ACC501 QUIZ 1 SOLVED
1. ABC Inc, has net income of Rs 400,00. How much is kept as related earnings if the firm has a dividend payout ratio of 45%?
a) Rs 120,000
b) Rs 220,000
c) Rs 320,000
d) Rs 420,000
2. The most common application of term Finance involves raising money to acquire ____.
a) Land and Building
b) Machinery and Equipment
c) Inventory
d) All of the given options
3. ___ is occasionally called “return on net worth”.
a) Return on assets
b) Return on equity
c) Profit margin
d) Earnings per share
4. Which of the following statement is correct?
a) Less income will be available for taxation due to debt financing
b) More income will be available for taxation due to debt financing
c) There will be no effect on taxable income due to debt financing
d) None of the given options
5. Which one of the following statement measures performances over a specific period of time?
a) Income statement
b) Balance sheet
c) Cash Flow Statement
d) Retained Earning Statement
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6. The difference between current assets and current liabilities is known as:
a) Surplus Asset
b) Short-term Ratio
c) Working Capital
d) Current Ratio
7. If a firm uses cash to purchase inventory, its current ration will
a) Increase
b) Decrease
c) Remain unaffected
d) Become Zero
8. Which of the following formulas can be used to calculate simple interest?
a) Amount invested * rate of interest * time period
b) (Amount invested * rate of interest) / time period
c) Amount invested / (rate of interest * time period)
d) (Amount invested * time period) / rate of interest
9. Which of the following has “Limited liability” for business debts?
a) Sole proprietorship
b) General Partnership
c) Corporation
d) All of the given options
10. Which happens to current ratio if ABC Company Ltd. Purchases inventory on credit for Rs 10,000. Existing current ratio is 3:1.
a) Increases
b) Decreases
c) No effect
d) None of the given options
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