 per cent

33. Which of the following is not an asset?
Buildings
Debtors
Loan from K Harris
Cash balance

34. Which of the following best describes the meaning of 'Purchases'?
Goods bought on credit
Goods paid for
Goods bought for resale
Items bought

35. Which of the following best describes a trial balance?
Shows all the entries in the books
It is a list of balances on the books
Shows the financial position of a business
It is a special account

36. The descending order in which current assets should be shown in the balance sheet is:
Debtors, Stock, Bank, Cash
Cash, Bank, Debtors, Stock
Stock, Debtors, Cash, Bank
Stock, Debtors, Bank, Cash

37. The Sales Day Book is best described as:
Containing customers' accounts
Containing real accounts
Part of the double entry system
A list of credit sales

38. A debit balance of £100 in a cash account shows that:
There was £100 cash in hand
The total of cash received was less than £100
£100 was the total of cash paid out
Cash has been overspent by £100

39. Sales invoices are first entered in:
The Cash Book
The Purchases Journal
The Sales Journal
The Sales Account

40. Credit notes issued by us will be entered in our:
Sales Account
Returns Outwards Journal
Returns Inwards Journal
Returns Inwards Account

41. If an accumulated provision for depreciation account is in use then the entries for the year's depreciation would be:
Credit Asset Account, debit Provision for Depreciation Account
Debit Asset Account, credit Profit and Loss Account
Credit Provision for Depreciation Account, debit Profit and Loss Account
Credit Profit and Loss Account, debit Provision for Depreciation Account

42. If we take goods for own use we should:
Debit Drawings Account: Credit Purchases Account
Debit Drawings Account: Credit Stock Account
Debit Sales Account: Credit Stock Account
Debit Purchases Account: Credit Drawings Account

43. A cheque paid by you, but not yet passed through the banking system, is:
A credit transfer
A dishonored cheque
An un-presented cheque
A standing order

44. Given desired cash float of £200, if £146 is spent in the period, how much will be reimbursed at the end of the period?
£53
£146
£254
£200

45. Which of these errors would be disclosed by the trial balance?
A purchase of £250 was omitted entirely from the books
Credit sales of £300 entered in both double entry accounts as £30
Selling expenses had been debited to Sales Account
Cheque £95 from C Smith entered in Smith's account as £59

46. A Receipts and Payments Account is one:
In which the surplus of income over expenditure is calculated
In which the opening and closing cash balances are shown
Which is accompanied by a balance sheet
In which the profit is calculated

47. Where there is no partnership agreement then profits and losses:
Must be shared equally
Must be shared in same proportion as capitals
Must be shared equally after adjusting for interest on capital
None of these

48. Which of the following is a liability?
Motor Vehicles
Machinery
Creditors for goods
Cash at Bank

49. Which of the following should not be called 'Sales'?
Goods sold for cash
Sale of item previously included in 'Purchases'
Office fixtures sold
Goods sold on credit

50. What would have been the balance on the account of C De Freitas in MC17 on 19 May 20X5?
A credit balance of £445
A credit balance of £95
A credit balance of £265
A debit balance of £265