Tag: features of internal trade

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Questions Related to features of internal trade

Multiple choice commerce types of trade features of internal trade internal trade business and industry

The results of over-trading may be ____________.

  1. Overcapitalization

  2. Liquidity

  3. Technical insolvency

  4. All of the above

  5. Both (B) and (C) above
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Over-trading occurs when there is a disproportionately high turnover of assets compared to the volume of sales. The high-turnover is indicative of less amount of cash invested in current assets which can result in liquidity and might even lead to technical insolvency.

Multiple choice commerce types of trade features of internal trade internal trade business and industry

If the realized collection period is more than the terms of trade it can be said that __________________.

  1. The collection job is over

  2. The quality of debtors is poor

  3. The average daily sales are low

  4. All of the above

  5. Both (A) and (B) above
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

If the realized collection period is more than the terms of trade, then it indicates that is taking more time to convert its receivables into cash. This could be due to poor collection efforts of the firm or poor quality of the debtors. 

Multiple choice commerce types of trade features of internal trade internal trade business and industry

The phenomenon of over-trading in working capital is characterized by _______________________.

  1. Less amount of cash invested in current assets

  2. Overcapitalizatiion of the company as compared to volume of sales

  3. High amount of cash invested in current assets

  4. All of the above

  5. Both (A) and (C) above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Over-trading can be noticed from the disproportionately high turnover of assets compared to the volume of sales. This high turnover is indicative of less amount of cash invested in current assets which can create problems of liquidity at the time of making payments for current obligations.

Multiple choice commerce types of trade features of internal trade internal trade business and industry

Buying and selling of goods and services within the boundaries of a nation are referred to as __________.

  1. external trade

  2. internal trade

  3. sale transaction

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

Internal trade, also known as domestic trade, refers to the buying and selling of goods and services within the geographical boundaries of a single country.

Multiple choice commerce types of trade features of internal trade internal trade business and industry

Purchase and sale of goods in relatively small quantities, generally to the ultimate consumers, is referred to as _________.

  1. wholesale trade

  2. retail trade

  3. Internal trade

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

Retail trade involves selling goods in small quantities directly to the final consumer, whereas wholesale trade involves selling in bulk to other businesses.

Multiple choice commerce types of trade features of internal trade internal trade business and industry

Internal trade can be classified into two broad categories. The two categories of internal trade are _________ and _________.

  1. wholesale, retail trade

  2. inward , outward trade

  3. intra state, inter state trade

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

Internal trade is primarily categorized into wholesale trade (bulk sales to intermediaries) and retail trade (sales to final consumers).

Multiple choice commerce types of trade features of internal trade internal trade business and industry

Which is termed as trade bill?

  1. An inland instrument drawn outside India.

  2. An instrument drawn outside India.

  3. An outside trade bill drawn in India.

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

Trade bills are typically drawn by the seller of goods and are accepted by the buyer. Accommodation bills do not involve the sale or purchase of any goods and/ or services; rather they are agreements between two parties with the purpose of financial support.

a bill of exchange (= a document ordering someone to pay a particular amount at a particular time) that is used to pay for goods: If the trade bill is accepted, in effect the buyer is getting credit from the seller.

Multiple choice commerce types of trade features of internal trade internal trade business and industry

Buying or selling all 30 scrips of sensex in proportion of their current weights in the sensex in one go is called _____________.

  1. Basket trading

  2. Arbitrage

  3. Badla

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

A basket trade is an order to buy or sell a group of securities simultaneously. Basket trading is essential for institutional investors and investment funds who wish to hold a large number of securities in certain proportions. 

A basket is a group of several securities created for the purpose of simultaneous buying or selling. Baskets are frequently used for program trading. Certain specific products can be seen as specialized baskets.

Multiple choice commerce types of trade features of internal trade internal trade business and industry

Carrying forward a transaction from one settlement period to the next is known as ______________.

  1. Basket Trading

  2. Margin Trading

  3. Badla

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

A basket trade is an order to buy or sell a group of securities simultaneously. Basket trading is essential for institutional investors and investment funds who wish to hold a large number of securities in certain proportions.

In business a basket is a group of several securities created for the purpose of simultaneous buying or selling. Baskets are frequently used for program trading. Certain specific products can be seen as specialized "baskets".