LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single Answer*Question -A quantity discount is offered :-Correct Answer On large shipments
Your Answer On large shipments
Multiple Choice Multiple Answer*Question -Indicators of the value of an investment are obtained by :-Correct Answer Reference to its market value , The investee`s assets , The
expected cash flows from the investment
Your Answer The expected cash flows from the investment , Current
investment valuation , The investee`s assets
Multiple Choice Single Answer*Question -The following is not a method of payment to the acquired firm:-Correct Answer Fixed deposits of the acquiring firm
Your Answer Convertible securities
True/False*Question -The activity model is normally created by an activity Accountant.Correct Answer False
Your Answer False
Multiple Choice Multiple Answer*Question -A company is prohibited to buy back its own shares in the
following circumstances :-Correct Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon
Your Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon
Select The Blank*Question -If the segment result of a segment includes interest or dividend
income its segment assets will not include ________.Correct Answer Payables
Your Answer Related receivables
Select The Blank*Question -Forward or backward integration is a characteristic of ________.Correct Answer Vertical Mergers
Your Answer Horizontal Mergers
Multiple Choice Single Answer*Question -Modigliani - Miller Theoram is based on :-Correct Answer Perfect Capital Markets
Your Answer Perfect Capital Markets
True/False*Question -Value based approach of HRA tracking can be divided into 2
categories - Non - monetary & monetary.Correct Answer True
Your Answer False
Select The Blank*Question -During the costing process, we look at ________.Correct Answer Resource consumption
Your Answer Resource consumption
Multiple Choice Multiple Answer*Question -For accounting standard (AS) 27, Significant influence may be
gained by :-Correct Answer Share ownership , Statute , Agreement
Your Answer Share ownership , Statute , Agreement
Multiple Choice Multiple Answer*Question -As a general rule, an asset is :-Correct Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
Your Answer A good or a right that a firm owns in a determined moment ,
Capitalized expenses
Multiple Choice Single Answer*Question -Deferred payment plan is also known as:-Correct Answer Earn out plan
Your Answer Earn out plan
True/False*Question -There are few methods of allocating depreciation over the useful
life of an assets.Correct Answer False
Your Answer True
Select The Blank*Question -Market approach is used for companies whose shares are
________ on the Stock market.Correct Answer Listed
Your Answer Listed
Multiple Choice Multiple Answer*Question -Operating economies of scale are achieved through the following
mergers :-Correct Answer Horizontal , Vertical , Conglomerate
Your Answer Horizontal , Vertical , Financial
Multiple Choice Single Answer*Question -Tender offers can be afforded by firms with :-Correct Answer A large amount of financial Slack
Your Answer A large amount of financial Slack
Multiple Choice Single Answer*Question -The following method of valuation is used for listed companies
that have an active market for their shares :-Correct Answer Market value approach
Your Answer Market value approach
Select The Blank*Question -According to Altman (1984) total costs in percentage of the
market value of a firm range between ________Correct Answer 12.1 % & 16.7 %
Your Answer 12.1 % & 16.7 %
Multiple Choice Single Answer*Question -Conservative policy for determining the requirements of current
assets is also known as :-Correct Answer Flexible policy
Your Answer Aggressive policy
Multiple Choice Single Answer*Question -Yield or earning approach method of valuation uses :-Correct Answer Price to earnings ratio
Your Answer Price to earnings ratio
Multiple Choice Multiple Answer*Question -The main categories of organisational elements are :-Correct Answer Managerial , Support , Operational
Your Answer Managerial , Partly functional , Operational
Select The Blank*Question -The ________ cost tier has the advantage of being the simplest
to calculate and justify.Correct Answer Direct
Your Answer Direct
Multiple Choice Multiple Answer*Question -The existence of significant influence by an investor is usually
evidenced in the following ways :-Correct Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Your Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Multiple Choice Single Answer*Question -Free Reserves is a component of :-Correct Answer Equity
Your Answer Equity
Match The Following*Question -Correct Answer Your Answer
Sentiments and rumours No fundamental basis. No effect on valuation
Unlisted shares on stock
exchange
Difficult to estimate the
price
Invalid valuation of shares
Manipulation of stock
markets
Invalid valuation of shares Easy to estimate the price
Selective information Valuation by various
people on information
available
Valuation by various
people on information
available
True/False*Question -Only firms with a large amount of financial slack can afford
tender offers.Correct Answer True
Your Answer True
Select The Blank*Question -Buy back through book building the process should be made
through ________.Correct Answer An electronically linked transparent facility
Your Answer Through brokers
Multiple Choice Multiple Answer*Question -For M & As, the acquiring firm needs industry data on :-Correct Answer Market growth , Nature of competition , Degree of regulation
Your Answer Market growth , Marketing capabilities , Nature of competition
True/False*Question -The chance of bankruptcy is small when the leverage of a firm is
small.Correct Answer True
Your Answer False
True/False*Question -A change in the method of depreciation is treated as a change in
an accounting policy and is disclosed accordingly.Correct Answer True
Your Answer True
Select The Blank*Question -Economies of scale arises with increase in volume of production
leading to________.Correct Answer Reduction in the cost of production
Your Answer Reduction in the cost of production
True/False*Question -Arbitrage process implies that security cannot sell at different
prices.Correct Answer True
Your Answer True
Select The Blank*Question -Capital gains are taxed at ________.Correct Answer Preferentially lower rate
Your Answer Acquisition price
Multiple Choice Single Answer*Question -Net period - no cash discount means :-Correct Answer The seller only specifies the time period allowed for the payment
Your Answer Cash on delivery of goods
True/False*Question -A long term investment is an investment other than a current
investment.Correct Answer True
Your Answer True
Multiple Choice Single Answer*Question -Accounting standards (AS - 17) has come into effect in respect
of accounting periods commencing :-Correct Answer On or after 01.04.2001
Your Answer Prior to 01.04.2001
True/False*Question -Accounting standards (AS - 13) is now mandatory.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer*Question -Valuation methods are highly specific to the following for doing
the valuation :-Correct Answer To the person , To the firm , To the Consultant
Your Answer To the person , To the firm , To the Consultant
Select The Blank*Question -________ Assets in the balance sheet are normally excluded
from the value of total assets.Correct Answer Intangible
Your Answer Tangible
Multiple Choice Multiple Answer*Question -The budgetary records are useful for:-Correct Answer Validating accounting costs , Providing a rationale for division of
costs , Replacing missing data
Your Answer Validating accounting costs , Allocating indirect costs into
different cost centres , Providing a rationale for division of costs
Multiple Choice Multiple Answer*Question -As per the new sections of the company's act, funds out of which
buy back may be financed include :-Correct Answer Free reserves of the company , Securities premium account ,
Proceeds of any shares or other specified securities
Your Answer Loans taken from banks and financial institutions , Free reserves
of the company , Securities premium account
Match The Following*Question -Correct Answer Your Answer
PpH = P / H ( C + B ) / P
SPE = R / H (C + B ) / R
RR = (C + B ) / R P / H
U % = R / ( C + B ) R / ( C + B )
Multiple Choice Multiple Answer*Question -Due to diversification employees seek:-Correct Answer Job security , Better opportunities within the firm , Higher
compensation
Your Answer Job security , Better opportunities within the firm , More perks &
benefits
Select The Blank*Question -In today's fast moving world, the quickest way to get information
on a firm is through ________.Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer*Question -It is often not possible to directly attribute, or reasonably allocate
:-Correct Answer The interest bearing liabilities to segments
Your Answer Goodwill
True/False*Question -Odd lots purchase is not a method of buy back of shares.Correct Answer False
Your Answer True
Multiple Choice Single Answer*Question -A quantity discount is offered :-Correct Answer On large shipments
Your Answer On large shipments
Multiple Choice Multiple Answer*Question -Indicators of the value of an investment are obtained by :-Correct Answer Reference to its market value , The investee`s assets , The
expected cash flows from the investment
Your Answer The expected cash flows from the investment , Current
investment valuation , The investee`s assets
Multiple Choice Single Answer*Question -The following is not a method of payment to the acquired firm:-Correct Answer Fixed deposits of the acquiring firm
Your Answer Convertible securities
True/False*Question -The activity model is normally created by an activity Accountant.Correct Answer False
Your Answer False
Multiple Choice Multiple Answer*Question -A company is prohibited to buy back its own shares in the
following circumstances :-Correct Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon
Your Answer Through any subsidiary company , Through any investment
company , If a company defaults in repayment of deposits or
interest due thereon
Select The Blank*Question -If the segment result of a segment includes interest or dividend
income its segment assets will not include ________.Correct Answer Payables
Your Answer Related receivables
Select The Blank*Question -Forward or backward integration is a characteristic of ________.Correct Answer Vertical Mergers
Your Answer Horizontal Mergers
Multiple Choice Single Answer*Question -Modigliani - Miller Theoram is based on :-Correct Answer Perfect Capital Markets
Your Answer Perfect Capital Markets
True/False*Question -Value based approach of HRA tracking can be divided into 2
categories - Non - monetary & monetary.Correct Answer True
Your Answer False
Select The Blank*Question -During the costing process, we look at ________.Correct Answer Resource consumption
Your Answer Resource consumption
Multiple Choice Multiple Answer*Question -For accounting standard (AS) 27, Significant influence may be
gained by :-Correct Answer Share ownership , Statute , Agreement
Your Answer Share ownership , Statute , Agreement
Multiple Choice Multiple Answer*Question -As a general rule, an asset is :-Correct Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
Your Answer A good or a right that a firm owns in a determined moment ,
Capitalized expenses
Multiple Choice Single Answer*Question -Deferred payment plan is also known as:-Correct Answer Earn out plan
Your Answer Earn out plan
True/False*Question -There are few methods of allocating depreciation over the useful
life of an assets.Correct Answer False
Your Answer True
Select The Blank*Question -Market approach is used for companies whose shares are
________ on the Stock market.Correct Answer Listed
Your Answer Listed
Multiple Choice Multiple Answer*Question -Operating economies of scale are achieved through the following
mergers :-Correct Answer Horizontal , Vertical , Conglomerate
Your Answer Horizontal , Vertical , Financial
Multiple Choice Single Answer*Question -Tender offers can be afforded by firms with :-Correct Answer A large amount of financial Slack
Your Answer A large amount of financial Slack
Multiple Choice Single Answer*Question -The following method of valuation is used for listed companies
that have an active market for their shares :-Correct Answer Market value approach
Your Answer Market value approach
