In the name of ALLAH, the most beneficient, the most merciful

Business Finance (ACC501)

Multiple Choice Questions (MCQs)


Objective Questions


Which of the following form of business organization is least regulated?

  1. Sole proprietorship
  2. General Partnership
  3. Limited Partnership
  4. Corporation

Answer: 1 Chapter No. 2 


The conflict of interest between stockholders and management is known as:

  1. Agency problem
  2. Interest conflict
  3. Management conflict
  4. Agency cost

Answer: 1 Chapter No. 3 


Which of the following item provides the important function of shielding part of income from taxes?

  1. Inventory
  2. Supplies
  3. Machinery
  4. Depreciation

Answer: 4 Chapter No. 6 


If a firm uses cash to purchase inventory, its current ratio will:

  1. Increase
  2. Decrease
  3. Remain unaffected
  4. Become zero

Answer: 3 Chapter No. 8 


JJ Inc. has a 4 percent return on total assets of Rs. 500,000 and a net profit margin of 5 percent. Total sales for JJ Inc. would be :

  1. Rs. 150,000
  2. Rs. 200,000
  3. Rs. 250,000
  4. Rs. 400,000

Answer: 4 Chapter No. 10 


Which of the following terms refers to the use of debt financing?

  1. Operating Leverage
  2. Financial Leverage
  3. Manufacturing Leverage
  4. None of the given

Answer: 2 Chapter No. 10 


Time value of money is an important finance concept because:

  1. It takes risk into account
  2. It takes time into account
  3. It takes compound interest into account
  4. All of the given

Answer: 2 Chapter No. 12