Explore topic-wise InterviewSolutions in Current Affairs.

This section includes 7 InterviewSolutions, each offering curated multiple-choice questions to sharpen your Current Affairs knowledge and support exam preparation. Choose a topic below to get started.

1.	Name the fund needed for day-to-day operations of business.
Answer» Correct Answer - Working capital.

2.	What is the status of debentureholders ?
Answer» Debentureholders are considered as the creditors of the company.

3.	Why are retained profit called self financing ?
Answer» This is because the firm itself generates them.

4.	Who are called the owners of a company ?
Answer» Equity shareholders.

5.	Name the first bank which issued IDR.
Answer» Standard Chartered Bank.

6.	Which deposits are directly raised from the public ?
Answer» Correct Answer - Public deposits.

7.	As a source of finance, retained profit is better than other sources. Do you agree with this view? Give reasons to support your answer.
Answer» Yes. It is right to say that retained profit is better than other sources because of the following reasons. (Explain the advantages of retained profits)

8.	Why are the financial institutions also known as Development Banks ?
Answer» As these institutions provide long and medium-term loans for development and growth of industry.

9.	Name three national level financial institutions and state their objectives.
Answer» The three national level finacial institutions are : 1. Industrial Finance Corporation of India (IFCI) 2. Industrial Credit and Investment Corporation of India (ICIC) 3. Industrial Development Bank of India (IDBI).

10.	Discuss the sources from which a large industrial enterprise can raise capital for financing modernisation and expension.
Answer» Equity share, preference shares, debenture, loan from financial institutions public deposits.

11.	What preferential rights are enjoyed by preference shareholders ? Explain.
Answer» The preferential rights enjoyed by preference shareholders are : (i) Preference over equity shareholder of investment amount during winding up.

12.	What is the difference between internal and extenal sources of raising funds? Explain.
Answer» Internal sources of finance are those which are generated from within the business e.g., funds collected from disposal of surplus inventories, collection of receivables, ploughing back its profit etc. External sources of funds include those sources that lie outside an organisation such as supplies, lenders and investors.

13.	Anshuman has beed successfully running a dinancial consultancy from for past five years. His company has become popular and enjoy good reputation. It has sufficient reserves of profit accumulated from last five years. He plans now to start branches in Bangalore and Mumbai also. For expanding business does not want any additional liability. In the above contex : I. Suggest the source of finance suitable to Anshumaan for expansion. II. Give any merits and Demerits of that source.
Answer» I. "Retained Earnings." II. Merits and Demerits.

14.	Because of festival season Bhuvan Garments received double orders. Advise the company the various sources of finance, which used to raise necessary finance for this purpose.
Answer» As the company needs finance for short period of time to meet the pending orders, so common sources of finance are : (i) Trade credit (ii) Banks.

15.	ABC Ltd. Is an auto spare parts manufacturing company. The company has issued equity and preference shares to meet its requirement. Other sources of finance have not been considered at all. This has resulted in payment of large amount of taxes to government as divident on shares is not deducted from income of the company for the purpose of tax calculation. (a) State the source of finance which can give benefit saving. (b) State other factors which are kept in mine selecting source of finance.
Answer» (a) Borrowed fund, i.e., debentures, loan, public deposits, ect., as interest on these is treated as a expense.

16.	ABC Ltd. is planning to modernise its plant with latest technology. The company is not having sufficient money. The finance manager plans to arrange money for 3 years as after three years, the company is expected a good reture from their previous investment. The finance manager do not want to spend flotation cost ant do not want to approach stock exchange. (a) Suggest the suitable source of finance in above case. (b) How can company approach public without spending on flotation cost ? (c ) State any two benefits of this source of finance.
Answer» (a) Public Deposits. By giving an advertisement.

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