Sources of Business Finance Test

Result

Sources of Business Finance Test - 41

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Weekly Quiz Competition

Question 1
1 / -0

Interest paid by other than financial enterprises is shown in cash flow statement under ________________.

A
Operating activities

B
Investing activities

C
Financing activities

D
None of the above
Question 2
1 / -0

Consider the following items.
1. Debentures 2. Prepaid rent
3. Accrued interest 4. Bank overdraft
Liabilities would include

A
2, 3 and 4

B
1, 2 and 3

C
1 and 4

D
1, 2, 3 and 4
Question 3
1 / -0

Public issue of debentures requires that the issue be rated by a credit rating agency like _____.

A
SBI

B
RBI

C
SEBI

D
CRISIL

Solution

Public issue of debentures requires that the issue be rated by a credit rating agency like CRISIL. CRISIL is a global company which mainly provdes ratings to the companies.
Question 4
1 / -0

Limitation(s) of public deposit is/are _______.

A
New companies generally find it difficult to raise funds through public deposits.

B
It is an unreliable source of finance.

C
Collection of public deposits may prove difficult when the size of deposits required is large.

D
All of the above

Solution

Public deposits refers to the unsecured securities which is invited from the public. It is mainly used to finance the working capital of the company. Limitations of public deposit are:a) New companies generally find it difficult to raise funds through public b) It is an unreliable source of finance.deposits.c) Collection of public deposits may prove difficult when the size of deposits required is large.
Question 5
1 / -0

Other things remaining the same, an increase in the tax rate on corporate profits will __________________.

A
Make debt relatively cheaper

B
Make debt relatively less cheap home

C
No impact on the cost of debt

D
We can't say

Solution

Where there is an increase in the tax on corporate profit, the debt becomes relatively cheaper. This is because interest rate is to be paid to the debtors is deducted from the total income before calculating the value of tax. Thus, as the valueof tax increases, the debt becomes relatively cheaper.
Question 6
1 / -0

First debentures and second debentures would denote a classification of debentures on the basis of ______________.

A
Security

B
Redemption

C
Record

D
Priority
Question 7
1 / -0

Public deposit obtained by a company means _______________.

A
Deposits received from Government

B
Deposits received from public at large

C
Deposits received from stockists and agents

D
All the above

Solution

Public deposits obtained by a company means the deposits received by the company from public at large. Public deposits are unsecured, long term debt instrument. They have a slightly higher rate of interest when compared to that of interest rates of banks. They are usually issued to meet the working capital needs of the company.
Question 8
1 / -0

_______ issued by a company is an acknowledgment that the company has borrowed a certain amount of money,which it promises to repay at a future date.

A
Interest Certificate

B
Share Certificate

C
Debenture

D
Demat Certificate

Solution

Debenture issued by a company is an acknowledgment that the company has borrowed a certain amount of money,which it promises to repay at a future date. It is a long term security. Fixed interest is earned by issuing the debentures.
Question 9
1 / -0

Match List I with List II and select the correct answer using the codes given below the lists.
List I List II
A. Brand Equity 1. Tangible
B. Plant & Machinery 2. Current
C. Advances to suppliers 3. Intangible
D. Deferred revenue expenditure 4. Fictitious

A
A-3, B- 1, C-4, D-2

B
A-3, B- 1, C-2, D-4

C
A-1, B- 3, C-2, D-4

D
A-1, B- 3, C-4, D-2

Solution

LIST 1
LIST 2
A Brand Equity
Intangible
B Plant & Machinery Tangible
C Advances to suppliers
Current
D Deferred revenue expenditure Fictitious
Question 10
1 / -0

While making the leasing decision, the cost of leasing an asset must be compared with the ________.

A
cost of owning the same

B
cost of selling the same

C
cost of renting the same

D
none of the above

Solution

While making the leasing decision, the cost of leasing an asset must be compared with the cost of owning the same.Lease financing does not provide finance diluting the ownership of the business.Lease rentals paid by the lessee are deductible for computing taxable profits.

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	LIST 1	LIST 2
A	Brand Equity	Intangible
B	Plant & Machinery	Tangible
C	Advances to suppliers	Current
D	Deferred revenue expenditure	Fictitious

Sources of Business Finance Test - 41

Result

Sources of Business Finance Test - 41

Score

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Rank

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SHARING IS CARING

Question 1

Operating activities

Investing activities

Financing activities

None of the above

Question 2

2, 3 and 4

1, 2 and 3

1 and 4

1, 2, 3 and 4

Question 3

SBI

RBI

SEBI

CRISIL

Solution

Question 4

New companies generally find it difficult to raise funds through public deposits.

It is an unreliable source of finance.

Collection of public deposits may prove difficult when the size of deposits required is large.

All of the above

Solution

Question 5

Make debt relatively cheaper

Make debt relatively less cheap home

No impact on the cost of debt

We can't say

Solution

Question 6

Security

Redemption

Record

Priority

Question 7

Deposits received from Government

Deposits received from public at large

Deposits received from stockists and agents

All the above

Solution

Question 8

Interest Certificate

Share Certificate

Debenture

Demat Certificate

Solution

Question 9

A-3, B- 1, C-4, D-2

A-3, B- 1, C-2, D-4

A-1, B- 3, C-2, D-4

A-1, B- 3, C-4, D-2

Solution

Question 10

cost of owning the same

cost of selling the same

cost of renting the same

none of the above

Solution

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