Sources of Business Finance Test

Result

Sources of Business Finance Test - 26

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following is a merit of lease financing?

A
It enables the lessee to acquire the asset with a lower investment.

B
The risk of obsolescence is borne by the lesser.

C
The lease agreement does not affect the debt raising capacity of an enterprise

D
All of the above

Solution

Few merits of lease financing are: It enables the lessee to acquire the assets with low investment, the risk of obsolescence is borne by the lessor, the lease agreement does not affect the debt raising capacity of an enterprise.
Question 2
1 / -0

Cost of public deposits is generally _______ than the cost of borrowings from banks and financial institutions.

A
Higher

B
Lower

C
Equal

D
None of the above

Solution

The deposits that are raised by organisations directly from the public are known as public deposits. Cost of public deposits is generally lower than the cost of borrowings from banks and financial institutions.
Question 3
1 / -0

The acceptance of public deposits are regulated by the ______________.

A
Reserve Bank of India

B
State Bank of India

C
Central Government

D
State Governmnt

Solution

The deposits that are raised by organisations directly from the public are known as public deposits. The organization in return issues a deposit receipt as acknowledgement of the debt. The acceptance of public deposits are regulated by the Reserve Bank of India.
Question 4
1 / -0

The amount raised by commercial paper is generally very _______.

A
large

B
small

C
equal

D
both (a) and (b)

Solution

Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days. It is issued by one firm to another business firm. The amount raised by commercial papers is very large as the debt is totally unsecured.
Question 5
1 / -0

Companies generally invite public deposits for a period upto ________ years.

A
One

B
Two

C
Three

D
Four

Solution

The deposits that are raised by organisations directly from the public are known as public deposits. The organization in return issues a deposit receipt as acknowledgement of the debt. Public deposits can take care of both short-term or medium-term financial requirements. Companies generally invite public deposits for medium-term period upto three years.
Question 6
1 / -0

________ shares is the most important source of raising long term capital by a company.

A
Equity

B
Preference

C
Bonus

D
Right

Solution

Equity shares is the most important source of raising long term capital by a company.
Equity shares represent the ownership of the a company and thus is known as owner's capital or owner's funds. Equity share capital is the prerequisite before creation of a company.
Question 7
1 / -0

Commercial paper may vary from _____ days to ______ days.

A
90, 150

B
90, 300

C
90, 364

D
90, 363

Solution

Commercial paper emerged as a source of short-term finance in our country in the early nineties. Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days.
Question 8
1 / -0

The money raised by issue of preference shares is called as _________ share capital.

A
Equity

B
Preference

C
Right

D
Bonus

Solution

The capital raised by issue of preference shares is called as preference share capital. The preference share holders enjoy a preferential position over equity shareholder in receiving fixed dividend out of the net profits of the company and receiving capital at the time of liquidation.
Question 9
1 / -0

Commercial paper is an unsecured _________ note issued by the firm to raise funds for a short-term period.

A
Promissory

B
Debit

C
Credit

D
Sales

Solution

Commercial paper emerged as a source of short-term finance in our country in the early nineties. Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days.
Question 10
1 / -0

The regulation of commercial paper comes under the preview of the ____________.

A
Central Bank

B
Reserve Bank of India

C
State Government

D
Central Government

Solution

Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days. It is issued by one firm to another business firm, insurance companies, pension funds, and banks. The amount issued by commercial papers is generally very large. The regulation of commercial paper comes under the purview of Reserve Bank of India.

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Re-Attempt Weekly Quiz Competition

Sources of Business Finance Test - 26

Result

Sources of Business Finance Test - 26

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SHARING IS CARING

Question 1

It enables the lessee to acquire the asset with a lower investment.

The risk of obsolescence is borne by the lesser.

The lease agreement does not affect the debt raising capacity of an enterprise

All of the above

Solution

Question 2

Higher

Lower

Equal

None of the above

Solution

Question 3

Reserve Bank of India

State Bank of India

Central Government

State Governmnt

Solution

Question 4

large

small

equal

both (a) and (b)

Solution

Question 5

One

Two

Three

Four

Solution

Question 6

Equity

Preference

Bonus

Right

Solution

Question 7

90, 150

90, 300

90, 364

90, 363

Solution

Question 8

Equity

Preference

Right

Bonus

Solution

Question 9

Promissory

Debit

Credit

Sales

Solution

Question 10

Central Bank

Reserve Bank of India

State Government

Central Government

Solution

User

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