WIXLIB

C. Internal rate of returnD. None of the above81) The following is a statement of revenues and expenses for a specific period of timeA. Trading accountB. Trial BalanceC. Profit & Loss statementsD. Balance Sheet82) Money Paid or Earned for the use of money is called:A. DividendB. InterestC. ProfitD. Rent83) The following is (are) the current liability (ies)A.Bills PayableB. Outstanding expensesC.Bank overdraftD. All of the above84) All institutions and procedure for bringing buyers and sellers of financial instruments together in .A. Commodity marketsB. Foreign marketsC. Financial marketsD. Emerging markets85) Stock Exchange is aA. Primary marketB. Emerging marketC. Secondary marketD. None of the above86) GDP is an abbreviation ofA. Gross Domestic PriceB. Gross Domestic ProductC. Gross Domestic PowerD. None of the above87) Boom, Recession, Recovery and Depression are the stages ofA. Cash cycleB. Economic cycleC. Operating cycleD. None of the above88) The point at which there is no loss and no profit is known as:A. Break Even pointB. Fixed CostC. Variable CostD. All of the above89) will be credited if goods are given as charityA. CashD CharityC. PurchaseE Sales90) Real income isA. ABC systemB. Income after taxC. Adjusted for inflationD. Income before tax91) Asset Pricing Model is used to Price theA. Equity SharesB. CommodityC. ForexD. Interest92) Modaraba is mode ofA. Conventional FinancingB. Islamic FinancingC. Strategic FinancingD. Mortgage Financing93) Islamic Financing principles are based onA. CapitalismB. SocialismC. IslamiShariahD. Communism94) International finance is an area ofA. MarketingB. FinanceC. Human Resource ManagementD. Operation Management95) Financial Management covers all domains ExceptA. International FinanceB. Portfolio ManagementC. Financial statement analysisD. Marketing Management96) The art and science of managing scarce resources is calledA. EconomicsB. InvestmentC. InsuranceD. Behavior Sciences97) Working Capital Management does not includeA. Capital StructureB. Liquidity ManagementDiscipline: MS FINANCE, IBMSPage 6 of 17

C. Current AssetsD. Current Liabilities98) When two or more parteners agree to start up a business is calledA. PartnershipB. Public limited companyC. MudarbaD. Sole trader99) Amount spent on unsuccessful patents right is a:A. Capital expenditureB. Deferred revenueC. Revenue ExpenditureD. None of the above100) Leasehold property is generally depreciated byA. Reducing balance methodB. Annuity methodC. Fixed installment methodD. Insurance policy method101) Salaries paid to an employee is debited toA. Employee’s accountB. Salaries accountC. Cash accountD. Capital account102) Realisation account is aA. Nominal accountB. Personal accountC. Real accountD. Fictitious account103) In a common size balance sheet, each item is expresses as a percentage ofA. Debt capitalB. Total assetsC. Equity capitalD. Fixed assets104) All of the following are current assets, exceptA. StockB. DebtorC. CashD. Building105) Business means:A. Industry and commerceB. CommerceC. Selling and buying of goodsD. Exchanging commodities106) Goodwill account is aA. Real accountB. Personal accountC. Nominal accountD. None of the above107) A business is considered to be having an indefinite life according to:A. Accounting period conceptB. Going Concern conceptC. Cost conceptD. Dual concept108) Which of the following method of inventory valuation is based on historical cost?A. LIFOB. Specific identificationC. Base stockD. All of the above109) Purchase of furniture results inA. Increase in liabilitiesB. Increase in capitalC. Increase in assetsD. Decrease in assets110) Sales and purchase journal doesn't recordA. Credit salesB. Credit purchasesC. Credit sales and purchases111) Right shares are the shares:A. Issued by a newly formed companyC. First offered to debenture holders112) Fixed deposits are shown under the head:A. Unsecured loanC. Secured loan113) Liquid assets include:A. CashC. Marketable securities114) The immediate solvency ratio is:Discipline: MS FINANCE, IBMSD. Cash sales and purchasesB. First offered to the existingshareholdersD. Issued to the directors of the companyB. Contingent liabilityD. Current liabilityB. Debtors less bad debtsD. All of the abovePage 7 of 17

