Which of the following securities proves a burden on finances of the company,
when company is not earning profits?
A. Equity shares.
B. Preference shares.
C. Redeemable preference shares.
D. Debentures.

1 Answer

Answer :

D. Debentures.

Related questions

Description : Which one of the following securities cannot be issued by a Public Limited Company in India ? (A) Participating preference shares (B) Redeemable preference shares (C) Deferred shares (D) Debentures.

Last Answer : Answer: Deferred shares

Description : A project, which may not add to the existing profits, should be financed by _________ A. debentures. B. preference share capital. C. equity capital. D. public deposits.

Last Answer : A. debentures.

Description : Investment in which of the following is most risky? A. Equity shares. B. Preference shares. C. Debentures. D. Land.

Last Answer : C. Debentures.

Description : Which of the following sources is not use for medium term financing? A. Issue of equity shares. B. Issue of debentures. C. Term loans from banks. D. Sale of current asset.

Last Answer : A. Issue of equity shares.

Description : What is Capital Redemption Reserve Account available for ? (A) Redemption of redeemable preference shares (B) Redemption of redeemable debentures (C) Reorganization of share capital (D) Issue of fully paid bonus shares

Last Answer : Answer: Issue of fully paid bonus shares

Description : Alfa Company Limited acquired the business of M/s Bharat Traders. The valuation of the items acquired was-building Rs. 1,20,000; machinery Rs. 80,000 and stock-in-trade Rs. 30,000. The company issued in lieu of the above items 800, ... ) Rs. 2,30,000 (B) Rs. 1,00,000 (C) Rs. 50,000 (D) Rs. 30,000

Last Answer : Answer: Rs. 30,000

Description : The importance of ‘Trading on Equity’ lies in the fact that if the company is earning more profit, it can make use of borrowed capital and preference share capital and by doing so, it can increase the income of: a. Preference Shareholders b. Lenders c. Equity Shareholders d. Government

Last Answer : c. Equity Shareholders

Description : Long-term debt securities issued by the GOI or any of the State Government‟s or undertakings owned by them or by development financial institutions are called as ________ A. Shares B. Debentures C. Bonds D. Both (A) and (C) E. None of the Above

Last Answer : C. Bonds Explanation: Long-term debt securities issued by the Government of India or any of the State Government‘s or undertakings owned by them or by development financial institutions are called as bonds.

Description : A part of debt instruments that are converted into Equity shares in the future at notice of the issuer is called _________ A. Secured Debentures B. Partly Convertible Debentures (PCD) C. Fully convertible Debentures (FCD) D. Optionally Convertible Debentures (OCD) E. Unsecured Debentures

Last Answer : B. Partly Convertible Debentures (PCD) Explanation: A part of these instruments are converted into Equity shares in the future at notice of the issuer. The issuer decides the ratio for conversion. This is normally decided at the time of subscription.

Description : Which of the following instruments retain the debt character and can not be converted in to equity shares? A. Non Convertible Debentures (NCD) B. Partly Convertible Debentures (PCD) C. Fully convertible Debentures (FCD) D. Optionally Convertible Debentures (OCD) E. None of the Above

Last Answer : A. Non Convertible Debentures (NCD) Explanation: Non Convertible Debentures instruments retain the debt character and can not be converted in to equity shares.

Description : Section 80 HHB provides for a deduction of ____________________ of profits and gains earned by a resident Indian company. A. 65%. B. 60%. C. 55%. D. 50%

Last Answer : D. 50%

Description : On 1st April, 2013, Y Ltd. Issued 1000, 12% debentures of Rs. 100 each at a discount of 6%. These debentures are redeemable in five equal annual instalments at the end of each year. What is the amount of discount to be written off ... & L A/c ? (A) Rs. 2000 (B) Rs. 1800 (C) Rs. 1200 (D) Rs. 600

Last Answer : Answer: Rs. 1200

Description : Reserve bank of India is a/an _______. A. statutory corporation. B. company limited by guarantee. C. company limited by shares. D. unlimited company.

Last Answer : A. statutory corporation.

Description : The amount deposited in Securities Premium Account can be used for– (A) Distributing profits (B) Issue of Bonus Shares (C) Paying the amount to director (D) None of the above

Last Answer : Answer: Issue of Bonus Shares

Description : Bonus Shares are issued to– (A) Equity Shareholders (B) Preference Shareholders (C) Debenture Holders (D) Secured Creditors

Last Answer : Answer: Equity Shareholders

Description : Which of the following has the highest cost of capital? A. Loans B. Equity shares C. Bonds D. Preference shares

Last Answer : B. Equity shares

Description : The return on investment (ROI) may be calculated as A. Net profit before interest, tax and dividend / Capital employed B. Net profit after interest, tax and dividend / Shareholder's fund C. ( Net profit - preference dividend )/ No. of equity shares D. Return on Investment / Net profit ratio

Last Answer : A. Net profit before interest, tax and dividend / Capital employed

Description : The dividend on equity shares is only paid when dividend on ------- has already been paid. A. Debenture B. Preference Shares C. Bond D. Equity Shares

Last Answer : B. Preference Shares

Description : Having less than 50 percent of equity share in an international venture is calleda) Minority interest b) Joint venture c) Majority interest d) Exporting

Last Answer : a) Minority interest

Description : ____________, which is included in the project cost, is estimated on the basis of the year when the enterprise breaks even. A. working capital B. cost of capital C. cost of production D. cost of equity

Last Answer : A. working capital

Description : Institutional agencies grant financial assistance to small scale industries for _________. A. participation in equity capital only. B. acquisition of fixed assets. C. working capital assistance. D. all of the above.

