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Financial Management MCQs
Financial Management MCQs
Auditor Posts
The __________ specifies the financial decisions that result from your personal
financial planning.
(a) personal financial plan
(b) personal budget
(c) personal finance objective
(d) None of the above
Answer: a
Which of the following is the least likely way that you may benefit from having an
understanding of personal finance?
(a) Assessing the advice of financial advisers
(b) Becoming the president of a large national bank
(c) Making your own financial decisions
(d) Becoming a financial adviser
Answer: b
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Your __________ is (are) the value of what you own minus the value of what you owe.
(a) net assets
(b) budget
(c) net liabilities
(d) net worth
Answer: d
Having a __________ level of future wealth (from more savings) requires you to
sacrifice by having a __________ level of spending today.
(a) lower; lower
(b) higher; lower
(c) higher; higher
(d) None of these
Answer: b
__________ planning involves determining how much you should set aside each year
for retirement and how you should invest those funds in the short term.
(a) Tax
(b) Retirement
(c) Estate
(d) None of these
Answer: b
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Which of the following pieces of information will not be needed to ascertain the
break-even volume level?
(a) Selling price
(b) Variable cost per unit
(c) Total direct costs
(d) Fixed overheads
Answer: c
With fixed overheads at £16,000 per period, the variable cost at £7.50 per unit and
each unit sold for £10, we can infer that the break-even point is:
(a) 6,400 units
(b) 2,134 units
(c) 40,000 units
(d) 1,600 units
Answer: a
Which of the following would increase the level of output that needed to be sold to
reach break-even?
(a) Fixed overheads increased
(b) Higher sales
(c) Variable unit cost decreased
(d) Selling price increased
Answer: a
8. An increase in the value of a sunk cost would have which of the following effects
on investment appraisal calculations?
Which of the following would not be a benefit of adopting the balanced scorecard?
(a) Vision and strategy can be presented into a set of performance targets
(b) It helps links strategic objectives to the budgeting procedure
(c) People understand how they can contribute to the strategic success of the firm
(d) It creates gaps between the existing abilities of staff and the abilities required by staff
Answer: d
The number of units in excess of the break-even point is otherwise known as:
(a) Net contribution
(b) Area of profit
(c) Margin of safety
(d) Volume of production
Answer: c
An investment which gives the holder a regular income in return for one initial
payment may be known as a(n):
(a) Ordinary share
(b) Annuity
(c) Return
(d) Discount factor
Answer: b
With fixed overheads at £34,000 per period, the variable cost at £9 per unit and
each unit sold for £16 we can infer that the break-even point is:
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Auditor Tests
Which of the following is not a type of decision made to protect your assets and to
plan beyond your career?
(a) How much money to spend on stereo equipment
(b) How much insurance you need
(c) How much money you must save per year so that you can retire in a specific year
(d) How much money you will need for retirement
Answer: a
Which of the following is not a type of decision made to manage your liquidity?
(a) How much money you can borrow to spend on a car
(b) How much money you should maintain in your checking account
(c) Whether you should use credit cards as a means of borrowing money
(d) How much money you should maintain in your savings account
Answer: a
If your income exceeds the amount that you wish to spend, you should __________
your investments or __________ loans.
(a) reduce; repay existing
(b) increase; repay existing
(c) increase; obtain more
(d) reduce; obtain more
Answer: b
(a) The career choice is restricted to students who are just completing their education
(b) Many people change their career over time.
(c) A shift to a new career should be influenced by your views of what will satisfy you.
(d) All of the above are correct.
Answer: a
The financial plan of a person in a different financial position than yourself would
be
(a) the same as your financial plan.
(b) different from your financial plan.
(c) different from or the same as your financial plan, depending on the person’s financial
goals
(d) None of the above
Answer: c
When selecting the financial plan that will best enable you to achieve your goals,
you
(a) may choose a different financial plan than an individual in the same financial position
(b) should choose the same financial plan as an individual in the same financial position and
with the same financial goals.
(c) do not need to conduct an analysis of the alternative solutions that are available.
(d) None of the above
Answer: a
Which of the following is true regarding the revision of your financial plan?
(a) You need to revise the plan even if your financial condition is unchanged.
(b) Financial plans need not be revised to reflect changes in your financial position or your
goals.
(c) Your financial goals may have to be reduced if you are unable to maintain the plan for
achieving a particular level of wealth
(d) You need to revise the plan to make it more realistic even if you are able and willing to
follow the plan that you developed.
Answer: c
Which of the following probably would not be asked when considering your
financial position?
(a) What is your net worth?
(b) What are your intermediate-term financial goals?
(c) What is the value of your investments?
(d) How much money do you have in savings?
Answer: b
If you give something up as a result of making a decision, you are incurring a(n)
(a) opportunity cost
(b) net cost.
(c) liquidity problem.
(d) None of these
Answer: a
Financial advisers:
(a) often provide analyses of investments that are very conservative.
(b) may advise you to make investments that are designed to give them high commissions
(c) are always motivated to act in your best interests.
(d) are not useful for individuals with a limited background in financial planning.
Answer: b
Bill Peters receives a present salary of about $4,300 per month before taxes. Bill
pays $1,200 in monthly taxes. His monthly rent totals $1,000, and he incurs other
monthly household payments as follows: