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InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your Class 11 knowledge and support exam preparation. Choose a topic below to get started.
| 2951. |
A house wife exchanges old clothes for utensils on regular basis. Is it a bussiness activity |
| Answer» No, it is not a business activity because it is not done on regular basis.<br>No<br>No its not a business activity<br>From the definition of the term business activity. It is refers to as any activity done in order to exchange goods or service from an individual to the next with an aim of making profit.From the question the wife exchanges clothes for utensils but we are not told that she makes any profit this may not be considered as a business activity because it has got no aim of making profit. | |
| 2952. |
Explain in detail the types of economic activities with example (6 marks) |
| Answer» 1. Business = It is an economic activity which is conducted on regular basis to earn profit through production ; sale of goods and services2. Profession = It is an economic activity which is conducted on regular basis by a single individual having some special skills and knowledge<br>Three types of economic activities:\tBusiness:\xa0Business refers to activities which are concerned with production, purchase, sale and supply of goods on a regular basis with a motive to earn profit. Examples: Factories, malls etc.\tProfession:\xa0Profession refers to an occupation wherein individuals with specialised knowledge and qualification provide personalised and expert services to people to earn a living (by charging professional fees for their services). Examples: Medical practitioners, practising chartered accountants etc.\tEmployment:\xa0Employment refers to an activity in which individuals hired by organisations work regularly and receive remuneration (salary or wages) for their services in return. Example: Jobs in multinational companies, banks etc.<br>I dfk | |
| 2953. |
Types of non economic activity ? |
| Answer» Govt. Gompany who do social activities for people<br>Activities\xa0which are undertaken to satisfy social, religious cultural and sentimental requirements are called\xa0non-economic activities. A mother cooking for her family is an\xa0example\xa0of\xa0non-economic activities.Some Popular Variations of\xa0Non-Economic Activities\xa0may be:\t(i) Leisure-Time\xa0Activities\t(ii) Family-Obligation\xa0Activities\t(iii) Religious and Cultural\xa0Activities\t(iv) Social Welfare\xa0Activities | |
| 2954. |
How many economic activity are there ? |
| Answer» 1. Business 2. Profession3. Employment<br>Economists say there are four basic types of economic activities:\tThe Primary Sector, i.e., raw materials.\tThe Secondary Sector, which includes industry and manufacturing.\tThe Tertiary Sector, i.e., services.\tThe Quaternary Sector, which we also call the ‘knowledge sector.’ | |
| 2955. |
Who are co-parceners |
| Answer» any person born into the family (boy or girl) up to the next coming three generations is a part of the HUF. These members are the co-parceners. The head of such a Joint Family Business is the eldest member of the family, the “Karta”. | |
| 2956. |
Who are co -parceners |
| Answer» Coparsener are those who are a member of joint hindu family business . They are in next 3 generation | |
| 2957. |
Features of departmental undertaking |
| Answer» 1. Audit and AccountingNormal budgeting, accounting and audit procedures are applicable to departmental undertakings just like government departments.2. Managed by Civil ServantsThe departmental undertakings are managed by the civil servants, who are subject to the same services condition as applicable to civil servants of the government.3. Sovereign ImmunityWithout the consent of the government, a departmental undertaking cannot be sued at all. | |
| 2958. |
Notes of formation of abusiness |
| Answer» | |
| 2959. |
What is the difference between tertiary industry and auxiliaries to trade. |
| Answer» Tertiary industries are concerned with the firms that provides all kinds to services including consumer services, transportation for people, banking etc. But, Auxiliaries to trade are the activities that facilitate the trading process only. There are various auxiliaries to trade like banking and finance, advertising, warehousing etc.Therefore, tertiary industries are wider in scope than auxiliaries to trade and they cover all auxiliaries to trade. | |
| 2960. |
Profit is not only an objective of business but it is necessary of business do you agree |
