SOLVED JAIIB COMBINED PAPER 26:
1. If a company issues bonus shares, the debt equity ratio will......
(i) Be be affected, (ii) Remain unaffected
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - b
2. DSCR does not show......
(i) Excess of current assets over current liabilities,
(ii) No. of times the value of fixed assets covers the amount of loan,
(iii) No. of times the company's earnings cover the payment of interest and repayment of principal of long debt
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
3. Tangible Net worth is calculated as follows......
a. Capital plus reserves
b. Capital plus reserves minus intangible assets
c. Capital plus fictitious assets plus reserves minus intangible assets
d. Capital plus reserve minus fictitious assets and intangible assets
Ans - d
4. Return on Investment can be improved by improving ......
(i) Margin, (ii) Turnover
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
5. Unsecured loans can generally be taken by the companies to the extent of ...... % of their net owned funds.
a. 15%
b. 20%
c. 25%
d. None of the above
Ans - a
6. Arrears of fixed cumulative dividends and the period for which they are in arrears will be shown as ......
a. Provision
b. Reserve
c. Contingent Liability
d. Current Liability
Ans - a
7. If a company revalues its assets, its net worth will not ......
(i) improve, (ii) remain same, (iii) positively affected
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
8. Window dressing of current ratio is not possible by...... (i) Overvaluing the inventory,
(ii) Depositing cash in hand in bank,
(iii) Converting cash into inventory
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
9. For a transport operator, a bus is ......
(i) Current asset, (ii) Fixed asset
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - b
10. If current ratio is above 2:1, it means that the firm ...... (i) Has very high investment in current assets,
(ii) Does not require working capital from the Bank,
(iii) Liquidity is very high
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
11. Working capital gap is not ......
(i) Current Assets less Current Liabilities,
(ii) Current Assets less Current Liabilities other than Bank Borrowings,
(iii) 75% of Current Assets
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
12. A company is forced to sell its product at Rs. 90 due to competition, which it had been selling at Rs.100 earlier. There is no change in the variable cost. Previously the Break even point units were 2000 and now 2667. What is the variable cost, if fixed cost is Rs. 80000/-?
a. Rs 60
b. Rs 50
c. Rs.40
d. Rs.30
Ans - a
(i) Be be affected, (ii) Remain unaffected
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - b
2. DSCR does not show......
(i) Excess of current assets over current liabilities,
(ii) No. of times the value of fixed assets covers the amount of loan,
(iii) No. of times the company's earnings cover the payment of interest and repayment of principal of long debt
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
3. Tangible Net worth is calculated as follows......
a. Capital plus reserves
b. Capital plus reserves minus intangible assets
c. Capital plus fictitious assets plus reserves minus intangible assets
d. Capital plus reserve minus fictitious assets and intangible assets
Ans - d
4. Return on Investment can be improved by improving ......
(i) Margin, (ii) Turnover
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
5. Unsecured loans can generally be taken by the companies to the extent of ...... % of their net owned funds.
a. 15%
b. 20%
c. 25%
d. None of the above
Ans - a
6. Arrears of fixed cumulative dividends and the period for which they are in arrears will be shown as ......
a. Provision
b. Reserve
c. Contingent Liability
d. Current Liability
Ans - a
7. If a company revalues its assets, its net worth will not ......
(i) improve, (ii) remain same, (iii) positively affected
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
8. Window dressing of current ratio is not possible by...... (i) Overvaluing the inventory,
(ii) Depositing cash in hand in bank,
(iii) Converting cash into inventory
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
9. For a transport operator, a bus is ......
(i) Current asset, (ii) Fixed asset
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - b
10. If current ratio is above 2:1, it means that the firm ...... (i) Has very high investment in current assets,
(ii) Does not require working capital from the Bank,
(iii) Liquidity is very high
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
11. Working capital gap is not ......
(i) Current Assets less Current Liabilities,
(ii) Current Assets less Current Liabilities other than Bank Borrowings,
(iii) 75% of Current Assets
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
12. A company is forced to sell its product at Rs. 90 due to competition, which it had been selling at Rs.100 earlier. There is no change in the variable cost. Previously the Break even point units were 2000 and now 2667. What is the variable cost, if fixed cost is Rs. 80000/-?
a. Rs 60
b. Rs 50
c. Rs.40
d. Rs.30
Ans - a