Select The Blank*Question -According to Altman (1984) total costs in percentage of the
market value of a firm range between ________Correct Answer 12.1 % & 16.7 %
Your Answer 12.1 % & 16.7 %
Multiple Choice Single Answer*Question -Conservative policy for determining the requirements of current
assets is also known as :-Correct Answer Flexible policy
Your Answer Aggressive policy
Multiple Choice Single Answer*Question -Yield or earning approach method of valuation uses :-Correct Answer Price to earnings ratio
Your Answer Price to earnings ratio
Multiple Choice Multiple Answer*Question -The main categories of organisational elements are :-Correct Answer Managerial , Support , Operational
Your Answer Managerial , Partly functional , Operational
Select The Blank*Question -The ________ cost tier has the advantage of being the simplest
to calculate and justify.Correct Answer Direct
Your Answer Direct
Multiple Choice Multiple Answer*Question -The existence of significant influence by an investor is usually
evidenced in the following ways :-Correct Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Your Answer Participation in policy making processes , Material transactions
between the investor & the investee , Interchange of managerial
personnel
Multiple Choice Single Answer*Question -Free Reserves is a component of :-Correct Answer Equity
Your Answer Equity
Match The Following*Question -Correct Answer Your Answer
Sentiments and rumours No fundamental basis. No effect on valuation
Unlisted shares on stock
exchange
Difficult to estimate the
price
Invalid valuation of shares
Manipulation of stock
markets
Invalid valuation of shares Easy to estimate the price
Selective information Valuation by various
people on information
available
Valuation by various
people on information
available
True/False*Question -Only firms with a large amount of financial slack can afford
tender offers.Correct Answer True
Your Answer True
Select The Blank*Question -Buy back through book building the process should be made
through ________.Correct Answer An electronically linked transparent facility
Your Answer Through brokers
Multiple Choice Multiple Answer*Question -For M & As, the acquiring firm needs industry data on :-Correct Answer Market growth , Nature of competition , Degree of regulation
Your Answer Market growth , Marketing capabilities , Nature of competition
True/False*Question -The chance of bankruptcy is small when the leverage of a firm is
small.Correct Answer True
Your Answer False
True/False*Question -A change in the method of depreciation is treated as a change in
an accounting policy and is disclosed accordingly.Correct Answer True
Your Answer True
Select The Blank*Question -Economies of scale arises with increase in volume of production
leading to________.Correct Answer Reduction in the cost of production
Your Answer Reduction in the cost of production
True/False*Question -Arbitrage process implies that security cannot sell at different
prices.Correct Answer True
Your Answer True
Select The Blank*Question -Capital gains are taxed at ________.Correct Answer Preferentially lower rate
Your Answer Acquisition price
Multiple Choice Single Answer*Question -Net period - no cash discount means :-Correct Answer The seller only specifies the time period allowed for the payment
Your Answer Cash on delivery of goods
True/False*Question -A long term investment is an investment other than a current
investment.Correct Answer True
Your Answer True
Multiple Choice Single Answer*Question -Accounting standards (AS - 17) has come into effect in respect
of accounting periods commencing :-Correct Answer On or after 01.04.2001
Your Answer Prior to 01.04.2001
True/False*Question -Accounting standards (AS - 13) is now mandatory.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer*Question -Valuation methods are highly specific to the following for doing
the valuation :-Correct Answer To the person , To the firm , To the Consultant
Your Answer To the person , To the firm , To the Consultant
Select The Blank*Question -________ Assets in the balance sheet are normally excluded
from the value of total assets.Correct Answer Intangible
Your Answer Tangible
Multiple Choice Multiple Answer*Question -The budgetary records are useful for:-Correct Answer Validating accounting costs , Providing a rationale for division of
costs , Replacing missing data
Your Answer Validating accounting costs , Allocating indirect costs into
different cost centres , Providing a rationale for division of costs
Multiple Choice Multiple Answer*Question -As per the new sections of the company's act, funds out of which
buy back may be financed include :-Correct Answer Free reserves of the company , Securities premium account ,
Proceeds of any shares or other specified securities
Your Answer Loans taken from banks and financial institutions , Free reserves
of the company , Securities premium account
Match The Following*Question -Correct Answer Your Answer
PpH = P / H ( C + B ) / P
SPE = R / H (C + B ) / R
RR = (C + B ) / R P / H
U % = R / ( C + B ) R / ( C + B )
Multiple Choice Multiple Answer*Question -Due to diversification employees seek:-Correct Answer Job security , Better opportunities within the firm , Higher
compensation
Your Answer Job security , Better opportunities within the firm , More perks &
benefits
Select The Blank*Question -In today's fast moving world, the quickest way to get information
on a firm is through ________.Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer*Question -It is often not possible to directly attribute, or reasonably allocate
:-Correct Answer The interest bearing liabilities to segments
Your Answer Goodwill
True/False*Question -Odd lots purchase is not a method of buy back of shares.Correct Answer False
Your Answer True
Saturday, March 7, 2009
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer*Question -A normal firm shows the following characteristics :-Correct Answer No unique optimum payout ratio , Market value per share
unaffected by the payout ratio , All dividend policies are similar
Your Answer No unique optimum payout ratio , Market value per share
unaffected by the payout ratio , All dividend policies are similar
