Test: Sources Of Business Finance - 1


10 Questions MCQ Test Business Studies (BST) Class 11 | Test: Sources Of Business Finance - 1


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This mock test of Test: Sources Of Business Finance - 1 for Commerce helps you for every Commerce entrance exam. This contains 10 Multiple Choice Questions for Commerce Test: Sources Of Business Finance - 1 (mcq) to study with solutions a complete question bank. The solved questions answers in this Test: Sources Of Business Finance - 1 quiz give you a good mix of easy questions and tough questions. Commerce students definitely take this Test: Sources Of Business Finance - 1 exercise for a better result in the exam. You can find other Test: Sources Of Business Finance - 1 extra questions, long questions & short questions for Commerce on EduRev as well by searching above.
QUESTION: 1

This a MCQ (Multiple Choice Question) based practice test of Chapter 7 - Sources of Business Finance of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinations

Q  A person who purchases common stock of a corporation is known as:

Solution:

Common stock is what most people think of when they think "stock." Common stock allows its holders to make a profit through rising share prices and dividend payments. Holders of common stock also get to vote on corporate issues, such as electing new directors to the corporation's board. However, should the company end up in bankruptcy, holders of common stock are last on the list to get their money back -- after regular creditors, bondholders, and holders of preferred stock. If you hold common stock and the company goes bust, you are unlikely to get any of your capital back.

QUESTION: 2

The term 'redeemable' is used for

Solution:

Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days after which it has to be redeemed.

QUESTION: 3

Funds required for purchasing current assets is an example of

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QUESTION: 4

ADRs are issued in

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QUESTION: 5

Public deposits are the deposits that are raised directly from

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QUESTION: 6

Under the lease agreement, the lessee gets the right to

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QUESTION: 7

Debentures represent

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QUESTION: 8

Under the factoring arrangement, the factor

Solution:

Factoring involves the sale of receivables to a finance company, which is called the factor. Under a factoring arrangement, the customer is notified that it should now remit payments to the factor. The factor assumes collection risk. Thus, the transferor has no further involvement with customer payments. Essentially, a factoring transaction is recorded as a sale of the receivables, and a gain or loss (usually a loss) is recognized on the receivable transferred to the factor Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

QUESTION: 9

The maturity period of a commercial paper usually ranges from

Solution:

Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days after which it has to be redeemed.

QUESTION: 10

Internal sources of capital are those that are

Solution:

The way of classifying the sources of funds is whether the funds are generated from within the organization or from external sources of the organization. Internal sources of funds are those that are generated inside the business. A business, for example, can generate funds internally by speeding collection of receivables, disposing of surplus inventories and increasing its profit. The internal sources of funds can fulfil only limited needs of the business.

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