| Answer» Profit making is essential in business because of the following reasons :(i)\xa0Incentive\xa0- Profits provide the basic stimulus to establish and operate business enterprises. Profit is the driving force behind private enterprise. It is the return on capital and reward for the risk of entrepreneurship.(ii)\xa0Survival\xa0- Profit covers the risk and costs of staying in business. Profit helps to maintain intact the revenue generating capacity of business. Through profits, an enterprise can replace obsolete machinery and equipment.(iii)\xa0Growth\xa0- In order to expand and grow, an enterprise needs funds. Retained earnings or ploughing back of profits is an important source of capital for expansion and innovation. Profits provide the means of self-financing.(iv) Measure of efficiency - Profit is an important measure of success for a corporation. Profit is the criteria by which people evaluate the efficiency and performance of business enterprise.(v)\xa0Prestige - A losing concern has no goodwill or image in society. Accumulation of wealth through business earning has enabled people to build business empires. Society, too, can progress only when human effort yields profit because a losing organisation leaves less for all to share. | |
| 2961. |
Anyone can explain me analytic industry because I can\'t understand and I also need it |
| Answer» Analytical industry is that industry which break raw material into different parts and produce finished products.Ex-processing of crude oil | |
| 2962. |
What is hundi explain? |
| Answer» Hundi is a negotiable financial instrument which consists of an unconditional contract to warrant the payment of money, the promise or order. This word has come out from the Sanskrit word ‘hundi’ which means ‘to collect’.\xa0A hundi is a negotiable instrument. But it is not necessary to be a bill of exchange as given in the Act. Hundis are famous among Indian traders. Specifically, it is famous amongst those operating in suburban areas. These are under control of the Negotiable Instrument Act,1881 unless there is a local usage to the contrary. | |
| 2963. |
Describe the role of small business in rural India |
| Answer» Do you help me in studies<br>Small Scale enterprises provide the numerous benefits in rural area. The role of small business in rural India is explained in the following points. (i) Non-farm Employment Traditionally, rural households in India were exclusively engaged in agriculture. But now rural households have varied and multiple sources of income and participate in a wide range of non-agricultural activities such as wage employment and self-employment in commerce, manufacturing and services, along with the traditional rural activities of farming and agricultural labour. This can be largely attributed to the setting up of agro-based rural small industries. (ii) Employment for Artisans Cottage and rural industries play an important role in providing employment opportunities in the rural areas, especially for the traditional artisans and the weaker sections of society. (iii) Prevention of Migration Development of rural and village industries can also prevent migration of rural population to urban areas in search of employment. (iv) Poverty Alleviation Village and small industries are significant as producers of consumer goods and absorbers of surplus labour, thereby addressing the problems of poverty and unemployment. Promotion of small scale industries and rural industrialization has been considered by the Government of India as a powerful instrument for realizing the twin objective; of accelerated industrial growth and creating additional productive employment potential in rural and backward areas.\' (v) Socio-economic Aspects These industries contribute amply to other socio-economic aspects, such as reduction inequalities, dispersed development of other sectors of the economy. | |
| 2964. |
Why is partnership considered by some to be a relatively unpopular from of business ownership? |
| Answer» Partnership is considered by some to be relatively unpopular form of business ownership because:\xa01. Uncertainty of duration:\xa0A partnership suffers from a possible limited span of life. Legally, a partnership firm must be dissolved on the retirement, death, bankruptcy, or lunacy of any partner or demanded by any partner. The probability of any one of these events occurring when the number of partners is much greater than in the case of a sole proprietor.\xa02. Risks of additional liability:\xa0It is true that like the sole proprietor, each partner has unlimited liability. But his liability may arise not only from his own acts but also from the acts and mistakes of co-partners over whom he has no control.\xa03. Lack of harmony:\xa0The old saying that “too many cooks spoil the broth” can be apt for a business partnership. Harmony may be difficult to achieve, especially when there are many partners. Lack of centralized authority and conflicts in policy can disrupt the organization.\xa04. Difficulty in withdrawing investment:\xa0Investment in a partnership can be simple, but its withdrawal may be difficult or costly when this aspect is considered from the point of view of individual partners. This is so because no partner can withdraw his interest from the firm without the consent of all partners.