Multiple Choice Single Answer*Question -One of the bases for determining the residual value of similar
assets is :-Correct Answer Realizable value
Your Answer Net operational value
Multiple Choice Multiple Answer*Question -If a firm diversifies managerial teams formed can be shifted from
unproductive activities to productive ones which leads to :-Correct Answer Improved profitability , Continuity , Growth of the firm
Your Answer Improved profitability , Continuity , Growth of the firm
Multiple Choice Single Answer*Question -Segment liabilities do not include :-Correct Answer Borrowings & other liabilities that are incurred for financing rather
than operating purpose
Your Answer Other payables
Multiple Choice Single Answer*Question -As per Pecking order theory, which is the costliest means of
funding :-Correct Answer Equity Shares
Your Answer Secured debt
Select The Blank*Question -Cost of ________ is more than other sources for raising short -
term finance.Correct Answer Bank finance
Your Answer Commercial paper
Multiple Choice Multiple Answer*Question -Operating economies occur due to indivisibilities of resources
like :-Correct Answer People , Equipment , Overheads
Your Answer People , Equipment , Overheads
True/False*Question -If a company has resorted to buyback its shares, it cannot make
a further issue of the same kind of securities within a period of 1
year.Correct Answer False
Your Answer True
True/False*Question -In value of assets approach for computation of valuation of
shares, the total value of all the assets will be divided by the total
number of shares.Correct Answer True
Your Answer True
Multiple Choice Single Answer*Question -Short term sources of funds include :-Correct Answer Current Liabilities
Your Answer Term loans
Multiple Choice Single Answer*Question -Investment decisions are mainly concerned with :-Correct Answer Assets
Your Answer Assets
Multiple Choice Multiple Answer*Question -Debt reduces :-Correct Answer Agency cost of free cash flow , Commitment to pay in time to all
lenders , Freedom of decisions
Your Answer Agency cost of free cash flow , Commitment to pay in time to all
lenders , Freedom of decisions
Multiple Choice Multiple Answer*Question -The main theories behind share repurchases are :-Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis ,
Information or signalling hypothesis
Your Answer Dividend or personal taxation hypothesis , Leverage hypothesis ,
Information or signalling hypothesis
Select The Blank*Question -The cost of facilities is usually included & distributed as
________.Correct Answer Depreciation
Your Answer Fringe benefits
Multiple Choice Multiple Answer*Question -Investments having no physical existence includes :-Correct Answer Shares , Debentures , Bonds
Your Answer Bonds , Shares , Debentures
Multiple Choice Multiple Answer*Question -An investment property is an investment in land or buildings :-Correct Answer Not intended to be occupied substantially for use by investing
enterprise , Not intended to be in the operations of the investing
enterprise
Your Answer Not intended to be occupied substantially for use by investing
enterprise , Not intended to be in the operations of the investing
enterprise
Multiple Choice Single Answer*Question -If a firm opts for restrictive policy then the investments in current
assets is :-Correct Answer Low
Your Answer Moderate
True/False*Question -According to NOI Approach, any capital structure is optimum.Correct Answer True
Your Answer True
Select The Blank*Question -Segment assets are ________.Correct Answer Directly attributable to the segment
Your Answer Indirectly attributable to the segments
Match The Following*Question -Correct Answer Your Answer
Free cash flow theory Enormous conflicts of
interest between
Stakeholders and
shareholders
Many groups of non -
investor stakeholders have
an interest in the firm
Net income approach Cost of debt & equity do
not change with a change
in leverage ratio
Enormous conflicts of
interest between
Stakeholders and
shareholders
Net operating income
approach
The overall capitalization
rate remains constant for
all levels of financial
leverages
Firms have preferences by
choosing a way to finance
their projects
Modigliani - Miller Theory weighted average cost of
capital does not change
with a change in the
proportion of debt to
equity in the capital
structure
Cost of debt & equity do
not change with a change
in leverage ratio
Select The Blank*Question -The processes to be identified & focused should to be on the
basis of not adhering to benchmarks, bottlenecks, quality not
met, time problems etc. This is called as ________.Correct Answer Process analysis
Your Answer Process analysis
Multiple Choice Multiple Answer*Question -The main characteristics of operating economies are :-Correct Answer It is achieved through horizontal, vertical and conglomerate
mergers , It occurs due to indivisibilities of resources , It is
possible in generic management functions
Your Answer Vertical integration has no connection with operating economies
, It is achieved through horizontal, vertical and conglomerate
mergers , It occurs due to indivisibilities of resources
Multiple Choice Single Answer*Question -usually the `controlling block' tends to be between :-Correct Answer 20 & 40 percent
Your Answer 10 & 30 percent
Multiple Choice Multiple Answer*Question -The 3 groups of participants in a firm are :-Correct Answer Suppliers of equity , Debt suppliers , Firm Managers
Your Answer Suppliers of equity , Debt suppliers , Firm Managers
Multiple Choice Single Answer*Question -Human Assets accounting stands for :-Correct Answer Measurement & reporting of the cost and value of people as
organisational resources
Your Answer Calculation of wages paid to casual workers
Multiple Choice Single Answer*Question -Profitability of a company depends upon :-Correct Answer Cost of capital
Your Answer Debt equity ratio
Select The Blank*Question -Horizontal mergers involves firms________.Correct Answer That operate & compete in a similar kind of business
Your Answer With a new & different entity
Match The Following*Question -Correct Answer Your Answer
Availability of funds in the
market
Cost of funds depends on
this factor
Different costs are involved
Flexibility The extent & the ease
