Sources of Business Finance Test

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Sources of Business Finance Test - 39

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following statements is false?

A
Debentures can be issued for cash or consideration other than cash or as collateral security

B
Debentures can not be forfeited for non-payment of call money.

C
A company can buy its own debentures.

D
A debentures issued at a discount can be redeemed at a premium.
Question 2
1 / -0

Which of the following is false?

A
A company can issue redeemable debentures

B
A company can issue debentures with voting rights

C
A company can buy its own shares

D
A company can buy its own debentures
Question 3
1 / -0

From the point of view of security, the debentures are classified as -

A
Secured and unsecured Debentures

B
Redeemable Debentures and Irredeemable Debentures

C
Convertible Debentures and Non-convertible Debentures

D
Registered Debentures and Bearer Debentures

Solution

Debentures can be secured in nature, it may be unsecured in nature. A secured debenture is secured by the charge on some asset or set of assets which is known as secured or mortgage debenture and another when it is issued solely on the credibility of the issuer is known as the naked or unsecured debenture.
Question 4
1 / -0

Which of the following is false?

A
A company can issue bearer debentures.

B
A company can issue convertible debentures.

C
A company can issue redeemable debentures.

D
A company can issue debentures with voting rights.

Solution

Under Section 71 (2) of the Companies Act, 2013 it has been stated that no company can issue debentures which can carry any voting rights. The debentures can be issued by the company under the meeting of the board of directors under the provisions of Section 179 (3) of the Companies Act, 2013.
Therefore, D is the correct option.
Question 5
1 / -0

Debenture Trust Deed must be executed within-

A
$$1$$ month of the closure of issue

B
$$3$$ months of the closure of issue

C
$$6$$ months of the closure of issue

D
$$1$$ month before the opening of issue

Solution

A trust deed shall be executed by the issuer company in favour of the debenture trustees within six months of the closure of the issue.
Question 6
1 / -0

The shares issued for providing know how, intellectual property rights, etc are called ____________.

A
Golden shares

B
Right shares

C
Sweat Equity shares

D
Bonus shares

Solution

Sweat equity shares’ means equity shares issued by a company to its employees or directors at a discount (to the market price) or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.

According to Section 54, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled,

The issue is authorized by a special resolution passed by the company;
The resolution specifies the number of shares, the current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;
At least one year should have elapsed, at the date of such issue, since the date on which the company had commenced business; and
Where the equity shares of the company are listed on a recognized stock exchange, the sweat equity shares should be issued in accordance with the regulations made by Securities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.
The rights, limitations, restrictions and provisions which are applicable to equity shares shall he applicable to the sweat equity shares issued under this section and the holder of such shares shall rank with other equity shareholders.
Question 7
1 / -0

Preference share holders have a right to vote on every resolution of a company.

A
True

B
False

C
Partly True

D
Partly False

Solution

As per section 47 of companies act,2013, Every member of company who is holding any preferential share capital (Preference shareholders) shall in respect of such capital have right to vote only on-
1. Resolutions placed before company which directly affects rights attached to their shares(preference), and
2. Any on resolution for winding-up of the company.
Question 8
1 / -0

Debentures Account is a -

A
Personal Account

B
Real Account

C
Nominal Account

D
None of these

Solution

Debenture A/c is a Personal A/c as it reflects the liability of the company towards debentureholders'.
Question 9
1 / -0

Which of the following statement is false?

A
Equity shares have a right to vote on every resolution of the company

B
Preference shares cannot vote on all the resolutions of the company

C
All the equity shareholders have equal voting rights

D
All of the above

Solution

As per companies act, 2013, every member of company limited by shares and holding any equity share capital shall have a right to vote in respect of such capital on every resolution placed before the company and his voting rights on a poll shall be proportionate to his share of the equity share capital of a company. Therefore, the statement that all equity shareholders have equal voting rights is FALSE.
Question 10
1 / -0

Ethics has become the buzzword in the corporate world because of_________.

A
Globalization

B
Communications explosion

C
Explosion

D
Both (a) & (b)

Solution

Ethics has become the buzzword in the corporate world because of both globalization and communications explosion. Globalization refers to the process of integration of world economies into a village economy.

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Sources of Business Finance Test - 39

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Question 1

Debentures can be issued for cash or consideration other than cash or as collateral security

Debentures can not be forfeited for non-payment of call money.

A company can buy its own debentures.

A debentures issued at a discount can be redeemed at a premium.

Question 2

A company can issue redeemable debentures

A company can issue debentures with voting rights

A company can buy its own shares

A company can buy its own debentures

Question 3

Secured and unsecured Debentures

Redeemable Debentures and Irredeemable Debentures

Convertible Debentures and Non-convertible Debentures

Registered Debentures and Bearer Debentures

Solution

Question 4

A company can issue bearer debentures.

A company can issue convertible debentures.

A company can issue redeemable debentures.

A company can issue debentures with voting rights.

Solution

Question 5

$$1$$ month of the closure of issue

$$3$$ months of the closure of issue

$$6$$ months of the closure of issue

$$1$$ month before the opening of issue

Solution

Question 6

Golden shares

Right shares

Sweat Equity shares

Bonus shares

Solution

Question 7

True

False

Partly True

Partly False

Solution

Question 8

Personal Account

Real Account

Nominal Account

None of these

Solution

Question 9

Equity shares have a right to vote on every resolution of the company

Preference shares cannot vote on all the resolutions of the company

All the equity shareholders have equal voting rights

All of the above

Solution

Question 10

Globalization

Communications explosion

Explosion

Both (a) & (b)

Solution

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