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

1.

Debentureholders entitled to a fixed rate of interst. True/False? Give reasons.

Answer» True : Debentures carry a fixed rate of interest. Interest on debentures is a charge against the profits of a company. It has to be paid even if the company suffers losses.
Discussion
2.

Why is equity share capital called the permanent capital ?

Answer» Because it is to be paid only at the time of liquidation of a company.
Discussion
3.

A company wants to issued such shares which do not have the right of preferenc for payment of dividend and refund of capital a the time of liquidation. Identify such shares.

Answer» Correct Answer - Equity Shares
Discussion
4.

Match the columns : `{:((i),"If facilitates the pruchase of goods and services without making immediate payment",(a),"Trade Crdit"),((ii),"It refers to that part of profits which is kept and reserve for use in the future.",(b),"Preference Shares"),((iii),"This source of finance has characteristics of both equity shares and debentures",(c),"Retained Earnings"):}`

Answer» (i)-(a),(ii)-(c),(iii)-(b)
Discussion
5.

____________ is commonly used by business oranisations as a source of short-terms financing.A. Leas finacncingB. ADRsC. Trade CreditD. None of these

Answer» Correct Answer - C.Trade Credit
Discussion
6.

Fashion, Hut, a reputed garments mkanufactring units needs to meet its day-to-day expenses like wages, rent, maintaining stock of raw material etc. The owner approaches the supplier of the raw matirals to give credit for two months, so that he can get cloth for making garments without immediate payment. The supliers made an enquiry regarding the business organisation and found that its reputation was very good. So it extended tow montsh credit to it. Identify the source of the fincance discussed above. s

Answer» Correct Answer - Trade credit
Discussion
7.

Name the source of finance which is available in the normal course of purchase of goods.

Answer» Correct Answer - Trade credit
Discussion
8.

C Ltd. Planing to modersine its plant ith laest technology. The company is not having sufficient money. The finance manager plance to arrange money 3 years since after that the company is expecting a good return on investment. The finance manager does not want to speed on floation costs on issue of shares or debentures. Identify the suitable source of finance for the company

Answer» Correct Answer - Public Deposits
Discussion
9.

Finance invested in fixed assets is called working capita. True./False? Given reason.

Answer» False It is called fixed capital.
Discussion
10.

Wokring capital raised through short-term funds. Ture/Fase/ Give reason.

Answer» True Working capital is required to meet day-to day expenses. So it, is raised through short-term soruce like trade credit, factoring, banks, commerical paper etc.
Discussion