with which the funds can
be raised & paid back are
very important
The extent & the ease with
which the funds can be
raised & paid back are very
important
Time Takes less time to take an
overdraft from the bank
Takes less time to take an
overdraft from the bank
Creditworthiness of the
issuer
If a company has a good
creditworthiness it is not
difficult to raise short term
funds
If a company has a good
creditworthiness it is not
difficult to raise short term
funds
Multiple Choice Multiple Answer*Question -A firm's current assets include :-Correct Answer Marketable securities , Receivables , Inventory
Your Answer Marketable securities , Receivables , Inventory
Select The Blank*Question -If a segment is not designated as a ________ it should be
included as an unallocated reconciling item.Correct Answer Reportable segment
Your Answer Operating segment
Select The Blank*Question -An asset is included in segment assets, if and only if the related
depreciation or amortisation is included in ________.Correct Answer Segment expense
Your Answer Segment liability
True/False*Question -Trade credit creates book debts which the firm is expected to
collect in the near future.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer*Question -Long term financing strategy is used by a firm to meet :-Correct Answer Fixed assets requirements , Permanent working capital
requirements , Portion of fluctuating working capital requirement
Your Answer Fixed assets requirements , Permanent working capital
requirements
Multiple Choice Single Answer*Question -Debt is often issued at :-Correct Answer The head office level
Your Answer The head office level
True/False*Question -Determination of residual value of an asset is normally a difficult
matter.Correct Answer True
Your Answer False
Multiple Choice Single Answer*Question -Which of the following systems identifies each of the
organizational elements of the traditional bureaucratic structure
and applies the identifiable costs of that element accordingly?Correct Answer Organization element accounting
Your Answer Budgetary accounting
Multiple Choice Single Answer*Question -Segment result represents :-Correct Answer Operating profit or loss
Your Answer Net of financing profit or loss
Multiple Choice Single Answer*Question -Which of the following is NOT a disadvantage of deferred
payment plan to the acquiring firm?Correct Answer There is built - in cushion to the acquiring firm as total payment
is not made at the time of acquisition
Your Answer There is built - in cushion to the acquiring firm as total payment
is not made at the time of acquisition
Select The Blank*Question -The resource theory considers that the competitive position of a
firm depends on its ________ Assets.Correct Answer Specific
Your Answer Intangible
True/False*Question -Short term financing is meant for funding working capital of a
company.Correct Answer True
Your Answer False
True/False*Question -Money becomes less valuable when received at a latter stage
instead of in present time.Correct Answer True
Your Answer False
True/False*Question -The intellectual assets of a company are often worth 3 or 4 times
the tangible book value.Correct Answer True
Your Answer True
Multiple Choice Single Answer*Question -One of the selective developments that has taken place in recent
times is companies are going in for :-Correct Answer Activity based costing and management
Your Answer Activity based costing and management
Multiple Choice Multiple Answer*Question -The financial managers of a company consume a great deal of
their time in activities like :-Correct Answer Monitoring the investment in inventories , Negotiating favourable
credit terms , Administrating Accounts receivables
Your Answer Monitoring the investment in inventories , Negotiating favourable
credit terms , Defining a proper strategy for product promotion
Select The Blank*Question -If total external revenue attributable to reportable segments
constitutes less than ________ of the total enterprise revenue
additional segments should be identified as reportable
segments.Correct Answer 75 percent
Your Answer 50 percent
True/False*Question -A single organisation model serves to keep all individual
initiatives to be targeted into a co-ordinated plan.Correct Answer True
Your Answer True
True/False*Question -Valuation of current investments on overall basis is not
considered appropriate.Correct Answer True
Your Answer True
Friday, January 23, 2009
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False*Question -Accounting standards (AS - 13) is now mandatory.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer*Question -Exit costs are classified into 3 categories namely :-Correct Answer Lost efficiency prior to separation , Job vacancy cost during the new
search , Termination pay
Your Answer Job vacancy cost during the new search , Termination pay ,
Recruiting new employee as a replacement of the left employee
Multiple Choice Multiple Answer*Question -A firm's current assets include :-Correct Answer Marketable securities , Receivables , Inventory
Your Answer Marketable securities , Receivables , Inventory
Multiple Choice Multiple Answer*Question -In a merger decision, the value of a firm depends upon:-Correct Answer Earnings , Operating characteristics of acquiring firm , Financial
characteristics of acquiring firm
Your Answer Earnings , Manpower of the acquiring firm , Financial characteristics
of acquiring firm
Multiple Choice Multiple Answer*Question -A company is permitted to buy back its shares through stock
exchange in the following situations :-Correct Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , The
buy back shall be made only on stock exchanges with electronic
trading facility
Your Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , It is
not mandatory to specify the maximum price at which the buy back
will be made
True/False*Question -A merger will make sense to the acquiring firm if its shareholders
benefit.Correct Answer True
Strategic Finance II Page 2 of 8
Your Answer True
Select The Blank*Question -________ Assets in the balance sheet are normally excluded from
the value of total assets.Correct Answer Intangible
Your Answer Intangible
