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SP XII test 1(2)

Total questions: 150

Worksheet time: 1hrs 29mins

Name
Class
Date
1.

Finance is the management of ................. affairs of the company.

a)

monetary

b)

marketing

c)

production

2.

The sum of all ................. is gross working capital.

a)

expenses

b)

current assets

c)

current liabilities

3.

................. means mix up of various sources of funds in desired proportion.

a)

Capital budgeting

b)

Capital Structure

c)

Capital Goods

4.

A key determinant of success of any business function.

(a)  

5.

The process of converting raw material into finished goods.

(a)  

6.

The internal source of financing.

(a)  

7.

The ratio of different sources of funds in the total capital.

(a)  

8.

The business will require huge funds, if assets are acquired on lease basis.

a)

True

b)

False

9.

Business firm gives green signal to the project only when it is profitable

a)

True

b)

False

10.

Liberal credit policy creates a problem of bad debts.

a)

True

b)

False

11.

When there is boom in economy, sales will (a)  

12.

Planning of capital requirement is made by (a)  

13.

------------ shares carry dividend at fixed rate.

(a)  

14.

When there is ---------- in economy sales will increase.

(a)  

15.

FIND THE ODD ONE

a)

Land & Building

b)

Plant & Machinery

c)

Cash

16.

................. is a smallest unit in the total share capital of the company.

a)

Debenture

b)

Bonds

c)

Share

17.

The holder of preference share has right to receive ................. rate of divided.

a)

fixed

b)

fluctuating

c)

lower

18.

................. participate in the management of their company

a)

Preference Shareholders

b)

Depositors

c)

Equity Shareholders

19.

Accumulated dividend is paid to ................. preference shares.

a)

redeemable

b)

cummulative

c)

convertible

20.

A party through whom the company deals with debentureholders.

(a)  

21.

Company can accept deposits from public, minimum for ................. months.

a)

six

b)

twelve

c)

thirty-six

22.

A depository receipt traded in ................. is called American Depository receipt.

a)

London

b)

Paris

c)

New York

23.

................. is paid on borrowed capital.

a)

Discount

b)

Dividend

c)

Interest

24.

Credit extended by the suppliers with an intention to increase their sales.

(a)  

25.

Equity share capital is known as venture capital.

a)

True

b)

False

26.

Depository bank stores the shares on behalf of GDR holder

a)

True

b)

False

27.

The value of share which is written on the share certificate.

(a)  

28.

Cash credit is given against hypothecation of goods or any security.

a)

True

b)

False

29.

Debentureholder is (a)   of the company.

30.

FIND THE ODD ONE

a)

Face Value

b)

Market Value

c)

Redemption Value

31.

The convertible preference share holders have a right to convert their shares into (a)  

32.

Bond is a source of (a)   term finance.

33.

.................. are offered to permanent employees, Directors and Officers of a company.

a)

Bonus Shares

b)

Rights Issue

c)

ESOS

34.

Company can .................. shares on non-payment of calls.

a)

forfeit

b)

surrender

c)

allot

35.

Under .............., a company offers its securities to a select group of persons not exceeding 200.

a)

IPO

b)

Public Offer

c)

Private placement

36.

The .................. have the power to allot shares.

a)

Directors

b)

Board of Directors

c)

Company Secretary

37.

The gap between two calls should not be less than ..................

a)

14 days

b)

One-month

c)

21 days

38.

.................. of shares takes place due to operation of law.

a)

Transfer

b)

Surrender

c)

Transmission

39.

Share certificate is issued for partly or fully paid up shares.

a)

True

b)

False

40.

Actual number of shares offered to the public by the company for subscription is known as (a)   .

41.

When the shares are issued at a price more than the face value, it is known as share issued at (a)  

42.

A company must receive minimum subscription of (a)   of shares before it allots the share.

43.

A company issued 50,000,12% preference shares of Rs.100 each. Company received applications for 70,000 shares. This will be known as (a)   of shares.

44.

Which of the following capital is not shown in the company’s Balance Sheet

`

a)

Authorised capital

b)

Issued &subscribed capital

c)

Called-up & paid up-capital

d)

Reserve capital

45.

Figure out the Order -

1. Issued Capital

2. Subscribed Capital

3. Authorised Capital

4. Paid Up Capital

5. Called Up Capital

a)

2, 3, 5, 1, 4

b)

2, 1, 3, 5, 4

c)

3, 1, 2, 5, 4

d)

3, 2, 1, 4, 5

46.

What are the types of share capital? Check all that apply.

a)

Issued Capital

b)

Equity Share Capital

c)

Called Up Capital

d)

Paid Up Capital

e)

Preference Share Capital

47.

What is the Full Form of SEBI?

a)

Securities Exchange Beureau of India

b)

Shares Exchange Board of India

c)

Securities Exchange Board of India

d)

None of the options are correct

48.

Who are the real owners of a company?

a)

Government

b)

Board of Directors

c)

Equity shareholders

d)

Preference sharejolders

49.

Shareholders receive from the company :

a)

Interest

b)

Profit

c)

Commission

d)

Dividend

50.

Preference shareholders have

a)

Preferential right as to dividend only

b)

Preferential right in the management

c)

Preferential right as to repayment of capital at the time of liquidation of the company

d)

Preferential right as to dividend and repayment of capital at the time of liquidation of the Company

51.

The shares on which there is no pre-fixed rate of dividend is decided, but the rate of dividend is fluctuating every year according to the availability of profits, such shares are called :

a)

Equity Share

b)

Non-cumulative preference share

c)

Non-convertible preference share

d)

Non-participating preference share

52.

A preference share that does not carry the right of sharing in surplus profits is called ……………

a)

Non-Cumulative Preference Share

b)

Non-participating Preference Share

c)

Irredeemable Preference Share

d)

Non-convertible Preference Share

53.

Which shareholders are returned their capital after some specified time :

a)

Redeemable Preference Shares

b)

Cumulative Preference Shares

c)

Participating Preference Shares

d)

Convertible Preference Shares

54.

Maximum Number of Members in a private Company

a)

7

b)

200

c)

20

d)

150

55.

Which of the following statements is true

a)

Authorised Capital = Issued Capital

b)

Authorised Capital > Issued Capital

c)

Paid up Capital > Issued Capital

d)

None of the above

56.

Bonus Shares are issued free of cost to _____________

a)

Existing Employees

b)

Board of Directors

c)

Existing shareholders

57.

Voluntarily giving away one's share to another person is called as _________ of shares.

a)

Surrender

b)

Transfer

c)

Transmission

58.

Letter of ________ is sent to applicants who have been given shares by the company.

a)

Regret

b)

Renunciation

c)

Allotment

59.

__________ capital refers to the maximum capital a company can raise by issuing shares.

a)

Issued

b)

Authorized

c)

Paid up

60.

True or False: Only fully paid up shares can be forfeited.

a)

TRUE

b)

FALSE

61.

True or False: The member transferring shares is called the transferor.

a)

TRUE

b)

FALSE

62.

True or False: Floor price is the highest bid price under Book Building Method.

a)

TRUE

b)

FALSE

63.

Find the odd one:

a)

ESOS

b)

ESPS

c)

RIGHT SHARES

d)

SWEAT EQUITY SHARES

64.

Find the odd one:

a)

Allotment of shares

b)

Forfeiture of shares

c)

Surrender of shares

65.

Find the odd one:

a)

Face value

b)

Floor price

c)

Cap Price

d)

Cut off Price

66.

Issue of shares at a price lower than its face value is called :

a)

Issue at a Loss

b)

Issue at a Profit

c)

Issue at a Discount

d)

Issue at a Premium

67.

Shares are always issued at par

a)

True

b)

False

68.

Debenture certificate must be issued within .................. of allotment of debentures

a)

3 months

b)

6 months

c)

60 days

69.

Net Working Capital refers to

a)

total assets minus fixed assets

b)

current assets minus inventories

c)

current assets minus current liabilities

d)

current assets

70.

Procedure for allotment of Debenture should be completed within .................. from the date of receipt of applications.

a)

6 months

b)

3 months

c)

60 days

71.

A company which issues prospectus or invites more than 500 persons to buy its debenture has to appoint ..................

a)

Register of Companies

b)

Debenture holders

c)

Debenture Trustees

72.

Special Resolution is needed to issue convertible debentures.

a)

True

b)

False

73.

Appropriation of shares to an applicant.

(a)  

74.

After allotment of Debentures names of Debenture holders are entered in the Register of Members.

a)

True

b)

False

75.

A debentureholder always gets

a)

Dividend

b)

Rights prescribed in articles

c)

Ownership of the company

d)

Interest at fixed rates

76.

For public issue or rights issue of convertible debentures, as per SEBI, a company must obtain (a)  

77.

To stop a company from incurring further liabilities, the Debenture trustee can approach (a)  

78.

A legal instrument conveying the assets of a company to the Debenture trustees is called (a)  

79.

Arrange in proper order.

a. Obtain Credit Rating. b. Entry in register of debenture c. Receive application with money

a)

a

c

b

b)

c

a

b

c)

a

b

c

80.

Secured debentures must be redeemed within (a)   years from the date of its issue.

81.

For public issue of debentures of ` 100 crores, minimum subscription should be ...................

a)

90% of the issue

b)

75% of the issue

c)

60% of the issue

82.

A company issuing (a)   debentures must create a charge on assets of the company.

83.

Subscribe share capital can be less than or equal to the issued share capital but cannot be more

a)

True

b)

False

84.

Financial Planning helps in...

a)

Managing Business

b)

Managing Human Resources

c)

Forecasting Business Situations

d)

All of the above

85.

Which of the following can't be a Capital Structure?

a)

Equity + Debentures

b)

Equity only

c)

Preference Shares only

d)

Equity + Preference

86.

Which is the cheapest Source of Finance

a)

Debt

b)

Equity

87.

Minimum subscription in case of issue of shares must be collected within _______ days from issue of prospectus.

a)

60

b)

30

c)

21

d)

90

88.

The inability of a business to meet its fixed financial obligations, like payment of interest, is known as

a)

Business risk

b)

Financial risk

c)

Long-term risk

d)

Market risk

89.

This decision is about the quantum of finance to be raised from various long-term sources.

a)

Investment decision

b)

Financing decision

c)

Dividend decision

d)

Capital budgeting decision

90.

It is essentially the preparation of a financial blueprint of an organisation’s future operations.

Identify the related concept.

a)

Financial management

b)

Financial planning

c)

Capital budgeting decisions

d)

Dividend decision

91.

Owned capital is regarded as a________________ capital .

a)

permanent

b)

temporary

c)

Debenture

d)

Borrowed

92.

Capital raised by the company with the help of debentures is called _______________ capital

a)

Owned

b)

Borrowed

c)

Retained

d)

Public

93.

Share provide ______________ sources of capital for a new company .

a)

temporary

b)

fixed

c)

initial

d)

borrowed

94.

The term share has been defined by section _________ of the companies Act 2013.

a)

3(45)

b)

7(7)

c)

2(84)

d)

2(48)

95.

The various sources of finance can be divided as _________ capital and ________ capital

a)

owned & borrowed

b)

owned and retained earning

c)

owned and debenture

d)

owned and shares

96.

A person who purchase share of a company is known as a ________________

a)

bondholder

b)

debenture holder

c)

shareholder

d)

depositor

97.

Fill in the blanks:

Dividend on ______ shares is paid after paying dividend on ________ shares.

a)

sweat equity , preference

b)

bonus, rights

c)

equity, preference

d)

Sweat equity, equity

98.

Long Term and Short Term funds can be raised from two types of sources. What are they?

a)

Owned Funds

b)

Collected Funds

c)

Sold Funds

d)

Borrowed Funds or Loan Capital

99.

Which of the following is NOT an advantage of equity shares?

a)

Source of Strength

b)

No burden on profits

c)

No charge on assets

d)

Permanent Capital

100.

Funds raised through _____ provide a financial base to the Company.

a)

shares

b)

equity shares

c)

preference shares

d)

bonus shares

101.

Retained earnings are also called_______

a)

Ploughing ahead of profits

b)

Ploughing back of profits

c)

Ploughing of profits

102.

A ____________ is a document or certificate issued by a company as proof of the money lent to it by the holder.

a)

Debenture

b)

Denture

c)

Share

103.

Commercial banks usually provide ______ finance because most of their deposits are ______ deposits.

a)

long-term, short-term

b)

long-term, long-term

c)

short-term, long-term

d)

Short-term, short-term

104.

What do Debentures denote?

a)

Buying by a company

b)

Selling by a company.

c)

Borrowing by a company.

d)

Borrowing of a company

105.

(a)   is an instrument of acknowledgement of debt, but it does not carry a pre-determined rate of interest.

106.

Life Insurance Corporation of India (LIC) is an example of

a)

Development Banks

b)

State Level Institutions

c)

Financial Institutions

d)

Investment Institutions

107.

Under the Companies Act, 2013,A company making a public offer in excess of Rs. ____ crores have to issue shares (securities) in dematerialised form.

a)

100

b)

50

c)

10

d)

25

108.

Identify the various types of Debentures:

a)

Redeemable

b)

Irredeemable

c)

Short

d)

Convertible

e)

Non-Convertible

109.

Full form of TDS

(a)  

110.

Investors who want steady income may not prefer ____________

a)

Equity Shares

b)

Debentures

c)

Bonds

111.

trade credit is a medium-term source of funds

a)

TRUE

b)

FALSE

112.

convertible preference shares can be converted into equity shares within a specific time period

a)

TRUE

b)

FALSE

113.
Shares cannot be issued at ……………….. by a new company.
a)
par
b)
premium
c)
zero
d)
discount
114.

The application money should be refund within (a)   days from the closure of the issue.

115.

Debentures are said to be issued at Discount when

a)

I.P. = F.V.

b)

I.P. > F.V.

c)

I.P. < F.V.

d)

Any of these

116.

