FIN 101 CBT Practice

Table of Contents

📘 FIN 101 CBT PRACTICE TEST – IMPORTANT INSTRUCTIONS

Take your time to read the instructions carefully before starting this test.

📝 Test Details

Total Questions: 40 questions

Time Allowed: 15 – 20 minutes

This gives you very few seconds per question, so manage your time wisely.

✅ If you can score at least 60%, you can be rest assured that you’ll ace THA 213 in the real exam.

PS:

In the actual GST exam, you’ll likely be asked between 40 – 60 questions.

⚠️ EXAM STRATEGY & TIPS

Do not rush into answering questions.
Don’t waste too much time on questions you don’t know — skip and move on.
Start with questions that don’t involve calculations to save time.
Always crosscheck your answers.
Don’t be in a hurry to submit — you’re not in a competition.
Don’t be scared — getting an A is very achievable.
Don’t be overconfident either — calm your blood, no be only you sabi book 😌.
If you have any complaints, corrections, or feedback, please use the comment box.

📊 GRADING SCALE

70 – 100 → A

60 – 69 → B

50 – 59 → C

45 – 49 → D

40 – 44 → E

0 – 39 → F

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Pos.	Name	Score	Duration
1	Hezekiah	65 %	13 minutes 42 seconds
2	Aish	63 %	8 minutes 8 seconds
3	Amidat	55.5 %	12 minutes 32 seconds
4	Elizabeth	51 %	11 minutes 5 seconds
5	Alex	45 %	8 minutes
6	Vincent	33 %	10 minutes 49 seconds

FIN 101

1 / 40

1. Liquidity of a firm is measured by its ability to meet __________ obligations.

A. Profit

B. Capital

C. Long-term

D. Short-term

2 / 40

2. Prepaid expenses are excluded when computing __________ ratio.

A. Current

B. Quick

C. Proprietary

D. Debt

3 / 40

3. A debenture is regarded as a __________ loan.

A. Long-term

B. Non-interest bearing

C. Temporary

D. Short-term

4 / 40

4. Working capital is the difference between current assets and __________.

A. Current liabilities

B. Long-term liabilities

C. Fixed assets

D. Capital

5 / 40

5. Banks require __________ as security for their loans.

A. Shares

B. Profits

C. Collateral

D. Dividends

6 / 40

6. The ideal current ratio is __________.

A. 3 : 1

B. 1 : 3

C. 1 : 1

D. 2 : 1

7 / 40

7. Cost of revenue from operations is equal to revenue from operations minus __________.

A. Closing inventory

B. Net profit

C. Purchases

D. Gross profit

8 / 40

8. Solvency ratios provide information about the firm’s __________ survival.

A. Immediate

B. Short-run

C. Medium-run

D. Long-run

9 / 40

9. The concept that money today is worth more than money tomorrow is known as __________.

A. Cost of capital

B. Time value of money

C. Value of money

D. Time money

10 / 40

10. A firm with current assets greater than current liabilities has __________ working capital.

A. Fictitious

B. Zero

C. Positive

D. Negative

11 / 40

11. Operating ratio relates operating cost to __________.

A. Net assets

B. Net revenue from operations

C. Capital employed

D. Gross profit

12 / 40

12. Proprietary ratio is calculated as shareholders’ funds divided by __________.

A. Current liabilities

B. Long-term debts

C. Total assets

D. Fixed assets

13 / 40

13. Share capital refers to money contributed by __________.

A. Employees

B. Shareholders

C. Creditors

D. Managers

14 / 40

14. Patents and copyrights fall under __________ assets.

A. Intangible

B. Current

C. Fixed tangible

D. Liquid

15 / 40

15. An increase in cash collected from debtors will __________ the current ratio.

A. Decrease

B. Eliminate

C. Distort

D. Improve

16 / 40

16. Dividend payable to ordinary shareholders is __________.

A. Compulsory

B. Guaranteed

C. Fixed

D. Variable

17 / 40

17. Quick ratio is also known as __________ ratio.

A. Solvency

B. Liquid

C. Current

D. Activity

18 / 40

18. Purchase of goods for cash will __________ the current ratio.

A. Eliminate

B. Not change

C. Reduce

D. Improve

19 / 40

19. Trade payables are classified as __________ liabilities.

A. Contingent

B. Current

C. Fixed

D. Long-term

20 / 40

20. The ratio that measures the relationship between liquid assets and current liabilities is __________.

A. Proprietary ratio

B. Current ratio

C. Debt-equity ratio

D. Quick ratio

21 / 40

21. Debt-equity ratio compares long-term debts with __________.

A. Shareholders’ funds

B. Fixed assets

C. Current assets

D. Total assets

22 / 40

22. Excessive liquidity may result in __________ profitability.

A. Stable

B. Unlimited

C. Lower

D. Higher

23 / 40

23. Current assets are expected to be realized within __________.

A. 6 months

B. 9 months

C. 2 years

D. 1 year

24 / 40

24. A higher quick ratio indicates better __________ position.

A. Activity

B. Liquidity

C. Solvency

D. Profitability

25 / 40

25. Debenture holders are regarded as __________ of the company.

A. Promoters

B. Managers

C. Creditors

D. Owners

26 / 40

26. Sale of goods for cash will improve the __________ ratio.

A. Proprietary

B. Debt-equity

C. Operating

D. Quick

27 / 40

27. The process of determining the present value of future cash flows is called __________.

A. Valuation

B. Capitalizing

C. Discounting

D. Compounding

28 / 40

28. Debt-equity ratio compares long-term debts with __________.

A. Shareholders’ funds

B. Current assets

C. Fixed assets

D. Total assets

29 / 40

29. Ordinary shareholders are regarded as the __________ owners of a business.

A. Legal only

B. Temporary

C. Real

D. Nominal

30 / 40

30. Current ratio is classified as a __________ ratio.

A. Liquidity

B. Profitability

C. Solvency

D. Activity

31 / 40

31. Ordinary shareholders usually have __________ rights.

A. Limited

B. Creditor

C. No

D. Voting

32 / 40

32. Inventory is classified as a __________ asset.

A. Intangible

B. Current

C. Fixed

D. Liquid

33 / 40

33. Short-term finance is usually available to businesses for a period not exceeding __________.

A. 5 years

B. 3 months

C. 1 year

D. 6 months

34 / 40

34. Payment to creditors using cash will generally __________ the current ratio.

A. Increase

B. Stabilize

C. Decrease

D. Cancel

35 / 40

35. The ratio used to measure the capital structure of a firm is the __________ ratio.

A. Current

B. Debt-equity

C. Quick

D. Operating

36 / 40

36. An overdraft permits a business to overspend its bank account up to an agreed limit.

A. False

B. True

37 / 40

37. Long-term solvency of a firm is measured by __________ ratios.

A. Activity

B. Solvency

C. Profitability

D. Liquidity

38 / 40

38. Hire purchase allows a business to acquire assets by __________.

A. Leasing without payment

B. Paying over a period

C. Paying cash immediately

D. Borrowing without interest

39 / 40

39. Credit purchase of goods will __________ current liabilities.

A. Stabilize

B. Increase

C. Reduce

D. Eliminate

40 / 40

40. The process of calculating future value of present money is known as __________.

A. Compounding

B. Depreciation

C. Amortization

D. Discounting

Your score is

FIN 101 CBT Practice