Multiple Choice Single Answer*Question -What is a very important factor in any kind of merger?Correct Answer Exchange ratio
Your Answer Pre merger price
Select The Blank*Question -A shareholder expects a higher rate of return as a firm's
compensation for ________.Correct Answer Increased risk
Your Answer Investment in projects to improve prestige or power
True/False*Question -Usually cost data is perfect for ABC Analysis & distribution.Correct Answer False
Your Answer True
Select The Blank*Question -Forward or backward integration is a characteristic of ________.Correct Answer Vertical Mergers
Your Answer Vertical Mergers
Multiple Choice Single Answer*Question -Segment assets are determined after :-Correct Answer Deducting related allowances / provisions reported as direct offsets
Your Answer Deducting income tax assets
Multiple Choice Single Answer*Question -Acceptable audit requirements cannot be overlooked even under the
pressure of :-
Strategic Finance II Page 3 of 8Correct Answer Timeliness & turnaround
Your Answer Mergers & acquisitions
Multiple Choice Single Answer*Question -Which of the following is NOT a disadvantage of deferred payment
plan to the acquiring firm?Correct Answer There is built - in cushion to the acquiring firm as total payment is not
made at the time of acquisition
Your Answer Freedom of operation to the management of the newly acquired firm
True/False*Question -A single organisation model serves to keep all individual initiatives to
be targeted into a co-ordinated plan.Correct Answer True
Your Answer True
True/False*Question -Assets held as stock - in - trade are also investments.Correct Answer False
Your Answer True
Multiple Choice Single Answer*Question -In an aggressive approach :-Correct Answer There is a very large risk of shortage of funds
Your Answer There is a very large risk of shortage of funds
True/False*Question -Organisational changes are similar to mission changes.Correct Answer True
Your Answer False
Multiple Choice Multiple Answer*Question -The internal staffing performance indicators are :-Correct Answer Sales per employee , Recovery rate , Utilization %
Your Answer Sales per employee , Recovery rate , Utilization %
Select The Blank
Strategic Finance II Page 4 of 8*Question -The most popular kind of dividend policy is one that pays a
________.Correct Answer Regular, steady dividend
Your Answer Regular, steady dividend
Match The Following*Question -Correct Answer Your Answer
Amount involved in buy
back
Not to exceed 25 % of the
total paid up capital
Not to exceed 25 % of the
total paid up capital
Articles of Association Authorize buy back of
securities
Resolution permitting the
buy back of shares
Board of Directors Resolution permitting the
buy back of shares
Authorize buy back of
securities
Shares to be bought back Fully paid up Fully paid up
Multiple Choice Single Answer*Question -A good accounting system does NOT have the characteristics such
as :-Correct Answer Does not cover decisions over the life cycle
Your Answer Takes into account time as an important parameter
Multiple Choice Single Answer*Question -Fixed price tender offers are accompanied by an abnormal
announcement period return of :-Correct Answer 8 - 10 %
Your Answer 6 - 8 %
Multiple Choice Multiple Answer*Question -The external staffing performance indicators include :-Correct Answer Compensation per Re. Profit , Personnel services head count , Profit
per head
Your Answer Compensation per Re. Profit , Personnel services head count ,
Recovery rate
Match The Following*Question -Correct Answer Your Answer
Trust receipt Specifically identified by
serial number or other
means
Specifically identified by
serial number or other
means
Terminal warehouse receipt Inventory is stored with a
public or terminal
Inventory is stored with a
public or terminal
Strategic Finance II Page 5 of 8
warehousing company warehousing company
Floating lien Loose arrangement as the
lender may find it difficult to
police
Well suited for financial
good inventories of capital
goods
Chattel mortgage Well suited for financial
good inventories of capital
goods
Affords a higher degree of
control over the collateral
Select The Blank*Question -In today's fast moving world, the quickest way to get information on a
firm is through ________.Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer*Question -Companies often need to value its own :-Correct Answer Shares
Your Answer Shares
Multiple Choice Multiple Answer*Question -Long term financing strategy is used by a firm to meet :-Correct Answer Fixed assets requirements , Permanent working capital requirements
, Portion of fluctuating working capital requirement
Your Answer Fixed assets requirements , Permanent working capital requirements
True/False*Question -For determining exchange ratio, the model developed by Conn &
Nielson is used.Correct Answer True
Your Answer True
Select The Blank*Question -usually credit lines are established for a period of ________.Correct Answer 1 year
Your Answer 3 years
Multiple Choice Multiple Answer*Question -Shortcomings of accounting numbers consist of the following :-
Strategic Finance II Page 6 of 8Correct Answer Firms use different kind of accounting methods , Business risk and
financial risk do not have any influence on accounting numbers
Your Answer Dividend policy has lot of influence on accounting numbers ,
Business risk and financial risk do not have any influence on
accounting numbers , There is a serious relationship between
economic value and profit
Select The Blank*Question -Investors can reduce the company related risk by diversification of
their investments in ________.Correct Answer Shares of a large number of companies
Your Answer Mutual funds
True/False*Question -Making decision on dividend is a very crucial area of financial
management for a firm.Correct Answer True
Your Answer True
Multiple Choice Single Answer*Question -The following is not a factor for reduction in the life of an asset by
obsolescence :-Correct Answer No study of market demand for a product / service
Your Answer Legal restrictions
Multiple Choice Multiple Answer*Question -Due to diversification employees seek:-Correct Answer Job security , Better opportunities within the firm , Higher
compensation
Your Answer Job security , Better opportunities within the firm , More perks &