Debentures can be issued at

a)

Par

b)

Premium

c)

Discount

d)

Par or Premium or Discount

117.

Debenture interest is paid

a)

At a predetermined rate

b)

At variable rate

c)

At a rate based on net profit of the company

d)

At a rate as determined by the company from time to time

118.

Debenture holders are

a)

Owners of the company

b)

Lenders of the company

c)

Vendors of the company

d)

Customers of the company

119.

Authority to create charge on company’s assets is with the (a)  

120.

Account to be created for redemption of debentures.

(a)  

121.

FIND ODD ONE

a)

Debenture Trustees

b)

Court

c)

NCLT

122.

Debenture trustees are appointed to protect the interest of shareholders.

a)

True

b)

False

123.

What is meant by a Debenture ?

a)

Debenture is an oral acknowledgement of debt taken by company

b)

Debenture is a written acknowledgement of debt taken by company

c)

Debenture may be written or oral acknowledgement of debt taken by company

d)

None of these

124.

Pre-emptive right given to existing Equity shareholders to subscribe to new issue of shares by company.

(a)  

125.

Arrange in Proper Order

a. Issue debenture certificate b. Issue prospectus c. Open bank Account

a)

a

b

c

b)

c

a

b

c)

b

c

a

d)

b

a

c

126.

A company can issue .................. convertible debentures.

a)

only partly

b)

only fully

c)

Partly or fully

127.

Under ___________ method, the price of shares is fixed through bidding process.

a)

Fixed Price Issue

b)

IPO

c)

FPO

d)

Book building

128.

What is the value of zero coupon bond sold @ 800 maturity 7 years form now discount rate 14%

a)

5600

b)

450

c)

399

d)

1000

129.

A bond issued by a corporation is called a ________ .

a)

corporate bond

b)

market share

c)

stock option

d)

share of stock

130.

Capital budgeting is related to ____________ assets

a)

long term

b)

short term

c)

long term and short term

d)

fixed

131.

  1. Funds required for purchasing current assets is an example of

a)

fixed capital requirement

b)

ploughing back of profits

c)

working capital requirement

d)

lease financing

132.

  1. The term 'redeemable' is used for

a)

Equity Shares

b)

Deposits

c)

Commercial Paper

d)

Preference Shares

133.

FIND THE ODD ONE

a)

ESOS

b)

ESPS

c)

Rights Share

d)

Sweat Equity

134.

If the credit is extended by one trader to another for the purchase of goods and services it is called

a)

loan

b)

debt

c)

asset

d)

trade credit

135.

GDR stands for

a)

Gross Domestic Receipts

b)

Government Direct Receipts

c)

Global Depository Receipts

d)

Gramin Deposit Receipts

136.

Where the funds are required for a period of more than one year but less than five years, which sources are used

a)

long term

b)

medium term

c)

short term

d)

very short term

137.

When issuers are allowed to offer and sell securities to the public without issuing a separate prospectus for each act of offering is called

a)

Red Herring Prosectus

b)

Shelf prospectus

c)

SILOP

d)

Deemed prospectus

138.

In which year present Companies Act comes into force?

a)

1956

b)

2013

c)

2018

d)

2020

139.

The business will require huge funds, if assets are acquired on lease basis

a)

True

b)

False

140.

Under this scheme the employees are given a right to receive appreciation in the value of specified number of shares of the company at a future date.

a)

ESOS

b)

Sweat Equity

c)

SARS

d)

ESPS

141.

The decision of finance manager which ensures that firm is well capitalised.

(a)  

142.

The benefit of Depository Receipt is ability to raise capital in ................. market.

a)

Local

b)

National

c)

International

143.

As per Section 55(1) of the Companies Act 2013, a company cannot issue (a)   preference shares.

144.

Attitude of top management also determines the amount of ________

a)

Equity Share Capital

b)

Debentures

c)

Deposits

d)

Retained Earnings

145.

The face value of debenture normally carries _____ denomination.

a)

fixed

b)

low

c)

high

146.
Which financial decision help a businessman in opening a new branch of its business. 
a)
Financing decision
b)
Dividend decision
c)
Investment decision
d)
None of the above
147.

Company's share urgently transferable

a)

True

b)

False

148.

AOA must authorise the issue of bonus shares.

a)

True

b)

False

149.

The shares on which there is no pre-fixed rate of dividend is decided, but the rate of dividend is fluctuating every year according to the availability of profits, such shares are called :

a)

Equity Share

b)

Non-cumulative preference share

c)

Non-convertible preference share

d)

Non-participating preference share

150.

Bonus Shares are issued at a discounted price to the Equity shareholders

a)

True

b)

False

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