All Free Management Sciences MCQs with Answers

• A. Foreign trade
• B. Foreign trade deficits
• C. Foreign trade surplus
• D. Trade surplus

Explanation: When a country imports more than it exports, it has a trade deficit because payments for imports exceed receipts from exports.

• A. Deposit cheque
• B. Distribution cost
• C. Short term treasury bills
• D. Short term capital cost

Explanation: Non-financial corporations commonly hold short-term Treasury bills as liquid financial securities for temporary investment and cash…

• A. Financial instruments
• B. Financial asset markets
• C. Physical asset markets
• D. Easy markets

Explanation: Financial asset markets trade claims such as bonds, mortgages, notes and stocks, whereas physical asset markets trade tangible goods and…

• A. Dollar bonds
• B. Euro deposits
• C. Eurodollar market deposits
• D. Euro bonds

Explanation: Eurodollar market deposits are U.S.-dollar deposits held in banks located outside the United States, regardless of the bank’s home…

• A. Market price
• B. Intrinsic price
• C. Extrinsic price
• D. Unstable price

Explanation: Intrinsic price or value is estimated from relevant information about a stock’s expected earnings, risk and cash flows, while market price…

• A. Rate of return
• B. Rate of exchange
• C. Rate of intrinsic stock
• D. Rate of extrinsic stock

Explanation: An investor’s risk tolerance influences the return required for accepting risk: more risk-averse investors generally demand a higher rate…

• A. Accrued liabilities
• B. Current liabilities
• C. Accumulated liabilities
• D. Non-current liabilities

Explanation: Accounts payable, accrued expenses and short-term notes payable are obligations normally due within the operating cycle or one year, so…

• A. Debt liabilities
• B. Preferred stock
• C. Hybrid stock
• D. Common liabilities

Explanation: Preferred stock has priority over common stock in receiving assets during liquidation, but it ranks below debt holders.

• A. Market values
• B. Book values
• C. Appreciated values
• D. Depreciated values

Explanation: Market value is the value established by buyers and sellers in the marketplace at a given time.

• A. Accumulated depreciation
• B. Depleted depreciation
• C. Accumulated appreciation
• D. Accumulated appreciation schedule

Explanation: Accumulated depreciation is the total depreciation recorded against a long-term depreciable asset from the date it was placed in service.

• A. Increased cash
• B. Decreased cash
• C. Increased liabilities
• D. Increased equity

Explanation: Purchasing short-term investments and fixed assets uses cash, so both transactions are investing cash outflows and reduce the company’s…

• A. Semiannual discounting
• B. Annual discounting
• C. Annual compounding
• D. Semiannual compounding

Explanation: When interest is calculated twice a year, the annual rate is applied through two compounding periods, which is called semiannual…

• A. Annuity return
• B. Deferred annuity return
• C. Nominal rate
• D. Semiannual discount rate

Explanation: The nominal rate is the quoted annual interest rate that is divided by the number of compounding periods to obtain the periodic rate.

• A. Extended life
• B. Perpetuity
• C. Deferred perpetuity
• D. Due perpetuity

Explanation: A perpetuity is an annuity whose payments continue indefinitely, effectively giving it an unlimited life.

• A. Hybrid stock
• B. Common liabilities
• C. Debt liabilities
• D. Preferred stock

Explanation: Preferred stock is a hybrid security because it has equity ownership features but usually provides fixed dividends similar to the fixed…

• A. Increases liabilities
• B. Increases equity
• C. Increases cash
• D. Decreases cash

Explanation: When a company issues bonds or stock for financing, it receives the proceeds in cash.

• A. Compounding
• B. Discounting
• C. Money value
• D. Stock valueCompare Business Loans

Explanation: Discounting is the process of converting a future cash flow into its present value by removing the effect of interest over time.

• A. Number of payment periods
• B. Number of investment
• C. Number of installments
• D. Number of premium received

Explanation: In time-value-of-money formulas, N denotes the total number of compounding or payment periods.

• A. Future value of perpetuity
• B. Present value of perpetuity
• C. Due perpetuity
• D. Deferred perpetuityHire An Accountant

Explanation: For a level perpetuity, the present value is found by dividing the constant payment by the interest rate, or PV = PMT ÷ r.

• A. Not shown on timeline
• B. Shown on timeline
• C. Multiplied on timeline
• D. Divided on timeline

Explanation: The periodic rate is placed on the timeline for each compounding or payment period, such as a monthly rate on a monthly timeline.