Sources of Business Finance Test

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Sources of Business Finance Test - 30

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Weekly Quiz Competition

Question 1
1 / -0

International Agencies and Development Banks were set up by the __________ of developed countries of the world at national, regional and international levels.

A
Customers

B
Traders

C
Government

D
Retailers

Solution

International Agencies and Development Banks were set up by the government of developed countries of the world at national, regional and international levels to promote the development of economically backward areas in the world.
Question 2
1 / -0

Which of the following statement about negotiable instruments is false?

A
Once a bank certifies, a cheque, the bank must honour it

B
When a negotiable instrument is transferred to a holder in due course, he is entitled to enforce the instrument.

C
Earlier, more bills of exchange were used.

D
An instrument can be negotiated even if it is conditional on some future event, or if the amount to be paid will be determined at some future date.

Solution

An instrument can be negotiated even if it is conditional on some future event, or if the amount to be paid will be determined at some future date- this is a false statement about the negotiable instrument. Negotiable instruments refer to the document which guarantees payment for a specific amount of money.
Question 3
1 / -0

More than 50% of the shares are held by Company B in Company
A, thus _________________.

A
B is the holing company of A

B
B is a subsidiary company of A

C
B is both A & B

D
None of the above

Solution

If one company holds more than 50% of the shares of another or appoints a majority of the other company's directors, the second company is a subsidiary of the first. The first company is called the holding company
Question 4
1 / -0

Unless otherwise stated, a preference share is always deemed to be :

A
Cumulative, participating and non-convertible

B
Non-cumulative, non-participating and non-convertible

C
Cumulative, non-participating and non-converitable

D
Non-cumulative, participating and non-convertible
Solution
- Preference shares are always cumulative, non-participating and non-convertible unless otherwise stated.
- The dividend payable on preference shares goes on accumulating till it is fully paid off. If dividend at the fixed rate cannot be paid in any year due to inadequate profits, arrears of dividends will accumulate and will have to be paid out of profits of future years.
- When a share cannot be converted into equity share then it is said to be non-convertible preference share.
- The holders of preference shares are entitled to a fixed dividend and not in the surplus profits. If the Articles and Memorandum are silent and there is no clear provision in the terms of issue of these shares, all preference shares are deemed to be non-participating preference shares.
Question 5
1 / -0

Assets of the company belongs to the _______________.

A
company

B
share holders

C
members

D
promoters

Solution

The shareholders are the owners of the company while the Board of Directors is the chief managing body elected by the shareholders. The capital of the company is divided into smaller parts called ‘shares’. Thus the assets of the company belongs to share holders.
Question 6
1 / -0

If the guarantee company having share capital, the liability of shareholders will be ___________.

A
guarantee + unpaid value of shares

B
unpaid value of shares

C
unlimited

D
none of the above

Solution

A guarantee company is a type of corporation designed to protect members from liability. Guarantee companies often form when non-profit organizations wish to attain corporate status. If the guarantee company having share capital, the liability of share holders is guarantee plus the unpaid value of shares.
Question 7
1 / -0

A preference share is one which enjoys a _______.

A
preferential right regarding payment of dividend

B
preferential right regarding allotment of shares

C
preferential right regarding payment of dividend and return of capital

D
preferential right regarding return of capital

Solution

Preference shares are those shares which carry certain special or priority rights. Firstly, dividend at a fixed rate is payable on these shares before any dividend is paid on equity shares. At the time of winding up of the company, capital is repaid to preference shareholders prior to the return of equity capital.
Question 8
1 / -0

A closely held company is:

A
When most of the controlling management and shareholders are same.

B
When only are person has all the shares

C
A registration of companies

D
Both A & B

Solution

A closely held corporation is any company that has only a limited number of shareholders; its stock is exchanged only infrequently but is often listed on public exchanges. Most of the controlling management and shareholders are same.
Question 9
1 / -0

If the rights of a particular class of share holders is to be changed then the company should call __________.

A
shareholders meeting

B
directors

C
class meetings

D
preference shareholder meeting

Solution

A company is an association of several persons. Decisions are made according to the view of the majority. Class meetings are meetings which are held by holders of a particular class of shares, e.g., preference shareholders. Such meetings are normally called when it is proposed to vary the rights of that particular class of shares.
Question 10
1 / -0

A shareholder who can vote conditionally is a/an __________.

A
equity shareholder

B
preference shareholder

C
member

D
none of the above

Solution

The preference shareholders enjoy a preferential position over equity shareholders in two ways, receiving the fixed rate of dividend, receiving their capital after claims of the company's creditors is settled. Preference shareholders generally do not enjoy any voting rights but can vote conditionally.

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Re-Attempt Weekly Quiz Competition

Sources of Business Finance Test - 30

Result

Sources of Business Finance Test - 30

Score

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Rank

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SHARING IS CARING

Question 1

Customers

Traders

Government

Retailers

Solution

Question 2

Once a bank certifies, a cheque, the bank must honour it

When a negotiable instrument is transferred to a holder in due course, he is entitled to enforce the instrument.

Earlier, more bills of exchange were used.

An instrument can be negotiated even if it is conditional on some future event, or if the amount to be paid will be determined at some future date.

Solution

Question 3

B is the holing company of A

B is a subsidiary company of A

B is both A & B

None of the above

Solution

Question 4

Cumulative, participating and non-convertible

Non-cumulative, non-participating and non-convertible

Cumulative, non-participating and non-converitable

Non-cumulative, participating and non-convertible

Solution

Question 5

company

share holders

members

promoters

Solution

Question 6

guarantee + unpaid value of shares

unpaid value of shares

unlimited

none of the above

Solution

Question 7

preferential right regarding payment of dividend

preferential right regarding allotment of shares

preferential right regarding payment of dividend and return of capital

preferential right regarding return of capital

Solution

Question 8

When most of the controlling management and shareholders are same.

When only are person has all the shares

A registration of companies

Both A & B

Solution

Question 9

shareholders meeting

directors

class meetings

preference shareholder meeting

Solution

Question 10

equity shareholder

preference shareholder

member

none of the above

Solution

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