Tag: business capital/finance

Questions Related to business capital/finance

Interest rate in cash credit is normally ______ bank credit account.

organisation of commerce and management business capital/finance finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance

  1. higher than

  2. same

  3. lower than

  4. none of the above

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Correct Option: C
Explanation:

Interest rate in cash credit is normally lower than bank credit account. Cash credit is a type of borrowing which can be obtained from the bank savings account without having credit balance, whereas bank credit refers to a loan which is issued by the banking company and which are to be repaid by the borrower with a higher interest rate.

Cash credit is normally given on security of stock, debtors etc. whereas bank credit is normally given on security of a fixed asset.

organisation of commerce and management business capital/finance finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance

  1. True

  2. False

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Correct Option: A
Explanation:

Cash credit is normally given on security of stock, debtors etc. whereas bank credit is normally given on security of a fixed asset- this is a rue statement.Cash credit is a type of borrowing which can be obtained from the bank savings account without having credit balance.

Factor(s) to consider before choosing trade credit or bank credit is/are _______.

organisation of commerce and management business capital/finance finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance

  1. Rate of interest

  2. Processing fees

  3. Foreclosure charges

  4. All of the above

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Correct Option: D
Explanation:
 Trade credit is provided by the suppliers whereas bank credit is provided by the banking companies. Factors to consider before choosing trade credit or bank credit are:a) Rate of interest
b) Processing fees
c) Foreclosure charges.

The Headquarters of World Bank is situated at ______________.

organisation of commerce and management business capital/finance finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance

  1. London

  2. Washington DC

  3. New York

  4. Geneva

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Correct Option: B
Explanation:

The World Bank was created at the 1944 Bretton Woods Conference along with the International Monetary Fund (IMF).

 The World Bank and the IMF are both based in Washington, D.C., and work closely with each other.

The World Bank is an international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement.