Working Capital Management specifically deals with: MCQ with Answer and Explanation

Question
Working Capital Management specifically deals with:
A. Current assets and current liabilities
B. Fixed assets and long-term debt
C. Issuing new equity shares
D. Dividend payouts
Answer: Option A
Solution (By JKSSB Mock Tests)
It involves managing the relationship between a firm's short-term assets and its short-term liabilities to ensure adequate liquidity.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
A reserve created out of normal operating profits is called a:
A. Capital Reserve
B. Secret Reserve
C. Revenue Reserve
D. Specific Reserve
Discuss
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Correct Answer: Option C

Explanation:
Revenue reserves are built from day-to-day operational net profits and can be utilized for distributing dividends.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
S1: The Business Entity Concept assumes the business and its owners are the same. S2: The Money Measurement Concept ignores qualitative factors. Which statement(s) is/are correct?
A. S2 only
B. S1 only
C. Neither S1 nor S2
D. Both S1 and S2
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Correct Answer: Option A

Explanation:
S1 is incorrect because the Business Entity Concept treats the business and its owners as separate and distinct. S2 is correct as the Money Measurement Concept only records transactions expressible in monetary terms, ignoring qualitative aspects.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Price Earning' (P/E) ratio is calculated as:
A. Market price per share / Earnings per share
B. Market price / Book value
C. Earnings per share / Market price per share
D. Dividend / Market price
Discuss
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Correct Answer: Option A

Explanation:
P/E ratio indicates how much investors are willing to pay per rupee of earnings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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