\xa05. Lack of public confidence:\xa0A partnership may suffer from lack of public confidence\xa06. Lack of public confidence:\xa0A partnership may suffer from lack of public confidence because, like that of a company there is no legal mechanism to enforce the registration of a partnership firm and the disclosure of its affairs.\xa07. Limited resources:\xa0A partnership is good as it can be started with limited capital. However, it becomes a handicap in the growth and expansion phases of the business. There is a limit beyond which it is almost impossible for partners to collect capital. This\xa0limit is generally up to the personal properties of the partners.8. Unlimited liability:\xa0Unlimited liability discourages partners to undertake risky ventures, and therefore, their risk-taking initiative is very risky. | |
| 2965. |
What\'s valid negotiation? Plz tell. |
| Answer» | |
| 2966. |
What is mutual agency relationship |
| Answer» Mutual agency implies that every partner is both an agent and principal. He is an agent of other partners as he represents them and there by binds them through his decisions and acts. He is a principal as he too can be bound by the acts of other partners. | |
| 2967. |
Explain in brief about perpetual succession |
| Answer» Perpetual succession : A company being a creation of the law, can be brought to an end only by law. It will only cease to exist when a specific procedure for its ClBsure, called winding up, is completed. Members may come and go out, but the company continues to exist. | |
| 2968. |
Why debentures are cheap soures of finance |
| Answer» \tThe cost of debt capital, represented by debentures is lower than the cost of preference or equity capital. This is because the interest on debentures is tax deductible and hence it helps in increasing the rate of return. Thus debenture issue is a cheaper source of finance.\tThe fixed monetary payment associated with debentures is interest. This fixed return appeals to many investors, since they are not affected by the fluctuating fortunes of the company. | |
| 2969. |
What is sole proprietorship ? |
| Answer» Thank you<br>Definition of Sole Proprietorship:\tIt is that type of business organization which is owned, managed and controlled by a single owner.\tThe word “sole” means “only” and “proprietor” notes to “owner”.\tA sole proprietor is the beneficiary of all profits.\tAll risks are to be borne by the sole proprietor.\tThe sole proprietor has unconditional and full control over its business.\tExample:\xa0Beauty parlour, barbershop, general store and sweet shop run by a single owner. | |
| 2970. |
Difference b/w private & public sector ? |
| Answer» Public sector:1.It is controlled and managed by the government.2.The main aim of the sector is public welfare.3.The sector provides basic facilities like education, health, food and security to the people. For Example: Railways, Post office, BSNL.Private sector:1.It is controlled and managed by an individual or a group.2.The main aim of the sector is to earn profits.3.Private sector does not provide any service at a reasonable rate. For example: Tatas, Birlas, Reliance. | |
| 2971. |
What is commerce in Business Studies |
| Answer» Provide link between producer and consumer<br>Commerce refers to all those activities which help in distribution of good and services are known as commerce | |
| 2972. |
Is registration of a firm legally compulsory ? |
| Answer» Registration of a partnership firm is not compulsory under law. The Partnership Act, 1932 provides hat if the partners so desire they may register the firm with the Registrar of Firms of the state in which the main office of the firm is situated.Read more on Sarthaks.com - https://www.sarthaks.com/99451/is-registration-partnership-firm-compulsory-what-are-the-consequences-non-registration | |
| 2973. |
The structure in which there is separation of ownership and management is called |
| Answer» Company is in the form of organization in which The structure in which there is separation of ownership and management | |
| 2974. |
Explain any four characteristic of business |
| Answer» Characteristics of Business(i) Economic Activity Business is considered to be an economic activity because it isundertaken with as aim of earning money or livelihood.(ii) Production or Procurement of Goods and Services Goods are offered to consumers after they are either produced or procured by business enterprises. Thus, every business enterprise either manufactures the goods it deals in or it acquires them from other producers, to be further sold to consumers or users.Goods may be consumer goods like television, tea, pen, etc or capital goods like machinery, furniture, etc. Services may include facilities offered to consumers in the form of transportation, banking, electricity, etc.(iii) Sale or Exchange of Goods and Services Business involves transfer or exchange of goods and services for value addition. If goods are produced for self consumption and not for selling purpose, it cannot be called a business activity. Cooking food at home for the family is not business, but cooking food and selling it to others in a restaurant is business. Thus, one essential characteristic of business is that there should be sale or exchange of goods or services between the seller and the buyer.(iv) Regular Dealings in Goods and Services Business involves dealings in goods or services on a regular basis. Therefore, one single transaction of sale or purchase does not constitute business.(v) Profit Earning The primary objective of business is to earn profit. For this businessmen make all possible efforts by increasing the volume of sales or reducing cost. It is an essential factor as growth and expansion would be possible only when a business is making profit.(vi) Uncertainty of Return Business should not be considered as bed of roses. At every stepproblems and obstacles hinder the path of success. One cannot expect the actual returns an investment as there is always a possibility of losses. | |
| 2975. |
Explain in brief multiple objectives of business |
| Answer» But u leave 3rd objective that is individual objective<br>Objectives of Business:\xa0The objective of business means the purpose for which a business is established and carried on. Proper selection of objectives is essential for the success of a business.The businessmen always have multiple objectives. All objective may be classified into two broad categories. These are (1) Economic objectives and (2) Social Objectives | |
| 2976. |
which is the cause of business risk economic cause or social cause |
| Answer» Both Economic and social cause leads to BUSINESS RISK<br>Business risk refers to the uncertainties that leads to unprecedented profits or losses.The causes may be as follows:\tNatural Calamity: Natural calamities like flood, earthquake, famine cannot be controlled. Such calamities result in a great loss of property and resources.\tEconomic Causes: These include change in the demand or supply, change in prices, competition, change in technology etc. Rise in lending interest, taxes etc are financial problems which are also considered in these.\tInternal causes: These include dishonesty, negligence and absenteeism of employees, internal conflict, inefficient management, strikes and riots etc.\xa0\tOther causes: These may include fluctuations in exchange rates, political disturbances or any such unforeseen events. | |
| 2977. |
Give an example of activity which is economic in one side non economic on other side. |
| Answer» Activities are classified into economic and non economic activities and there are various activities which can be economic and non economic on other side..... Suppose your father has bakery where he sells cakes for earning motive but he has bake some cakes on Sunday for you for your happiness which is done for his mental and physiological satisfaction<br>Business is considered an economic activity\xa0because it is concerned with production, purchase, sale or distribution of goods and Services with an aim of earning profit. An\xa0example of activity which is economic in one side\xa0and\xa0non-economic on other side\xa0is teaching. When\xa0a\xa0teacher teaches in\xa0a\xa0school, it\'s an\xa0economic activity\xa0and when\xa0a\xa0teacher teaches to his children, it\'s\xa0a non-economic activity. | |
| 2978. |
What steps were taken to make a public sector and active participant in the market? |
| Answer» In general terms, the\xa0public sector\xa0consists of governments and all publicly controlled or publicly funded agencies, enterprises, and other entities that deliver\xa0public\xa0programs, goods, or services.\xa0The\xa0efficiency and effectiveness\xa0are key features of a good governance, with the\xa0public sector\xa0being responsible for finding ways to\xa0make\xa0the best use of resources (human, material, financial, etc.) to\xa0ensure\xa0the population needs coverage, in the best conditions. | |
| 2979. |
Why is the business responsible for environmental protection? |
| Answer» Because he is using the environment in the form of land raw materials etc and therefore is responsible for its protection | |
| 2980. |
Explain the factors that are important to be considered while starting a business |
