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B Com Exam  >  B Com Test  >  Financial Markets and Institutions  >  Test: Financial Services - 2 - B Com MCQ

Financial Services - 2 - B Com Markets and Institutions Free MCQ Test


MCQ Practice Test & Solutions: Test: Financial Services - 2 (10 Questions)

You can prepare effectively for B Com Financial Markets and Institutions with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: Financial Services - 2". These 10 questions have been designed by the experts with the latest curriculum of B Com 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 10 minutes
  • - Number of Questions: 10

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Test: Financial Services - 2 - Question 1
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What is the main advantage of Hire Purchase?

Detailed Solution: Question 1

The main advantage of Hire Purchase is that it allows immediate use of assets without paying the entire amount. This means that companies can start using the asset from the very first day and use the money earned to later buy the same assets.

Test: Financial Services - 2 - Question 2
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What is the definition of Factoring?

Detailed Solution: Question 2

Factoring is defined as "an outright purchase of credit approved accounts receivables, with the factor assuming bad debt losses." It involves a financing institution taking over the credit control and collection functions for its client and purchasing their receivables as they arise.

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Test: Financial Services - 2 - Question 3
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Which type of factoring involves the factor having no recourse to the client when the bill remains unpaid by the customer?

Detailed Solution: Question 3

Non-Recourse Factoring is a type of factoring where the factor has no recourse to the client when the bill remains unpaid by the customer. This means that the factor absorbs the risk of bad debts.

Test: Financial Services - 2 - Question 4
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What is the advantage of Bill Discounting?

Detailed Solution: Question 4

The advantage of Bill Discounting is that it improves the current ratio and working capital management. It allows the seller to get funds earlier on a small fee or discount, which helps in better liquidity and the ability to offer better credit terms to customers.

Test: Financial Services - 2 - Question 5
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What tax benefits are provided in India to boost housing finance?

Detailed Solution: Question 5

In India, tax benefits are provided to boost housing finance. These benefits include INR. 30,000 tax relief for house renovation work, interest payment up to INR. 200,000 per year can be written off from the gross income, and the principal paid is covered under section 80C while computing income tax.

Test: Financial Services - 2 - Question 6
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What is the main purpose of Housing Finance?

Detailed Solution: Question 6

The main purpose of Housing Finance is to encourage the construction of more houses and improve infrastructure facilities. It helps in creating employment, boosting industries, developing rural areas, and reducing congestion in urban areas.

Test: Financial Services - 2 - Question 7
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Which institutions provide housing finance at the international level?

Detailed Solution: Question 7

At the international level, institutions such as the World Bank and Asian Development Bank provide housing finance through grants and loans, especially for removing slums and creating housing colonies.

Test: Financial Services - 2 - Question 8
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What is the main feature of Hire Purchase?

Detailed Solution: Question 8

The main feature of Hire Purchase is that the hirer has the option to purchase and own the asset once all the agreed payments have been made. Until then, the asset is let on hire and the hirer pays regular installments, including an interest component.

Test: Financial Services - 2 - Question 9
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What is the definition of Hire Purchase?

Detailed Solution: Question 9

Hire Purchase is defined as an agreement in which the owner of the assets lets them on hire for regular installments paid by the hirer. The hirer has the option to purchase and own the asset once all the agreed payments have been made.

Test: Financial Services - 2 - Question 10
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What is the main advantage of Factoring?

Detailed Solution: Question 10

The main advantage of Factoring is that the factor takes over the risk burden of the client. The factor assumes the credit control, protection, and collection functions for its client, which helps in reducing the risk of bad debts.

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About this B Com Practice Test

This test contains 10 MCQs on Financial Services - 2 with detailed solutions for each question. It is part of the Financial Markets and Institutions course on EduRev, designed to align with the current B Com syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

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