Tag: financing

Quizzes (12) Questions (42)

Questions Related to financing

Multiple choice commercial studies sources of business finance - 2 public deposits non-institutional sources - medium-term financing lease financing

Companies generally invite public deposits for a period upto ________ years.

  1. One

  2. Two

  3. Three

  4. Four
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
The deposits that are raised by organisations directly from the public are known as public deposits. The organization in return issues a deposit receipt as acknowledgement of the debt. Public deposits can take care of both short-term or medium-term financial requirements. Companies generally invite public deposits for medium-term period upto three years.
Multiple choice commercial studies sources of business finance - 2 public deposits non-institutional sources - medium-term financing lease financing

Cost of public deposits is generally _______ than the cost of borrowings from banks and financial institutions.

  1. Higher

  2. Lower

  3. Equal

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
The deposits that are raised by organisations directly from the public are known as public deposits. Cost of public deposits is generally lower than the cost of borrowings from banks and financial institutions.
Multiple choice commercial studies sources of business finance - 2 public deposits non-institutional sources - medium-term financing lease financing

The deposits that are raised by organisations directly from the public are known as __________.

  1. Lease finance

  2. Public deposits

  3. Commercial paper

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

The deposits that are raised by organisations directly from the public are known as public deposits. Cost of public deposits is generally lower than the cost of borrowings from banks and financial institutions. Public deposits are beneficial to both depositor as well as the organization. 

Multiple choice commercial studies sources of business finance - 2 public deposits non-institutional sources - medium-term financing lease financing

Rates of interest offered on public deposits are usually _________ than that offered on bank deposits.

  1. Higher

  2. Lower

  3. Equal

  4. Both a and b
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
The deposits that are raised by organisations directly from the public are known as public deposits. Rates of interest offered on public deposits are usually higher than that offered on bank deposits. 

Any person who is interested in depositing money in an organisation can do so by filling up a prescribed form. The organisation in return issues a deposit receipt as acknowledgment of the debt.
Multiple choice commercial studies sources of business finance - 2 public deposits non-institutional sources - medium-term financing lease financing

Collection of public deposits may prove difficult, particularly when the size of deposits required is _________.

  1. Large

  2. Small

  3. Medium

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

The deposits that are raised directly from the public are public deposits. Any person who is interested in depositing money in an organisation can do so by filling up a prescribed form. the cost of deposits to the company is less than the cost of borrowings from banks. But Collection of public deposits may prove difficult, particularly when the size of deposits required is large.

Multiple choice commercial studies sources of business finance - 2 public deposits non-institutional sources - medium-term financing lease financing

Public investment in a company is generally in the form of_______________.

  1. Shares, debentures and deposits

  2. Purchase of goods

  3. Money Transfer

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

Public investment in a company is generally in the form of shares, debentures and deposits. It means public can invest in a company by purchasing shares, debentures and deposits.

Multiple choice commerce business finance financial planning financing financial management

Financial planning arrives at __________________.

  1. Minimising the external borrowing by resorting to equity issues

  2. Entering that the firm always have significantly more fund than required so that there is no paucity of funds

  3. ensuring that the firm paces neither a shortage nor a glut of unuable funds

  4. doing only what is possible with the funds that the firm has at tis disposal
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Financial planning aims at ensuring that the firm faces neither a shortage nor a glut of unusable funds. If there is shortage of funds then the firm will not be able to carry out its planned activities and commitment. On the other hand if there is excess funds available then it adds to cost of business which encourages waste of funds. Thus, financial planning focuses on ensuring the availability of just enough funds at right time.

Multiple choice commerce business finance financial planning financing financial management

The difference between current assets and current liabilities is:

  1. Gross working capital

  2. Net working capital

  3. Permanent working capital

  4. Temporary working capital
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Net working capital is defined as the difference between current assets and current liabilities, representing the liquidity available for day-to-day operations.

Multiple choice commerce business finance financial planning financing financial management

Plans made for a period of _____ year or less is termed as budget.

  1. one

  2. two

  3. three

  4. four
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A budget is a financial plan for a defined period of time, usually a year.

A budget is the sum of money allocated for a particular purpose and the summary of intended expenditures along with proposals for how to meet them. It may include a budget surplus, providing money for use at a future time, or a deficit in which expenses exceed income.

Multiple choice commerce business finance financial planning financing financial management

________ funding is almost as bad as inadequate funding.

  1. Limited

  2. Short

  3. Excess

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

Excess funding is almost as bad as inadequate funding. Funding involves cost like interest on loans which is a burden on the company.

Excess funding will result in excess interest on capital which is a negative impact on the company's financial position.