| Answer» \xa0Business means dealing with risks. Risks can cause lower profit, no profit and even loss. Therefore, the start of a business needs careful planning to ensure success and longevity. Important factors for consideration for starting a business are as follows:1.\xa0Selection of line of business:\xa0The first thing to be decided by any entrepreneur of a new business is the nature and type of business to be undertaken. He will obviously like to enter that branch of industry and commerce, which has the possibility of greater amount of profit. The decision will also be influenced by the customers\' requirement in the market and also the kind of technical knowledge and interest the entrepreneur has for producing a particular product.2.\xa0Size of the firm:\xa0Size of the firm or scale of its operation is another important decision to be taken at the start of the business. Some factors favour the large size whereas others tend to restrict the scale of operation. If the entrepreneur is confident that the demand of the proposed product is likely to be good over time and he can arrange the necessary capital for business, he will start the operation on a large scale. If the market conditions are uncertain and risks are high, a small size business would be a better choice.3.\xa0Choice of form of ownership:\xa0In relation of ownership, the business origination may take the form of a sole proprietorship, partnership, or a joint stock company. Each form has its own merits and demerits. The choice of the suitable form of ownership will depend on such factors as the line of business, capital requirements, liability of ownership, division of profit, legal formalities, continuity of business, transferability of interest and so on.4.\xa0Location of business enterprise:\xa0An important factor to be considered at the start of the business is the place where the enterprise will be located. Availability of raw materials and labour, power supply and services like banking, transportation, communication, warehousing etc. are important factors while making this choice. | |
| 2981. |
What is social responsibility |
| Answer» A business is a part of society. So, a business enterprise should do business and earn money in ways that fulfill the aspirations of the society. Thus social responsibility relates to the voluntary efforts on the part of the businessmen to contribute to the social well being. The businessmen make use of resources of society and earn money from the members of society so they must do something for the society. | |
| 2982. |
Timber industry is what type of industry?? |
| Answer» It is a part of primary industry in which it comes under extractive industry<br>Primary<br>Primary | |
| 2983. |
Started business with gst ? |
| Answer» | |
| 2984. |
no. of floors , shop and occupied and unoccupied for ambience mall |
| Answer» Can u plz ask ur question more specifically.. I hvnt understood ur question ?? | |
| 2985. |
What are the physical causes of business risk?? |
| Answer» Causes of Business RiskNatural causes:\xa0Natural causes are beyond the control of human beings. Natural disasters can lead to huge losses in business. Let us take example of various small hotels which were wiped out during the massive floods in Uttarakhand. Nobody could do anything when the flood hit the hilly state.Human causes:\xa0Strikes, dishonesty, carelessness, etc. are examples of human causes of business risk. Labour unrest have often resulted in shutdown of many factories. The factory of Maruti at Gurgaon is an example of crippling operations due to labour unrest.Economic causes:\xa0Inflation, unemployment, economic slowdown, etc. are examples of economic causes of business risk. The recent economic slowdown has resulted in reduced demand for housing. According to leading newspapers, there is huge inventory in the housing sector which would take at least ten years to be sold. Luxury products suffer severe decline in demand during an economic slowdown.Other causes:\xa0Some political events can change the business scenario. A major policy change by the government can change the business environment. A very good example of effect of policy change on a business is the upsurge in mobile telephony market in India when the then telecommunications minister favoured CDMA by making some changes in policy. It is always seen that a stable government at the centre improves the business climate, while an unstable government is detrimental to the business climate. | |
| 2986. |
1.Define economic nd non economic activities?2.difference b/w business nd profession? |
| Answer» Economic activity is an activity of providing, making, buying or selling commodities or services by people to satisfy day-to-day needs of life. Any activity that includes manufacturing, distributing or utilising products or services.Non-economic activity is an activity performed with the purpose of rendering services to others without any consideration to financial gain. Those activities which are initiated for personal content or to meet human sentiments are non-economic activities. <th>BASIS FOR COMPARISON</th> <th>BUSINESS</th> <th>PROFESSION</th> \t\t\tMeaningBusiness is an economic activity concerned with the production or purchase and sale of merchandise and rendering of services with the purpose of earning profit.Profession is a form of economic activities, wherein special skills, knowledge and expertise is required to be applied by the person, in his occupation.Basic objectiveEarning profitRendering servicesEstablishmentOn the decision of entrepreneur and fulfillment of legal formalities.Membership of the respective professional body and certificate of practice.QualificationNo minimum qualification.Specialized knowledge of study is required.CapitalRequired as per the size and nature of business.Limited capital is required.RewardProfitProfessional fee\t | |
