IC89 Mock Test Sample 1
Management Accounting helps organizations in planning, controlling, and decision-making by analyzing financial information. It covers budgeting, capital budgeting, profitability analysis, working capital management, and risk management. Financial management functions include accounting, treasury, and control functions. Different risks such as systematic risk, interest rate risk, business risk, and financial risk affect investments. Ratios like operating ratio and capital turnover ratio measure efficiency and profitability. Budget officers coordinate budget functions, while disclosure ensures transparency and efficient service. Capital budgeting methods include Payback Method, Discounted Cash Flow Method, and Internal Rate of Return Method. Deposits guaranteed by deposit insurance mainly include bank fixed deposits.
Q1. Which of the following is an example of Systematic risk?
a) Business risk
b) Financial risk
c) Interest Rate risk
d) Default risk
Q2. What are all the major functions of financial management?
a) Accounting functions
b) Control functions
c) Treasury management functions
d) All of the above
Q3. Which of the following is an example of application of working capital?
a) Dividend paid to shareholders
b) Funds from business operation
c) Long term borrowing
d) Sale of non-current assets
Q4. As per Directives for Investment in Alternative Investment Funds, investment should be:
a) Not more than 1 percent of fund size
b) Not more than 5 percent of fund size
c) Not more than 10 percent of fund size
d) Not more than 20 percent of fund size
Q5. Which funds target companies whose market capitalization is smaller?
a) Sector funds
b) Mid / Small-cap
c) Equity funds
d) Index funds
Q6. Which ratio is also called as Expense ratio?
a) Profitability ratio
b) Activity ratio
c) Operating ratio
d) Market test ratio
Q7. Which decision is another important area of financial management?
a) Procurement of funds
b) Allocation of funds
c) Raising of capital
d) Acquisition of funds
Q8. Under which section of the Companies Act, 1956 is disclosure required?
a) Section 210
b) Section 211
c) Section 212
d) Section 213
Q9. The exchange will draw money out of one party’s margin account through:
a) Futures contract
b) Open contract
c) Marking to market
d) Investment to market
Q10. Management Accounting provides invaluable services to management in:
a) Planning and controlling
b) Analysis and interpretation of finance
c) Supply of regular funds
d) All management functions
Q11. Which of the following is an example of Profitability ratios?
a) Cash ratio
b) Operating ratio
c) Global net premium
d) Acid test ratio
Q12. Which of the following is an objective of Disclosure?
a) Providing insurance to the public
b) Achieving transparency of operations
c) Provide effective and efficient service
d) All of the above
Q13. To coordinate and line up the various functions of Budget, who is responsible?
a) Agent
b) Budget officer
c) Manager
d) Chief Operating officer
Q14. The difference between bid and offer is called as?
a) Offer
b) Spread
c) Bid
d) Budget
Q15. Name the Securities specified during issuance of securities?
a) Securities with Embedded Derivatives
b) Securities with Fixed Coupon rate
c) Zero Coupon Rate
d) Securities for either subscription
Q16. How much percentage of funds under Regulation 3(a)?
a) 0.1
b) 0.15
c) Not less than 50%
d) Not less than 25%
Q17. Which risk arises when an otherwise profitable investment loses value?
a) Purchasing power risk
b) Business risk
c) Social or Regulatory risk
d) Financial risk
Q18. Under which method of capital budgeting is risk adjusted?
a) Pay back method
b) Rate of Return Original Investment Method
c) Discounted Cash Flow Method
d) Internal Rate of Return (IRR) Method
Q19. Which deposits are covered by a guarantee from Deposit Insurance?
a) Company Fixed Deposit
b) Bank Fixed Deposit
c) Corporate Fixed Deposit
d) Post Office Deposits
Q20. How is capital turnover ratio calculated?
a) Net sales / Working Capital
b) Net sales / Fixed assets
c) Net sales / Capital Employed
d) Net sales / Total assets