benefits , Higher compensation
Multiple Choice Single Answer*Question -Research into true human resources accounting began in :-Correct Answer 1960`s
Your Answer 1994
Select The Blank*Question -Segment assets are ________.Correct Answer Directly attributable to the segment
Your Answer Directly attributable to the segment
Strategic Finance II Page 7 of 8
True/False*Question -AS 13 statement does not deal with operating or finance leases.Correct Answer True
Your Answer True
Select The Blank*Question -The costs should be gathered & allocated within the organisation at
the ________ structural layer.Correct Answer Lowest possible
Your Answer Lowest possible
Multiple Choice Single Answer*Question -Value implies that something has :-Correct Answer Worth
Your Answer Worth
Multiple Choice Multiple Answer*Question -Examples of accounting methods used by firm are :-Correct Answer FIFO , LIFO , Accrual Accounting
Your Answer FIFO , LIFO , Accrual Accounting
Multiple Choice Multiple Answer*Question -The main assumptions for stock repurchase models are as follows :-Correct Answer The market is efficient , There is perfect competition in the securities
market
Your Answer The market is efficient , Offers are minimum limit offers. , Investors
are not very keen to maximize the value of their investment
Multiple Choice Multiple Answer*Question -As a general rule, an asset is :-Correct Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
Your Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
True/False*Question -It is easy to find a risk free security.Correct Answer False
Strategic Finance II Page 8 of 8
Your Answer False
Multiple Choice Single Answer*Question -The earning power of the company approach includes :-Correct Answer Mainly discounting of all future earnings
Your Answer Mainly discounting of all future earnings
Select The Blank*Question -During the costing process, we look at ________.Correct Answer Resource consumption
Your Answer Resource consumption
Select The Blank*Question -Mature companies with stable earnings generally pay out ________.Correct Answer A high proportion of earnings
Your Answer A high proportion of earnings
True/False*Question -Accounting standards (AS - 13) is now mandatory.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer*Question -Exit costs are classified into 3 categories namely :-Correct Answer Lost efficiency prior to separation , Job vacancy cost during the new
search , Termination pay
Your Answer Job vacancy cost during the new search , Termination pay ,
Recruiting new employee as a replacement of the left employee
Multiple Choice Multiple Answer*Question -A firm's current assets include :-Correct Answer Marketable securities , Receivables , Inventory
Your Answer Marketable securities , Receivables , Inventory
Multiple Choice Multiple Answer*Question -In a merger decision, the value of a firm depends upon:-Correct Answer Earnings , Operating characteristics of acquiring firm , Financial
characteristics of acquiring firm
Your Answer Earnings , Manpower of the acquiring firm , Financial characteristics
of acquiring firm
Multiple Choice Multiple Answer*Question -A company is permitted to buy back its shares through stock
exchange in the following situations :-Correct Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , The
buy back shall be made only on stock exchanges with electronic
trading facility
Your Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , It is
not mandatory to specify the maximum price at which the buy back
will be made
True/False*Question -A merger will make sense to the acquiring firm if its shareholders
benefit.Correct Answer True
Strategic Finance II Page 2 of 8
Your Answer True
Select The Blank*Question -________ Assets in the balance sheet are normally excluded from
the value of total assets.Correct Answer Intangible
Your Answer Intangible
Multiple Choice Single Answer*Question -What is a very important factor in any kind of merger?Correct Answer Exchange ratio
Your Answer Pre merger price
Select The Blank*Question -A shareholder expects a higher rate of return as a firm's
compensation for ________.Correct Answer Increased risk
Your Answer Investment in projects to improve prestige or power
True/False*Question -Usually cost data is perfect for ABC Analysis & distribution.Correct Answer False
Your Answer True
Select The Blank*Question -Forward or backward integration is a characteristic of ________.Correct Answer Vertical Mergers
Your Answer Vertical Mergers
Multiple Choice Single Answer*Question -Segment assets are determined after :-Correct Answer Deducting related allowances / provisions reported as direct offsets
Your Answer Deducting income tax assets
Multiple Choice Single Answer*Question -Acceptable audit requirements cannot be overlooked even under the
pressure of :-
Strategic Finance II Page 3 of 8Correct Answer Timeliness & turnaround
Your Answer Mergers & acquisitions
Multiple Choice Single Answer*Question -Which of the following is NOT a disadvantage of deferred payment
plan to the acquiring firm?Correct Answer There is built - in cushion to the acquiring firm as total payment is not
made at the time of acquisition
Your Answer Freedom of operation to the management of the newly acquired firm
True/False*Question -A single organisation model serves to keep all individual initiatives to
be targeted into a co-ordinated plan.Correct Answer True
Your Answer True
True/False*Question -Assets held as stock - in - trade are also investments.Correct Answer False
Your Answer True
Multiple Choice Single Answer*Question -In an aggressive approach :-Correct Answer There is a very large risk of shortage of funds
Your Answer There is a very large risk of shortage of funds
True/False*Question -Organisational changes are similar to mission changes.Correct Answer True
Your Answer False
Multiple Choice Multiple Answer*Question -The internal staffing performance indicators are :-Correct Answer Sales per employee , Recovery rate , Utilization %
Your Answer Sales per employee , Recovery rate , Utilization %
Select The Blank
Strategic Finance II Page 4 of 8*Question -The most popular kind of dividend policy is one that pays a