| 2987. |
What do you understand by a sole proprietorship firm? Explain its merits and limitation. |
| Answer» Sole tradership or proprietorship is the oldest form of business organisation. It is also known as individual proprietorship or single entrepreneurship. This type of organisation is very simple and easy to form.“Sole proprietorship is the form of business which is owned, managed and controlled by an individual. It is the simplest form of business, established with the limited resources, ability and capital of the individual known as sole trader or entrepreneur.”A sole tradership enjoys the following merits(i) Ease of Formation The establishment of a sole tradership concern is easier as compared to other forms of organisation. A person with small amount of capital can start the business without undergoing much legal formalities.(ii) Flexibility The sole trader is free to change the nature and scope of his business operation, whenever the situation demands.(iii) Quick Decision-making Sole tradership facilitates quick decision-making and prompts action as the sole trader has exclusive control over his business.(iv) Secrecy of Information It is easy to preserve secrecy in business in case of sole proprietorship.A sole tradership has following limitations(i) Limited Financial Resources The financial resources which a sole trader can raise are limited. He can either depend on his personal resources or on his borrowing capacity.(ii) Limited Managerial Ability The sole proprietor has to take all the decisions and he may not be an expert in all the matters of business. Also, due to financial constraints, he may not he able to use services of professionals and experts.(iii) Limited Life of a Business Concern In the eyes of law, owner and business are considered one and the same. Therefore, illness death or insolvency of the owner affects the business and can lead to its closure.(iv) Unlimited Liability The liability of the sole trader is unlimited in the sense that the business creditors | |
| 2988. |
Partner by estoppel and Partner by holding out means the same..?? |
| Answer» What is business<br>Partner by estoppel is one who by his conduct allow him to be represented as a partner of a firm. If anyone advances money to the firm on the basis of his representation, then he becomes liable to that third party and cannot deny its claim.Partner by holding out is the one who does not deny when he is declared as a partner of a firm. If anyone advances money to the firm on the basis of his declaration, then he becomes liable to that third party and cannot deny its claim.Both the partner by estoppel and partner by holding out are nominal partners. They just differ on a point that the partner by estoppel represent himself as a partner while partner by holding out is declared as a partner.\xa0\xa0Detailed explanation:Partner by EstoppelPartners by Estoppel is a person who represents himself/herself as a partner of a firm through his/her own conduct or behaviour or attitude. Such partners are held liable for any credits or debts obtained by such representation. In short, such partners cannot deny being a partner if he/she represents himself/herself as a partner of the firm.For example,\xa0P and Q are the partners and R is a friend of P. They asked R to allow them to use his name for their business. R agrees on this. Let us assume that P and Q took a loan from a bank against R\'s name and subsequently P and Q became insolvent. In this case, R would be considered as a partner of the firm and would be held liable for such loan.\xa0Partner by Holding OutPartner by Holding Out is a person who is not a partner in a firm but intentionally or deliberately allows himself/herself to be represented as a partner of the firm. Such partners are held liable to the outsiders for any credit or debts extended to the firm on the basis of such representation. Such a partner can refused to be a partner of a firm immediately by issuing his/her denial and describing his/her position that he/she is not a partner on such representation. But if he/she remain silent on such representation then he/she would be held liable to the third parties.Example:\xa0Let us suppose an instance, where R is represented as a partner by P an Q in their partnership firm at the time of applying loan from a bank, meanwhile, R (knowingly) remained silent on this statement of P and Q. Now, if P and Q became insolvent and failed to repay the bank loan, then in this case R will be liable to repay the loan, as P and Q applied loan against his name with the consent of R. | |