A. Current ratioB. Stock turns ratioC. Quick ratioD. Debtors turnover ratio115) The statement “Higher the ratio, the more favourable it is” does not apply to:A. Operating profit ratioB. Return on investmentC. Operating ratioD. Stock turnover 27)128)129)130)The Term Inflation meansA. Rise in PricesB Rise in heightC. Rise in InterestD Decrease in PricesThe chance of happening any unfavorable event in near future is classified asA. ChanceB. Event happeningC. ProbabilityD. RiskTotal Assets – Total Liabilities B.A.Shareholder’s EquityNet working CapitalD.C.Net AssetsNet ValueThe account that records expenses, gains and losses isA. Personal accountB. Real accountC. Nominal accountD. None of the aboveThe weighted average of the probability is classified asA. Average rate of returnB. Expected rate of returnC. Past rate of returnD. Weighted Rate of ReturnReal account recordsA. Dealings with creditors or debtorsB. Dealings in commoditiesC. Gains and lossesD. All of the aboveBalance sheets are preparedA. DailyB. WeeklyC. MonthlyD. AnnuallyThe following is a statement of revenues and expenses for a specific period of timeA. Trading accountB. Trial BalanceC. Profit & Loss statementsD. Balance SheetBalance sheet is a statement ofA. AssetsB. LiabilitiesC. CapitalD. All of the aboveThe account that records expenses, gains and losses isA. Personal accountB. Real accountC. Nominal accountD. None of the aboveThe following is (are) the type(s) of JournalA. Purchase JournalB. Sales JournalC. Cash JournalD. All of the aboveAny analysis of decision making of investor and mangers is classified asA. Riskier financeB. Behavioral financeC. Premium financeD. Buying financeThe cash is aA. Current assetB. Current liabilityC. Fixed AssetD. Fixed LiabilityAn expected rate of return is donated byA. e-barB. r-barC. r-hatD. e-hatBalance sheet is a statement ofA. AssetsB. LiabilitiesC. CapitalD. All of the aboveDiscipline: MS FINANCE, IBMSPage 8 of 17

3)144)145)146)147)An inflation free rate of return and inflation fermium are the two component ofA. Quoted rateB. Un quoted rateC. Steeper rateD. Portfolio rateThe risk affects any firm with the factor such as war, recession, inflation and high interest rate is classified asA. Diversifiable riskB. Market riskC. Stock riskD. Portfolio riskThe following is a statement of revenues and expenses for a specific period of timeA. Trading accountB. Trial BalanceC. Profit & Loss statementsD. Balance SheetCurrent ratio A. Quick assets/Current liabilitiesB. Current assets/Current liabilitiesC. Debt/EquityD. Current assets/EquityThe past realized rate of return in period t is donated byA. t bar rB. t hat rC. r hat tD. r bar tBuilding is aA. Current assetB. Current liabilityC. Fixed AssetD. Fixed LiabilityA higher inventory ratio indicatesA. Better inventory managementB. Quicker turnoverC. Both A and BD. None of the aboveReturn on Investment Ratio (ROI) A. (Gross profit / Net sales) x 100B. (Gross profit x Sales / Fixed assets) x 100C. (Net profit / Sales) x 100D. (Net profit / Total assets) x 100In Balance sheet an increase in asset isA. DebitedB. creditedC. MinusD. AddedReceivable comes under the headingA. AssetB. LiabilityC. CapitalD. none of aboveThe accounting process involves recordingA. Quantifiable economic eventB. Non Quantifiable economic eventC. All of themD. None of themRevenue –cost A. ProfitB. ExpenseC. CapitalD. equityAssets is written underA. Balance sheetB. Income statementC. Trial BalanceD. T accountSukuk is Arabic name stand forA. Financial liabilityB. Financial certificatesC. Financial assetsD. Financial loanA type of partnership where one party offer funds while other gives expertise and management isA. MurabahaB. MusharikaC. IjarahD. MudarabahThe standard format of Journal does not include which of the followingA. Assets columnB. Date columnC. Description columnD. Amount columnWord Musharika is originated from theA. Latin wordB. Arabic wordC. Persian wordD. French wordDiscipline: MS FINANCE, IBMSPage 9 of 17

