Credit Management MCQs (Multiple Choice Questions) PDF Download - 30

Credit management is an important tool used by finance managers. Credit management means

1. Managing the cash of the organization for the operational activities
2. To lend money to the borrower for more than a year
3. Granting money on credit basis while considering all the terms on which it is being granted on and t
4. Managing the credit system

The company's ratios are compared with the industry's ratio to get a clear view about the company's performance. The recommended current ratio is

1. (1:3)
2. (3:1)
3. (1:2)
4. (2:1)

Equity theory focuses on two major factors i.e. internal equity and external equity. Internal equity would mean

1. The reward is equivalent to the effort made by the employee
2. Employee knows what he is expected to do
3. Employee knows what he is expected to do to get the reward
4. Is the reward equivalent to the other employees doing the same job?

There are four basic types of Bureaucratic Structures and organizations choose these structures in accordance with their needs. These Structures are

1. Functional Structure, product Structure, Customer Structure, Geographic Structure
2. Functional structure, Growth structure, Product structure, Customer structure
3. Sales structure, Product structure, Customer structure, Growth structure
4. Functional structure, Product structure, Customer structure, Geographic structure

Cash is the life blood of any business. Cash flow is defined as

1. The ability to pay off the bills on time
2. The system in which the cash is handled in an organization
3. A system in which cash is distributed among the departments
4. The ability to generate cash by utilizing the assets