| 2989. |
I want business studies chapter 1to 7 notes |
| Answer» Available in this app | |
| 2990. |
Mention aids to trade |
| Answer» | |
| 2991. |
What do you mean by cooperative organisation? |
| Answer» A cooperative organisation is an association of persons, usually of limited means, who have voluntarily joined together to achieve a common eco\xadnomic end through the formation of a democratically controlled organisation, making equitable dis\xadtributions to the capital required, and accepting a fair share of risk and benefits of the undertaking. | |
| 2992. |
Explain the principal of "first serve then earn profit |
| Answer» | |
| 2993. |
When is statutory corporation suitable for organising public Enterprise..?? |
| Answer» Suitability:\xa0The public corporation is suitable where the undertakings require:\tmonopoly powers.\tspecial powers, defined by the act or statute.\tregular grants from the government.\tan appropriate combination of public accountability & operational autonomy. | |
| 2994. |
What is government company ❓ ?.. |
| Answer» Thanks yogita..☺️<br>Government Company is a company or an organization in which at least 51% of the paid up share capital is held by the central government or the state government or partly by both central and\xa0state government. These are many government companies, few of them are, Steel\xa0Authority\xa0of India Limited, Bharat Heavy Electricals Limited, Coal India Limited, State Trading Corporation of India, etc. | |
| 2995. |
What is the syllabus of business studies??? |
| Answer» Management – concept, objectives, and importance. Management as Science, Art and Profession. Levels of Management. Management functions-planning, organising, staffing, directing and controlling. | |
| 2996. |
Describe the various types of business finance and their uses? |
| Answer» lassification of Sources of Funds\xa0\xa0\xa0Period Basis\tOn the basis of period, the different sources of funds can be categorized into three parts. These are long-term sources, medium-term sources and short-term sources.\tThe long-term sources fulfill the financial requirements of an enterprise for a period exceeding 5 years and include sources such as shares and debentures, long-term borrowings and loans from financial institutions.\tSuch financing is generally required for the acquisition of fixed assets such as equipment, plant, etc.\tWhere the funds are required for a period of more than one year but less than five years, medium-term sources of finance are used. These sources include borrowings from commercial banks, public deposits, lease financing and loans from financial institutions.\tShort-term funds are those which are required for a period not exceeding one year. Trade credit, loans from commercial banks and commercial papers are some of the examples of the sources that provide funds for short duration.\tShort-term financing is most common for financing of current assets such as accounts receivable and inventories. Seasonal businesses that must build inventories in anticipation of selling requirements often need short-term financing for the interim period between seasons. Wholesalers and manufacturers with a major portion of their assets tied up in inventories or receivables also require large amount of funds for a short period.\xa0\xa0Ownership Basis\tOn the basis of ownership, the sources can be classified into ‘owner’s funds’ and ‘borrowed funds’.\tOwner’s funds means funds that are provided by the owners of an enterprise, which may\xa0be a sole trader or partners or shareholders of a company. Apart from capital, it also includes profits reinvested in the business.\tThe owner’s capital remains invested in the business for a longer duration and is not required to be refunded during the life period of the business.\tSuch capital forms the basis on which owners acquire their right of control of management. Issue of equity shares and retained earnings are the two important sources from where owner’s funds can be obtained.\t‘Borrowed funds’ on the other hand, refer to the funds raised through loans or borrowings.\tThe sources for raising borrowed funds include loans from commercial banks, loans from financial institutions, issue of debentures, public deposits and trade credit.\tSuch sources provide funds for a specified period, on certain terms and conditions and have to be repaid after the expiry of that period. A fixed rate of interest is paid by the borrowers on such funds.\tAt times it puts a lot of burden on the business as payment of interest is to be made even when the earnings are low or when loss is incurred. Generally, borrowed funds are provided on the security of some fixed assets.\xa0\xa0Source of Generation Basis\tAnother basis of categorizing the sources of funds can be whether the funds are generated from within the organization or from external sources.