MCQ on Management of Cash and Marketable Securities: Check the below Financial and Strategic Management MCQ on Management of Cash and Marketable Securities with Answers Pdf free download. Financial and Strategic Management MCQ on Management of Cash and Marketable Securities Questions for Financial and Strategic Management with Answers were prepared based on the latest exam pattern. We have provided Financial and Strategic Management MCQ on Management of Cash and Marketable Securities with Answers to help students understand the concept very well. Students should practice CS Executive MCQ on Management of Cash and Marketable Securities Questions with Answers based on the latest syllabus.

MCQ on Management of Cash and Marketable Securities

1. NSZ Ltd. cash budget forewarns of a short-term surplus. Which of the following would be the appropriate action to be taken in such a situation?
(A) Increase debtors and stock to boost sales
(B) Purchase new fixed assets
(C) Repay long term loans
(D) All of the above

2. Which of the following will not affect the preparation of the cash budget?
(A) Loan is taken by the firm
(B) Proceeds from asset disposal
(C) Reduction in provision for doubtful debts
(D) Cash sales

3. Which of the following is least likely to be considered short-term marketable security?
(A) An original issue 30 years corporate bond with 1 year remaining until final maturity
(B) An original issue 30 years government bond with 1 year remaining until final maturity
(C) 90 days Treasury bill
(D) Short-term corporate debt instruments with 9 months original maturity

4. Which of the following will not appear in a Cash Budget?
(A) Machinery bought on hire purchase
(B) Depreciation of machinery
(C) Sales revenue
(D) Wages

5. The optimal balance of marketable securities held to take care of probable deficiencies in the firm’s cash account is referred to as the segment in the firm’s portfolio of short-term marketable securities.
(A) Ready cash
(B) Controllable cash
(C) Free cash
(D) Cash and cash equivalent

6. Cash management is a broad term used for collecting and managing cash. The speculative motive of holding cash refers to –
(A) Holding the cash to utilize it in internal projects
(B) Holding the cash for any future loss the company is expecting
(C) Holding the cash to avail of any future investment opportunity
(D) Holding the cash to utilize it for an international project

7. Which of the following is not true about a cash budget?
(A) A cash budget sets out all cash receipts and payments that a business expects to make over a period of time
(B) Cash budgets are usually prepared on a month-to-month basis
(C) Cash budgets show the expected bank balance at the end of the month
(D) Cash budgets include personal cash receipts and expenses

8. Non-cash transactions
(A) Form part of cash budget
(B) Do not form part of cash budget
(C) May or may not form part of cash budget
(D) I cannot say whether they are part of the cash budget

9. Which of the following would NOT lead to an increase in net cash flow?
(A) Larger sales volume
(B) Reduced materials costs
(C) Lower depreciation charge
(D) Higher selling price

10. Of the four costs shown below, which would not be included in the cash budget of an insurance firm?
(A) Depreciation of a fixed asset
(B) Commission paid to agents
(C) Office salaries
(D) Capital cost of a new computer

11. Companies hold the cash from time to time. Transaction motive of holding cash means
(A) Keeping a cash reserve for purchasing goods and services to balance out the cash inflows and outflow
(B) Keeping the cash for all the transactions made during a periodic term
(C) Keeping the cash for transactions mandatory for day to day activities
(D) Keeping the transactions for foreign trading

12. Which of the following statements most accurately describes the modern approach to cash management?
(A) Cash Management involves the efficient disbursement of cash
(B) Cash management involves the efficient collection and disbursement of cash
(C) Cash management involves the efficient processing, collection, and depositing of cash
(D) None of the above

13. The cash Budget statement shows the position of the business as one of the business period.
(A) Opening date
(B) Closing date
(C) Between the opening and closing date
(D) None of the above

14. Net profit + Non-cash expenditure =
(A) Cash profit
(B) Cash flow
(C) Out of cash
(D) Cash gross profit

15. Advantages of maintaining cash budgets would not include one of the following:
(A) Surplus cash can be put to more profitable uses if expected to occur
(B) Debtors can be paid more quickly
(C) Time is available to investigate the possible future sources of finance
(D) Overdrafts can be negotiated in advance of when they are needed

16. The term cash includes
(A) Cash and Bank Balances
(B) All the Current Assets
(C) All the Current Liabilities
(D) None of the above

17. Which of the following would be found in a cash budget?
(A) Capital expenditure
(B) Provision for doubtful debts
(C) Depreciation
(D) Accrued expenditure

18. While preparing the cash budget, which of the following items would not be included
(A) Interest paid to debenture holders
(B) Salaries and wages
(C) Bonus shares issued
(D) Income-tax paid

19. Working capital will not change if there is:
(A) Increase in current assets
(B) Payment to the creditors
(C) Decrease in current liabilities
(D) Decrease in current assets

20. Which of the following involves a movement of cash?
(A) A bonus issue
(B) A right issue
(C) Depreciation of fixed assets
(D) Provision for taxes

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