Simplified guide of MCQs for Exams, Interviews

Topic: Management Sciences

1 .  A major facet of financial management involves providing the financing necessary to support:

  • A. Liabilities
  • B. Debts
  • C. Loans
  • D. Assets

Correct Answer:


2 .  Agency theory suggests that managers(the agents), particularly those of large , publically-owned firms, may have different objectives from those of the:

  • A. Workers
  • B. Subordinates
  • C. Shareholders
  • D. Employees

Correct Answer:


3 .  Period costs include which of the following?

  • A. Selling expense
  • B. Raw material
  • C. Direct labor
  • D. Manufacturing overhead

Correct Answer:

Selling expense

4 .  Product costs include which of the following?

  • A. Selling expenses
  • B. General expenses
  • C. Manufacturing overhead
  • D. Administrative expenses

Correct Answer:

Manufacturing overhead

5 .  Financial policy is evaluated by which of the following?

  • A. Profit Margin
  • B. Total Assets Turnover
  • C. Debt-equity ratio
  • D. None

Correct Answer:

Debt-equity ratio

6 .  Cash flow from assets involves which of the following component(s)?

  • A. Operating cash flow
  • B. Capital spending
  • C. Change in net working capital
  • D. All

Correct Answer:


7 .  Which of the following costs are reported on the income statement as the cost of goods sold?

  • A. Product cost
  • B. Period cost
  • C. Both product cost and period cost
  • D. Neither product cost nor period cost

Correct Answer:

Both product cost and period cost

8 .  Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?

  • A. 5 days
  • B. 36 days
  • C. 50 days
  • D. 73 days

Correct Answer:

73 days

9 .  Which of the following terms refers to the use of debt financing?

  • A. Operating Leverage
  • B. Financial Leverage
  • C. Manufacturing Leverage
  • D. None

Correct Answer:

Financial Leverage

10 .  In which type of market, new securities are traded?

  • A. Primary market
  • B. Secondary market
  • C. Tertiary market
  • D. None

Correct Answer:

Primary market