0)161)162)163)164)In which of the following order, data is entered into the JournalA. Alphabetical orderB. Numeric orderC. Bullets orderD. Chronological orderWhich is liability side financing out of these meansA. large enterprises financingB. t-bill and federal investment bond/ debentureC. inter- bank lending/borrowingD. B & CExpression financing certificate & certificate of investment in Musharika isA. liability side financingB. liabilityC. assetsD. assets side financingWhich of the following accounts will be credited if a company purchases building for cashA. Capital accountB. Fixed assets accountC. Building accountD. Cash accountIncome statement is used forA. Profit calculationB. RevenueC. TaxD. ShareGiving share of investor to customer on lease is theA. Basis of musharikaB. Basis of diminishing musharikaC. Basis of ijarahD. Basis of hibahWhich of the following specialized journal records "goods returned by customers"A. Purchase journalB. Sales journalC. Purchase return journalD. Sales return journalSales on credit is recorded in which of the following journalA. Purchase journalB. Sales journalC. Purchase return journalD. Sales return journalBank are dealing a large number of commodities and services and facing a strongcompetition to attractA. Potential buyersB. Potential customersC. Potential employeesD. Potential sellerWord Musharika is originated from Arabic word Sharikah meaningA. FriendsB. IjarahC. LessorD. PartnershipSales and purchase journal doesn't recordA. Credit salesB. Credit purchasesC. Credit sales and purchasesD. Cash sales and purchasesProfit shall be divided in ratio mutually settled in theA. DeedB. ContractC. PrescribedD. All answers are correctWorking capital financing in Musharika isA. Liability side financingB. Asset side financingC. AssetD. LiabilityWhich of the following is a type of cash receipt journal cash payment journalA. Bank statementB. Statement of cash flowC. Cash bookD. Cash documentsTransferring entries from journal to ledger account is commonly known asA. RecordingB. TransferringC. PostingD. Entry makingwill be credited if goods are given as charityA. CashB. CharityC. PurchasesD. SalesWhich of the following is not a union tax ?A. Taxes on railway freights and faresB. Stump duties on financial documentsDiscipline: MS FINANCE, IBMSPage 10 of 17

173)C. TollsD. A & BThe matching concept matches which of the followingA. Asset with liabilitiesB. Capital with incomeC. Revenues with expensesD. Expenses with capitalThe tax on net income of companies isA. Personal income taxB. Interest taxC. Wealth taxD. Corporation taxPolitical risk also calledA. Exchange rate riskB. Business riskC. Country riskD. Financial riskThe concept of 'separate entity' is applicable to which of the following types of businessesA. Sole proprietorshipB. CorporationC. PartnershipD. All of the aboveDepreciation is charged on fixed assets to comply with which of the following accounting principleA. Matching conceptB. Prudence conceptC. Timeliness conceptD. Reliability conceptNet profit is computed in which of the followingA. Balance sheetB. Income statementC. Cash flow statementD. Statement of changes in equityIn income statement, gross profit is always equal toA. Sales - expensesB. Income - expensesC. Sales - cost of goods soldD. Sales - selling costsEurodollar bond is denominated inA. Australian dollarB. European dollarC. US dollarD. None of thesePurchases opening stock - closing stock 174)A. Amount of salesC. Cost of goods soldAssets minus liabilities equal 179)180)B. Gross profitD. Net incomeA. GoodwillB. Working capitalC. Net incomeD. CapitalReturn on Investment Ratio (ROI) A. (Gross profit / Net sales) x 100B. (Gross profit x Sales / Fixed assets) x 100C. (Net profit / Sales) x 100D. (Net profit / Total assets) x 100The standard format of Journal does not include which of the followingA. Assets columnB. Assets columnC. Description columnD. Description columnGoodwill is classified as which one of the following assetsA. FixedB. Long termC. CurrentD. IntangibleCurrent assets are also known asA. Gross working capitalB. Invested capitalC. AssetsD. CashAn alternative term used for accumulated depreciation expensesA. Provision for depreciationB. AssetC. Targeted depreciationD. DepletionWhich of the following is a primary industry?Discipline: MS FINANCE, IBMSPage 11 of 17

182)A. factoryC. general warehouse"Shareholder wealth" in a firm is represented by:A. the number of people employed in the firm.C. the amount of salary paid to its employees.183)184)185)186)188)C. maximize return on investment.D. maximize market shareWhich of the following would be considered an application of funds?A. a decrease in accounts receivable.B. a decrease in cash. optionC. an increase in account payable.D. an increase in cash.A , would be an example of a principal, while a would be an example of anagent.A. shareholder; managerB. manager; ownerC. accountant; bondholderD. shareholder; bondholderThe market price of a share of common stock is determined byA. the board of directors of the firm.B. the stock exchange on which the stock is listed.190)191)192)193)194)D. individuals buying and selling the stock.The focal point of financial management in a firm is:A. the number and types of products or servicesB. the minimization of the amount of taxes paid by thefirm.provided by the firm.C. the creation of value for shareholders.D. the dollars profits earned by the firm.The meaning of the acronym HRM is ?A. Human Relations ManagementC. Human Resource Management189)B. the book value of the firm's assets less the bookvalue of its liabilitiesD. the market price per share of the firm's commonstock.The long-run objective of financial management is to:A. maximize earnings per share.B. maximize the value of the firm's common stock.C. the president of the company.187)B. fruit farmD. supermarketB. Humanistic Resource ManagementD. Human Resourceful ManagementIn the , the future value of all cash inflow at the end of time horizon at a particular rate ofinterest is calculated.A. Risk-free rateB. Compounding techniqueC. Discounting techniqueD. Risk Premiumis the price at which the bond is traded in the stock exchange.A. Redemption valueB. Face valueC. Market valueD. Maturity valueenhance the market value of shares and therefore equity capital is not free of cost.A. Face valueB. DividendsC. Redemption valueD. Book valueIn approach, the capital structure decision is relevant to the valuation of the firm.A. Net incomeB. Net operating incomeC. TraditionalD. Miller and ModiglianiWhen is greater than zero the project should be accepted.A. Internal rate of returnB. Profitability indexC. Net present valueD. Modified internal rate of returnis defined as the length of time required to recover the initial cash outlay.Discipline: MS FINANCE, IBMSPage 12 of 17