\tInternal sources of funds are those that are generated from within the business. A business, for example, can generate funds internally by accelerating collection of receivables, disposing of surplus inventories and Ploughing back its profit. The internal sources of funds can fulfill only limited needs of the business.\tExternal sources of funds include those sources that lie outside an organization, such as suppliers, lenders, and investors. When large amount of money is required to be raised, it is generally done through the use of external sources.\tExternal funds may be costly as compared to those raised through internal sources. In some cases, business is required to mortgage its assets as security while obtaining funds from external sources. Issue of debentures, borrowing from commercial banks and financial institutions and accepting public deposits are some of the examples of external sources of funds commonly used by business organizations.<br>NEED OF BUSINESS FINANCE:1.\xa0Fixed Capital Requirement:\xa0In order to start a business, funds are needed to purchase fixed assets like land and building, plant and machinery.The funds required in fixed assest remain invested in the business for a long period of time.2. Working Capital Requirement:\xa0A business needs funds for its day to day operation. This is known as working Capital requirements. Working capital is required for purchase of raw materials, to pay salaries, wages, rent and taxes.3. Diversification:\xa0A company needs more funds to diversify its operation to become a multi-product company e.g. ITC.4. Technology upgradation: Finance is needed to adopt modern technology for example uses of computers in business.5. Growth and expansion:\xa0Higher growth of a business enterprise requires higher investment in fixed assets. So finance is needed for growth and expansion. | |
| 2997. |
Explain the role of IDRs, ADRs and GDRs as a source of finance for Indian industries |
| Answer» Global Depository Receipts (GDR) are the depository receipts denominated in US dollars issued by depository bank to which the local currency shares of a company are delivered. GDR is a negotiable instrument and can be traded freely like any other security. In the Indian context, a GDR is an instrument issued abroad by an Indian company to raise funds in some foreign currency and is listed and traded on a foreign stock exchange.American Depository Receipts (ADR) The depository receipts issued by a company in the USA are known as American Depository Receipts. ADRs are bought and sold in American markets like regular stocks. ADR is similar to a GDR except that it can be issued only to American citizens and can be listed and traded on a stock exchange of USA.Indian Depository Receipt-\xa0IDR is a financial instrument. It is issued by domestic depository to the Indian citizens against the shares of foreign company. IDR is denominated in Indian rupees. It helps issuing company, i.e. foreign companies to raise capital from Indian securities market.\xa0\xa0 | |
| 2998. |
Is cloth making a manufacturing industry why |
| Answer» Yes cloth making is a manufacturing industry | |
| 2999. |
Difference b/w business, employment and profession ? |
| Answer» ProfessionsProfessions includes those activities, which require special knowledge & skill to be applied by individuals in their occupation. Those engaged in professions are known as professionals. Professionals are generally subjected to guidelines or codes of conduct laid down by professional bodies.Examples: lawyers are engaged in the legal\xa0profession, governed by the bar council of India & chartered accountants belonging to the accounting profession are subject to the regulations of the Institute of chartered accountants of India.EmploymentGetting remunerated in return for the work done for others refers to an employee. Employees are the people who are employed by others. Thus, people who work in factories, offices of banks, insurance companies or government department, etc at various posts are the employees of these organizations. They receive wages & salaries. Examples: working in offices, banks, insurance companies, shops, as a manager, clerk, peon, salesman etc. | |
| 3000. |
Difference b/w Life Insurance ?& Fire Insurance ? |
| Answer» The main\xa0difference between Fire Insurance\xa0and\xa0Life Insurance\xa0is,\xa0fire insurance\xa0covers the losses caused by the properties of the policyholder whereas\xa0life insurance\xa0covers the losses that happened to the person of the policyholder. Life insurance covers your life. In case of policyholder’s premature demise within the policy term, the insurance company pays the sum assured to the nominee. One of the most essential financial instruments, life insurance helps your family to stay financially independent, square off liabilities taken in the form of loans, maintain the lifestyle provided, and keep essential goals on track. | |