Tag: organisation of commerce and management

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Questions Related to organisation of commerce and management

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

The following are the managerial considerations influencing dividend policy
(1) Availability of cash
(2) Restrictions by the Financial Institutions
(3) Management Control
(4) Dividend policy as a financing decision
Of these

  1. 1 and 3 are correct

  2. 2 and 4 are correct

  3. 1, 2 and 4 are correct

  4. All are correct
Reveal answer Fill a bubble to check yourself
D Correct answer
Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

The word 'dividend' includes the following besides cash

  1. Distribution of rights to acquire shares in another company is distribution of dividend

  2. Where dividend is paid in the form of shares in another company, the dividend must be values at the market value of shares

  3. Bonus shares issued by capitalising profits are not dividend

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

Under tax law and accounting standards, the definition of dividend is broad and can include various forms of distributions beyond simple cash, including rights to shares or specific property distributions.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

'Dividend' is defined under the fol1lowing section if Income Tax Act, 196

  1. Section 2(20)

  2. Section 2(22)

  3. Section 5(22)

  4. Section 5(33)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Section 2(22) of the Income Tax Act, 1961 defines 'dividend' for taxation purposes, encompassing various forms of corporate distributions beyond just cash payouts.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Property dividends are distributed under ___________.

  1. normal conditions

  2. exceptional conditions

  3. Both (a) and (b)

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

Property dividends are rare and typically occur under exceptional circumstances, such as when a company needs to dispose of assets or lacks sufficient cash to pay a standard dividend.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

The characteristics of a scrip dividend is/are ______.

  1. it is in a form of a promissory note

  2. it bears interest and is accepted as a collateral security

  3. Both (a) and (b)

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

A scrip dividend is essentially a promise to pay cash at a future date; it functions like a promissory note, often bears interest, and can be used as collateral.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Dividends paid in the ordinary course of business are known as __________.

  1. cash dividends

  2. profit dividends

  3. stock dividends

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

Dividends paid out of the regular profits generated in the ordinary course of business are referred to as profit dividends.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

The dividend policy affects __________.

  1. the financial structure of corporation

  2. the flow of funds, corporate liquidity and stock prices

  3. the investor satisfaction with the return on his investment

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

Dividend policy is a multifaceted decision that impacts the firm's capital structure, its liquidity position, the market price of its stock, and the overall satisfaction of its investors.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Dividends paid from capital are known as ___________.

  1. profit dividends

  2. cash dividends

  3. liquidation dividends

  4. property dividends
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Liquidation dividends are distributions made to shareholders when a company is winding up its operations or liquidating its assets. These are paid out of capital rather than accumulated profits.

Multiple choice functional area of management financial management nature and significance of management organisation of commerce and management business studies

Dividend policy is a ________.

  1. managerial decision

  2. financing decision

  3. dividend decision

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

Dividend policy refers to the policy that deals with the percentage of profit which are yield as dividend to the shareholders of a company which is a financial decision as it includes the finance of the company which can be retained in the company or given as dividend.