7)A. Payback-periodB. Inventory conversion periodC. Discounted payback-periodD. Budget periodrefers to the amount invested in various components of current assets.A. Temporary working capitalB. Net working capitalC. Gross working capitalD. Permanent working capitalis the length of time between the firm’s actual cash expenditure and its own cash receipt.A. Net operating cycleB. Cash conversion cycleC. Working capital cycleD. Gross capital cyclerefers to a firm holding some cash to meet its routine expenses that are incurred inthe ordinary course of business.A. Speculative motiveB. Transaction motiveC. Precautionary motiveD. Compensating motiverefers to the length of time allowed by a firm for its customers to make payment for theirpurchases.A. Holding periodB. Pay-back periodC. Average collection periodD. Credit periodAmounts due from customers when goods are sold on credit are called .A. Trade balanceB. Trade debitsC. Trade discountD. Trade offand are the two versions of goals of the financialmanagement of the firm.A. Profit maximization, Wealth maximizationB. Production maximization, Sales maximizationC. Sales maximization, Profit maximizationD. Value maximization, Wealth maximizationWhich of the following is not the responsibility of financial management?A. allocation of funds to current and capital assetsA. allocation of funds to current and capital assetsC. preparation of the firm's accounting statementsC. preparation of the firm's accounting statementsConsider the below mentioned statements: 1. The dividends are not cumulative for equity shareholders, thatis, they cannot be accumulated and distributed in the later years. 2. Dividends are taxable. State True or False:A. 1-True, 2-TrueB. 1-False, 2-TrueC. 1-False, 2-FalseD. 1-True, 2-Falseand carry a fixed rate of interest and are to be paid off irrespective of the firm’srevenues.A. Debentures, DividendsB. Debentures, BondsC. Dividends, BondsD. Dividends, Treasury notesConsider the below mentioned statements: 1. A debt-equity ratio of 2:1 indicates that for every 1 unit ofequity, the company can raise 2 units of debt. 2. The cost of floating a debt is greater than the cost of floatingan equity issue. State True or False:A. 1-True, 2-TrueB. 1-False, 2-TrueC. 1-False, 2-FalseD. 1-True, 2-FalseCredit policy of every company is largely influenced by and .A. Liquidity, accountabilityB. Liquidity, profitabilityC. Liability, profitabilityD. Liability, liquidityXYZ is an oil based business company, which does not have adequate working capital. It fails to meet itscurrent obligation, which leads to bankruptcy. Identify the type of decision involved to prevent risk ofbankruptcy.A. Investment decisionB. Dividend decisionC. Liquidity decisionD. Finance decisionBasic objective of Financial Management is .A. Maximization of profit.B. Maximization of shareholder’s wealthC. Ensuring Financial discipline in the firm.D. All of these.Discipline: MS FINANCE, IBMSPage 13 of 17

208)How are earnings per share calculated?A. Use the income statement to determine earnings B.after taxes (net income) and divide by the previousperiod's earnings after taxes. Then subtract 1 fromthe previously calculated value.C. Use the income statement to determine earnings D.after taxes (net income) and divide by the numberof common and preferred shares outstanding.209)Use the income statement to determine earningsafter taxes (net income) and divide

53) Net Present Value (NPV) technique is used to make decision related to the: A. Capital budgeting B. Financial statements C. Working capital D. Short term financing 54) Gross profit is equals to: A. Net sales - Operating costs B. Net sales - Cost of goods sold C. Net sales - Fixed costs D. Net sales - Variable cost