Accounting Online Test ( Part 6 )

We are taking our Nov. 2010's accounting tutorials for writing accounting online test (part 6). If you are not able to choose correct answer out of 4 options of any accounting question, you have facility to read the accounting tutorials in which that correct answer has been mentioned.

Question 1. Why are fixed assets financed out of long term funds?

(a) For reducing risk of interest rate

(b) For reducing risk of liquidity

(c) For reducing risk of foreign exchange

(d) For reducing risk of solvency

Reference for answer this multiple choice question :Significance of Financial Management

Question 2. Why do we invest in current asset at optimum level?

(a) Because over investment in current asset reduces return on investment.

(b) Because under investment in current asset reduces return on investment.


(c) Because both under and over investment in current asset reduces return on investment.


(d) Non of Above

Reference for answer this multiple choice question : Significance of Financial Management

Question 3.Which is Permanent Working Capital?

(a) Share Capital

(b) Minimum Cash and Bank Balance for doing business activities.

(c) Fixed Assets

(d) Excess of current assets over current liabilities.

Reference for answer this multiple choice question :Types of Working Capital

Question 4.Which is temporary working capital?

(a) Excess of payment of fixed assets over permanent working capital.

(b) Excess of  Fixed assets over fixed liabilities.

(c) Excess of cash inflows over cash outflows.

(d)Excess of inflows of fund over outflow of funds.

Reference for answer this multiple choice question : Types of Working Capital

Question 5.What is Residual Theory of dividend policy?

(a) According to this theory, the firm will only pay dividends from capital reserves.

(b)According to this theory, the firm will only pay dividends from residual earnings.

(c) According to this theory, the firm will only pay dividends from net profit.

(d) According to this theory, the firm will only pay dividends from old reserves.

Reference for answer this multiple choice question :Dividend Policy

Question 6. In which organizations will we make statement of activities?

(a) Corporate Organizations

(b) Partnership Firms

(c) NGOs

(d)Government Organisations

Reference for answer this multiple choice question :Statement of Activities

Question 7. What is Social Cost Benefit Analysis?

(a) It is analysis of work of poor and total payment to them.

(b) It means to analyze the social cost and total social benefits if we accept any project.

(c) It means to distribute the profit to society.

(d) It means to analyze government expenditures and incomes.

Reference for answer this multiple choice question :Social Cost Benefit Analysis

Question 8.When did LIC Housing's corporate loans scam happen?

(a) Nov. 2010

(b) Jan. 2010

(c) May 2010

(d) Sept. 2010

Reference for answer this multiple choice question :LIC Housing Share Price Decreased After Corporate Loans Scam

Question 9.What is overstated?

(a) Overstated is that amount which is recorded double of  correct amount in the account.

(b) Overstated is that amount which is equal correct amount in the account.

(c) Overstated is that amount which is less than correct amount in the account.

(d) Overstated is that amount which is more than correct amount in the account.

Reference for answer this multiple choice question :Meaning of Overstated

Question 10.What is the best definition of profit maximization?

(a) It means to reach at highest profit level where risk can be controlled.

(b) It means to reach at highest profit level where risk can not be controlled.

(c) It means to reach at highest profit level with in one day.

(d) It means to reach at highest profit level by doing anything legal or illegal.

Reference for answer this multiple choice question :What is the Best Definition of Profit Maximization

Related : Give Online Test of All the Parts of Accounting