Tag: organisation of commerce and management

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Questions Related to organisation of commerce and management

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Identify the merit(s) of Trade credit.

  1. It reduces the capital requirement.

  2. It helps the business focus on core activities.

  3. It does not require any negotiation or formal agreement.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

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.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

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

  1. Loss of goodwill

  2. Higher prices of raw materials

  3. The opportunity cost of discount

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
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.
Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

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

  1. Receivables

  2. Fixed capital

  3. Working capital

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

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.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

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

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

  2. It is generally a costly source of funds.

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

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
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.
Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Match the items of List-I with the items of List-II:

List-I List-II
(a) Trade credit and other payables that arise in the firm's day-to-day operations (i) Maturity Financing
(b) Financing and asset needs over time (ii) Factoring
(c) A tool for accelerating the collection from the customers (iii) Spontaneous financing
(d) Seeking financial service to finance on its debtor's balances (iv) Lockbox system

  1. $(a) - (iv), (b) - (iii), (c) - (ii), (d) - (i)$

  2. $(a) - (iii), (b) - (ii), (c) - (iv), (d) - (i)$

  3. $(a) - (ii), (b) - (iv), (c) - (i), (d) - (iii)$

  4. $(a) - (i), (b) - (ii), (c) - (iii), (d) - (iv)$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Matching: (a) Trade credit is spontaneous financing; (b) Financing needs over time is maturity financing; (c) Accelerating collection is lockbox system; (d) Financing debtor balances is factoring.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Trade credit is commonly used by business organisations as a source of ___________ financing.

  1. Short-term

  2. Long-term

  3. Medium-term

  4. Both A and C
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Trade credit is commonly used by business organisations as a source of short-term financing. Trade credits are generally a small amount of finances that are provided by the traders to another trader or a company to ensure smooth flow of trade cycle in the supply chain.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Trade credit is the credit extended by one _________ to another for the purchase of goods and services.

  1. Retailer

  2. Wholesaler

  3. Customer

  4. Trader
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Trade credits are the credits granted to manufacturers and traders by the suppliers of raw materials. These credits are given to a trader from another trader to ensure the smooth running of trades in a business supply chain.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Trade credit is a convenient and continuous source of funds, which is one of the __________ of trade credit.

  1. Limitations

  2. Merits

  3. Functions

  4. Objectives
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Trade credit is a short term source of finances where a trader credits finances to another trader for the smooth flow of business. Trade credit is a convenient and continuous source of funds as it is a short term credit and has a low amount value hence can be taken without long term financial plannings. This is one of the merits of trade credit.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Trade credit is needed to promote the ________ of an organisation.

  1. Purchases

  2. Sales

  3. Drawings

  4. Capital
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Trade credit is commonly used by business organisations as a source of short-term financing. It is granted to those customers who have reasonable amount of financial standing and goodwill.If an organisation wants to increase
its inventory level in order to meet expected rise in the sales volume in the near future, it may use trade credit to, finance the same.
Multiple choice organisation of commerce and management multinational corporations global enterprises meaning and features of mncs public sector undertakings & global enterprises

Global market leader is an organization which _________.

  1. has more than $50\%$ global market share.

  2. is recognized as being ahead of the rest in terms of market share

  3. is ahead of the competition in terms of global innovation

  4. has the monopoly over several foreign markets
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Global market leader is an organization which is recognized as being ahead of the rest of the organizations in the global market in terms of the market share of the organization.