Sources of Business Finance Test

Result

Sources of Business Finance Test - 42

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

The merit(s) of public deposits is/are ______________________.

A
Cost of public deposits is generally lower than the cost of borrowings.

B
Public deposits do not usually create any charge on the assets of the company.

C
As the depositors do not have voting rights, the control of the company is not diluted.

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. The merits of public deposits are:
a) Cost of public deposits is generally lower than the cost of borrowings.b) Public deposits do not usually create any charge on the assets of the company.
c) As the depositors do not have voting rights, the control of the company is not diluted.
Question 2
1 / -0

The _____ never becomes the owner of the asset.

A
lessee

B
bank

C
hypothicatee

D
franchisee

Solution

The lessee never becomes the owner of the asset. A person who holds an property is known as lessee.
Question 3
1 / -0

Public deposits of a company cannot exceed _____ per cent of its share capital and free reserves.

A
15

B
20

C
25

D
30

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. Public deposits of a company cannot exceed 25 per cent of its share capital and free reserves.
Question 4
1 / -0

Identify the merit(s) of Trade credit.

A
It reduces the capital requirement.

B
It helps the business focus on core activities.

C
It does not require any negotiation or formal agreement.

D
All of the above

Solution

Trade credit can be defined as delay of payment permitted by the creditor or supplier of raw materials, consumables etc. against the goods purchased from him. Merits of Trade credit are:a) It reduces the capital requirement.b) It helps the business focus on core activities.
c) It does not require any negotiation or formal agreement.
Question 5
1 / -0

Likely disadvantage(s) of using trade credit include ___________.

A
Loss of goodwill

B
Higher prices of raw materials

C
The opportunity cost of discount

D
All of the above

Solution

Trade credit is issued when goods and services are traded on credit. It is offered by one seller to the other.Disadvantage(s) of using trade credit include:a) loss of goodwill
b) higher prices of raw materials
c) the opportunity cost of discount.
Question 6
1 / -0

Trade Credit is a major source of _____ finance for most business whether small or big.

A
Receivables

B
Fixed capital

C
Working capital

D
None of the above

Solution

Trade credit can be defined as delay of payment permitted by the creditor or supplier of raw materials, consumables etc. against the goods purchased from him. Trade Credit is a major source of working capital finance for most business whether small or big.
Question 7
1 / -0

_________ can be defined as delay of payment permitted by the creditor or supplier of raw materials, consumables etc. against the goods purchased from him.

A
Loan

B
Lease

C
Trade credit

D
None of the above

Solution

Trade credit is issued when goods and services are traded on credit. It is offered by one seller to the other.Trade credit can be defined as delay of payment permitted by the creditor or supplier of raw materials, consumables etc. against the goods purchased from him.
Question 8
1 / -0

Trade credit as a source of funds has certain limitations, which is/are ______________________.

A
Only limited amount of funds can be generated through trade credit.

B
It is generally a costly source of funds.

C
Availability of easy and flexible trade credit facilities may induce a firm to indulge in over-trading.

D
All of the above

Solution

Trade credit is issued when goods and services are traded on credit. It is offered by one seller to the other.a) Trade credit as a source of funds has certain limitations, which are:b) limited amount of funds can be generated through trade credit.
c) It is generally a costly source of funds.
Availability of easy and flexible trade credit facilities may induce a firm to indulge in over-trading.
Question 9
1 / -0

Through the process of _____________ commercial banks are able to create credit, which is in far excess of the initial deposits.

A
Advancing of loans

B
Money Creation

C
Accepting Deposits

D
None of these

Solution

A commercial is that financial institution which accepts deposit from people and offers loan for the purpose of consumption or investment. The main function of commercial bank is to create credit through the primary deposits which it receives from the public in order to provide more credit to the public.
Question 10
1 / -0

Repo rate is the rate at which _____________________.

A
Commercial Banks purchase government securities from the central bank

B
Commercial Banks can take loans from the central bank

C
Commercial Banks can keep their deposits with the central bank

D
Short-term loans are given by commercial banks

Solution

Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Sources of Business Finance Test - 42

Result

Sources of Business Finance Test - 42

Score

-

Rank

-

SHARING IS CARING

Question 1

Cost of public deposits is generally lower than the cost of borrowings.

Public deposits do not usually create any charge on the assets of the company.

As the depositors do not have voting rights, the control of the company is not diluted.

All of the above

Solution

Question 2

lessee

bank

hypothicatee

franchisee

Solution

Question 3

15

20

25

30

Solution

Question 4

It reduces the capital requirement.

It helps the business focus on core activities.

It does not require any negotiation or formal agreement.

All of the above

Solution

Question 5

Loss of goodwill

Higher prices of raw materials

The opportunity cost of discount

All of the above

Solution

Question 6

Receivables

Fixed capital

Working capital

None of the above

Solution

Question 7

Loan

Lease

Trade credit

None of the above

Solution

Question 8

Only limited amount of funds can be generated through trade credit.

It is generally a costly source of funds.

Availability of easy and flexible trade credit facilities may induce a firm to indulge in over-trading.

All of the above

Solution

Question 9

Advancing of loans

Money Creation

Accepting Deposits

None of these

Solution

Question 10

Commercial Banks purchase government securities from the central bank

Commercial Banks can take loans from the central bank

Commercial Banks can keep their deposits with the central bank

Short-term loans are given by commercial banks

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.