Correct Answer:
C. Current assets and current liabilities
It aims to maintain adequate liquidity while earning a return.
November 13, 2026 · Accounting and Finance MCQs, Financial Management & Analysis MCQs
Working capital management mainly deals with decisions about:
Related MCQs
The indirect method of preparing the cash flow from operating activities starts with:
A.
Cash received from customers
B.
Cash paid to suppliers
C.
Closing cash balance
D.
Profit before tax or net profit adjusted for non-cash items and working capital changes
Correct answer is:
D. Profit before tax or net profit adjusted for non-cash items and working capital changes
Do you agree with this answer?
Bank charges shown on the bank statement but not yet recorded in the cash book should be:
A.
Deducted from the cash book balance
B.
Added to the cash book balance
C.
Deducted from the bank statement balance
D.
Ignored until next year
Correct answer is:
A. Deducted from the cash book balance
Do you agree with this answer?
The benefit principle of taxation says that:
A.
Taxes should depend only on income
B.
Taxes should be equal for everyone
C.
Taxes should be paid according to the benefits received from government services
D.
Taxes should be avoided
Correct answer is:
C. Taxes should be paid according to the benefits received from government services
Do you agree with this answer?
Which of the following is an adjusting event after the reporting period?
A.
A fire destroying a warehouse after year end
B.
Announcement of a major acquisition after year end
C.
A fall in market value of investments caused by events after year end
D.
A court case settled after year end confirming an obligation that existed at the reporting date
Correct answer is:
D. A court case settled after year end confirming an obligation that existed at the reporting date
Do you agree with this answer?
Net working capital is calculated as:
A.
Total assets minus total liabilities
B.
Current assets plus current liabilities
C.
Current assets minus current liabilities
D.
Fixed assets minus long-term debt
Correct answer is:
C. Current assets minus current liabilities
Do you agree with this answer?
An unmodified (clean) audit opinion means that the financial statements:
A.
Are completely free of any error
B.
Prove that the entity is financially strong
C.
Give a true and fair view or present fairly, in all material respects
D.
Have been prepared by the auditor
Correct answer is:
C. Give a true and fair view or present fairly, in all material respects
Do you agree with this answer?
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