International Financial Management MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on International Financial Management, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our International Financial Management MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of International Financial Management mcq questions that explore various aspects of International Financial Management problems. Each MCQ is crafted to challenge your understanding of International Financial Management principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our International Financial Management MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of International Financial Management. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your International Financial Management knowledge to the test? Let's get started with our carefully curated MCQs!

International Financial Management MCQs | Page 2 of 13

Discover more Topics under IC 89 Management Accounting

Q11.
Which policy led to India's integration with the international economy in the 1990s?

a.

Inward-looking foreign policy

b.

Closed economy policy

c.

Open economy policy

d.

Import restrictions policy

Discuss
Answer: (c).Open economy policy Explanation:India integrated its domestic economy with the international economy through the open economy policy in the 1990s.
Q12.
What setback did the opening up of the Indian economy face in 1997 & 1998?

a.

Political setback

b.

Economic setback

c.

Financial crisis

d.

Trade deficit

Discuss
Answer: (c).Financial crisis Explanation:The opening up of the Indian economy faced a serious setback in 1997 & 1998 due to the financial crisis that originated in the western world.
Q13.
In the Balance of Payments (BoP) accounting system, how many aspects does every transaction have?

a.

One

b.

Two

c.

Three

d.

Four

Discuss
Answer: (b).Two Explanation:The BoP accounting system follows a standard double-entry bookkeeping system, where every transaction has two aspects – one as a credit and the other as a debit.
Q14.
What is the logic behind the double-entry bookkeeping system in the BoP accounting?

a.

To complicate the accounting process

b.

To ensure every transaction has multiple aspects

c.

To simplify the accounting process

d.

To eliminate the need for debit and credit entries

Discuss
Answer: (b).To ensure every transaction has multiple aspects Explanation:The logic behind the double-entry bookkeeping system in the BoP accounting is to ensure that every transaction has two aspects – one as a credit and one as a debit.
Q15.
How is the balance maintained in the Balance of Payments (BoP) accounting?

a.

By eliminating transfer payments

b.

By treating transfer payments as trade in goods

c.

By balancing credit and debit entries

d.

By ignoring transfer payments

Discuss
Answer: (c).By balancing credit and debit entries Explanation:The BoP account always balances because for every credit entry, there is a corresponding debit entry. Transfer payments are treated as trade in goodwill to maintain this balance.
Q16.
How are credit transactions recorded in the BoP accounting?

a.

With a plus sign

b.

With a minus sign

c.

Without any sign

d.

With an asterisk

Discuss
Answer: (a).With a plus sign Explanation:Credit transactions in the BoP accounting are recorded with a plus sign.
Q17.
What is the impact on the BoP account when a country exports goods to another country?

a.

Credit entry

b.

Debit entry

c.

No impact

d.

Both credit and debit entries

Discuss
Answer: (a).Credit entry Explanation:When a country exports goods, it creates demand for the domestic currency, resulting in a credit entry in the BoP account.
Q18.
How does the BoP account represent imports in terms of currency flow?

a.

Credit entry

b.

Debit entry

c.

No impact

d.

Both credit and debit entries

Discuss
Answer: (b).Debit entry Explanation:Imports increase the supply of the domestic currency, leading to a debit entry in the BoP account as it represents a use of foreign currency.
Q19.
What are the three main components of the Balance of Payments (BOP) account?

a.

Goods, Services, and Capital

b.

Current Account, Capital Account, and Official Reserves

c.

Imports, Exports, and Unilateral Transfers

d.

Merchandise, Reserve Assets, and Freight

Discuss
Answer: (b).Current Account, Capital Account, and Official Reserves Explanation:The BOP account consists of the Current Account, Capital Account, and Official Reserves as its three main components.
Q20.
What transactions are recorded in the Current Account of the BOP?

a.

Changes in foreign assets and liabilities

b.

Imports and exports of goods and services

c.

Unilateral transfer of goods and services

d.

Changes in official reserves

Discuss
Answer: (b).Imports and exports of goods and services Explanation:The Current Account of the BOP records imports and exports of goods and services, as well as unilateral transfers of goods and services.
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