Tag: nature, need and significance of business finance

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Questions Related to nature, need and significance of business finance

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

Which of the following is said to be the lifeblood of an organization?

  1. Debentures

  2. Finance

  3. Material

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

Finance is regarded as the lifeblood of a business enterprise. It is the basic foundation of all kinds of economic activities. Finance is the master key that provides access to all the sources for being employed in manufacturing and merchandising activities. The success of an organization largely depends on efficient management of its finances.

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

Money required for carrying out business activties is called ___________.

  1. financial management

  2. business finance

  3. finance

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

Business finance refers to money and credit employed in business. It involves procurement and utilization of funds so that business firms may be able to carry out their operations effectively and efficiently.

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

Every business enterprise must undertake such business which is_________________.

  1. Unlawful

  2. Lawful

  3. Illegal

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

Every business enterprise must undertake such business which is lawful. All business organization should adhere to the law of the country to ensure peace and order. Illegal and unlawful business organizations should not be undertaken.

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

BIFR means.

  1. Board for Industrial and Financial Reconstruction

  2. Board for International and Financial Reconstruction

  3. Board for Industrial and Forex Reconstruction

  4. Board for International and Forex Revival
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Board for Industrial and Financial Reconstruction $(BIFR)$ is a board setup by the Government of India, in order to tackle the problem of industrial sickness, under the purview of Sick Industrial Companies (Special Provisions) Act,$1985$ $(SICA)$.

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

Interest paid by other than financial enterprises is shown in cash flow statement under ________________.

  1. Operating activities

  2. Investing activities

  3. Financing activities

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

Interest paid by non-financial enterprises is classified as a financing activity in the cash flow statement because it relates to the cost of obtaining financial resources. Operating activities typically involve the core revenue-generating activities of the business.

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

To guard against the dangers of excess payment arising out of double insurance or over insurance made by the insured, insurance companies provide in their agreement _________________.

  1. Average clause

  2. Subrogation clause

  3. Risk clause

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

The principle of indemnity ensures that an insured party is compensated only for the actual loss suffered, preventing them from profiting from an insurance claim. This prevents the dangers of over-insurance or double insurance.

Multiple choice 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

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

  1. higher than

  2. same

  3. lower than

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

Multiple choice 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

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

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
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.

Multiple choice 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

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

  1. Rate of interest

  2. Processing fees

  3. Foreclosure charges

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

The Headquarters of World Bank is situated at ______________.

  1. London

  2. Washington DC

  3. New York

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