Financial Accounting - Financial Accounting Multiple Choice Questions

56:  

Which one is the principle of capital structure?

A.

Cost principle

B.

Risk principle

C.

Control principle

D.

All of these

 
 

Option: D

Explanation :

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57:  
Match the following
List-I (Items)                                        List-II (Features)
(a) Capital budgeting decision     1. Fixed Assets
(b) Cash Position Ratio                 2. Liquid Ratio
(c) EOQ                                             3. Inventory Control
(d) Cost of Capital                          4. Issue Expenses
                                                           5. Planning
A.

(a)  (b)  (c)  (d)

 5     1     4    3

B.

(a)  (b)  (c)  (d)

 3     1     4    2

C.

(a)  (b)  (c)  (d)

 1     2     3    4

D.

(a)  (b)  (c)  (d)

 1     3     2     4

 
 

Option: C

Explanation :

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58:  

Match the following

List-I (Value)                   List-II (Nature/ Formula)
(a) Fair Value              1. (Market Value + Book Value)/2
(b) Book Value            2. Value given in Balance Sheet
(c) Economic Value   3. Present Value
(d) Intrinsic Value      4. Assets - Depreciation = Net Assets
                                      5. Cost Price
A.

(a) (b)  (c)  (d)

  1   2     3    4

B.

(a) (b)  (c)  (d)

  5    1    4    3

C.

(a) (b)  (c)  (d)

  3    1     4    2

D.

(a) (b)  (c)  (d)

  2    3    4    1

 
 

Option: A

Explanation :

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59:  
Which of the following is not a capital budgeting decision?
A.

Expansion programme

B.

Inventory level

C.

Replacement of an asset

D.

Merger

 
 

Option: B

Explanation :

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60:  
Which formula may be used for calculation of cost of Retained Earnings?
A. 14566
B. 14566
C. 14566
D. 14566
 
 

Option: C

Explanation :

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