________.Correct Answer Regular, steady dividend
Your Answer Regular, steady dividend
Match The Following*Question -Correct Answer Your Answer
Amount involved in buy
back
Not to exceed 25 % of the
total paid up capital
Not to exceed 25 % of the
total paid up capital
Articles of Association Authorize buy back of
securities
Resolution permitting the
buy back of shares
Board of Directors Resolution permitting the
buy back of shares
Authorize buy back of
securities
Shares to be bought back Fully paid up Fully paid up
Multiple Choice Single Answer*Question -A good accounting system does NOT have the characteristics such
as :-Correct Answer Does not cover decisions over the life cycle
Your Answer Takes into account time as an important parameter
Multiple Choice Single Answer*Question -Fixed price tender offers are accompanied by an abnormal
announcement period return of :-Correct Answer 8 - 10 %
Your Answer 6 - 8 %
Multiple Choice Multiple Answer*Question -The external staffing performance indicators include :-Correct Answer Compensation per Re. Profit , Personnel services head count , Profit
per head
Your Answer Compensation per Re. Profit , Personnel services head count ,
Recovery rate
Match The Following*Question -Correct Answer Your Answer
Trust receipt Specifically identified by
serial number or other
means
Specifically identified by
serial number or other
means
Terminal warehouse receipt Inventory is stored with a
public or terminal
Inventory is stored with a
public or terminal
Strategic Finance II Page 5 of 8
warehousing company warehousing company
Floating lien Loose arrangement as the
lender may find it difficult to
police
Well suited for financial
good inventories of capital
goods
Chattel mortgage Well suited for financial
good inventories of capital
goods
Affords a higher degree of
control over the collateral
Select The Blank*Question -In today's fast moving world, the quickest way to get information on a
firm is through ________.Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer*Question -Companies often need to value its own :-Correct Answer Shares
Your Answer Shares
Multiple Choice Multiple Answer*Question -Long term financing strategy is used by a firm to meet :-Correct Answer Fixed assets requirements , Permanent working capital requirements
, Portion of fluctuating working capital requirement
Your Answer Fixed assets requirements , Permanent working capital requirements
True/False*Question -For determining exchange ratio, the model developed by Conn &
Nielson is used.Correct Answer True
Your Answer True
Select The Blank*Question -usually credit lines are established for a period of ________.Correct Answer 1 year
Your Answer 3 years
Multiple Choice Multiple Answer*Question -Shortcomings of accounting numbers consist of the following :-
Strategic Finance II Page 6 of 8Correct Answer Firms use different kind of accounting methods , Business risk and
financial risk do not have any influence on accounting numbers
Your Answer Dividend policy has lot of influence on accounting numbers ,
Business risk and financial risk do not have any influence on
accounting numbers , There is a serious relationship between
economic value and profit
Select The Blank*Question -Investors can reduce the company related risk by diversification of
their investments in ________.Correct Answer Shares of a large number of companies
Your Answer Mutual funds
True/False*Question -Making decision on dividend is a very crucial area of financial
management for a firm.Correct Answer True
Your Answer True
Multiple Choice Single Answer*Question -The following is not a factor for reduction in the life of an asset by
obsolescence :-Correct Answer No study of market demand for a product / service
Your Answer Legal restrictions
Multiple Choice Multiple Answer*Question -Due to diversification employees seek:-Correct Answer Job security , Better opportunities within the firm , Higher
compensation
Your Answer Job security , Better opportunities within the firm , More perks &
benefits , Higher compensation
Multiple Choice Single Answer*Question -Research into true human resources accounting began in :-Correct Answer 1960`s
Your Answer 1994
Select The Blank*Question -Segment assets are ________.Correct Answer Directly attributable to the segment
Your Answer Directly attributable to the segment
Strategic Finance II Page 7 of 8
True/False*Question -AS 13 statement does not deal with operating or finance leases.Correct Answer True
Your Answer True
Select The Blank*Question -The costs should be gathered & allocated within the organisation at
the ________ structural layer.Correct Answer Lowest possible
Your Answer Lowest possible
Multiple Choice Single Answer*Question -Value implies that something has :-Correct Answer Worth
Your Answer Worth
Multiple Choice Multiple Answer*Question -Examples of accounting methods used by firm are :-Correct Answer FIFO , LIFO , Accrual Accounting
Your Answer FIFO , LIFO , Accrual Accounting
Multiple Choice Multiple Answer*Question -The main assumptions for stock repurchase models are as follows :-Correct Answer The market is efficient , There is perfect competition in the securities
market
Your Answer The market is efficient , Offers are minimum limit offers. , Investors
are not very keen to maximize the value of their investment
Multiple Choice Multiple Answer*Question -As a general rule, an asset is :-Correct Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
Your Answer A good or a right that a firm owns in a determined moment ,
Prepayment adjustments , Capitalized expenses
True/False*Question -It is easy to find a risk free security.Correct Answer False
Strategic Finance II Page 8 of 8
Your Answer False
Multiple Choice Single Answer*Question -The earning power of the company approach includes :-Correct Answer Mainly discounting of all future earnings
Your Answer Mainly discounting of all future earnings
Select The Blank*Question -During the costing process, we look at ________.Correct Answer Resource consumption
Your Answer Resource consumption
Select The Blank*Question -Mature companies with stable earnings generally pay out ________.Correct Answer A high proportion of earnings
Your Answer A high proportion of earnings
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