Last Answer : D. all of the above.

Description : A commercial banker would prefer a ____________ debt-equity ratio over the years as it indicates financial strength of a unit. A. Declining. B. Increasing. C. Stable. D. Fluctuating.

Last Answer : A. Declining A commercial banker would prefer a declining debt-equity ratio over the years as it indicates the financial strength of a unit. A declining debt-equity ratio means that the company ... fluctuating ratio might indicate that the company is not able to manage its debt and equity properly.

Description : Entrepreneurial development is the key to achieve all-round __________ through A. economic development B. increase in profits C. shareholders value D. business development

Last Answer : A. economic development

Description : Today, many companies are using managerial techniques that are designed to encourage _________. A. increasing profits B. legal compliances C. Ethical behaviour D. shareholders value

Last Answer : C. Ethical behaviour

Description : A valid definition of a business purpose is to ______. A. create a customer. B. maximize profits. C. serve the society. D. increase the wealth of the firm.

Last Answer : B. maximize profits.

Description : Under section 80J of the income tax act, 1961, small-scale industries are exempted from the payment of income tax on their profits at ___________. A. 6% p.a. B. 6% p.m. C. 5% p.a. D. 5% p.a.

Last Answer : A. 6% p.a.

Description : …………….. actions by an entrepreneur most likely to contribute to creative destruction. a) Development of a new product b) Take-over of a competitor c) Issuing shares d) Development of an organization

Last Answer : a) Development of a new product

Description : Which of the following leads to under-capitalization? A. raising of more money by issue of shares. B. acquiring fixed assets on excessive amounts. C. over-estimation of earnings for enterprise. D. under-estimation of initial rate of earnings.

Last Answer : D. under-estimation of initial rate of earnings.

Description : In case of a company, “Buy Back” is related to– (A) Prospectus (B) Shares (C) Debentures (D) Cheques

Last Answer : Answer: Shares

Description : A long-term security yielding a fixed rate of interest, issued by a company is called ________ A. Shares B. Debentures C. Bonds D. Both (A) and (C) E. None of the Above

Last Answer : B. Debentures Explanation: A debenture is a type of debt instrument that is not secured by physical assets or collateral. Instruments issued by companies are called debentures. The difference between the two is actually a function of where they are registered and pay stamp duty and how they trade.

Description : Which one of the following transactions changes the current ratio ? (A) Purchase of goods for cash (B) Plant acquired on account (C) Sold goods on credit (D) Debentures converted into equity capital

Last Answer : Answer: Plant acquired on account

Description : Globalization means --------------------------- : A. Establishing Company branches in other countries B. Adopting a global outlook C. Earning profits through Exports D. Attracting foreign Investments

Last Answer : Adopting a global outlook

Description : Liabilities (not accumulated profits) of a company include— A. General reserve B. Pension fund C. Dividend equalisation fund. D. Retain earning

Last Answer : B. Pension fund

Description : A newly established company cannot be successful in obtaining finance by way of A. issue of equity capital B. issue of preference share C. issue of debenture D. None of the above

Last Answer : C. issue of debenture

Description : Share premium account can be used for– (A) Paying tax liability (B) Meeting the cost of issue of shares or debentures (C) Paying Dividend on shares (D) Meeting the loss on sale of old asset

Last Answer : Answer: Meeting the cost of issue of shares or debentures

Description : In which of the following instruments the investor has the option to either convert these debentures into shares at price decided by the issuer/agreed upon at the time of issue. A. Non Convertible ... Fully convertible Debentures (FCD) D. Optionally Convertible Debentures (OCD) E. None of the Above

Last Answer : D. Optionally Convertible Debentures (OCD) Explanation: The investor has the option to either convert these debentures into shares at price decided by the issuer/agreed upon at the time of issue.

Description : As a new company grows, the entrepreneur will need to _________. A. be responsive to changes in the market. B. ensure financial controls are maintained. C. build a management team. D. all the above.

Last Answer : D. all the above.

Description : The charter of a company is its ______. A. prospectus. B. statement lieu of prospectus. C. memorandum of association. D. articles of association.

Last Answer : A. prospectus.

Description : A Company is called an artificial person because ____. A. it does not have the shape of a natural person. B. it cannot be used in the court of law. C. it is invisible and intangible. D. it exists only in contemplation of law.

Last Answer : C. it is invisible and intangible.

Description : Memorandum of association of a firm contains _______. A. rules regarding the internal management of the company. B. rules regarding the constitution and activities of the company. C. rules regarding the external management. D. rules regarding the constitution.

Last Answer : B. rules regarding the constitution and activities of the company.

Description : The oldest form of business organization is ______. A. Partnership. B. sole proprietorship. C. joint stock company. D. co-operative undertaking.

Last Answer : B. sole proprietorship.

Description : Promoter is a person who ________. A. takes part in the incorporation of a company . B. is a director. C. is a relative of the managing director. D. works to publicity to the company.

Last Answer : A. takes part in the incorporation of a company .

Description : A public corporation means _____. A. public company. B. government company. C. statutory corporation. D. department of union government

Last Answer : C. statutory corporation.

Description : The type of diversification in which the company adds up same type of products at the same level of production is ____________. A. conglomerate diversification. B. horizontal integration. C. vertical integration. D. concentric integration.

Last Answer : B. horizontal integration.

Description : The type of diversification in which the company adds complementary to the existing product or service line is _________. A. conglomerate diversification. B. horizontal integration. C. vertical integration. D. concentric integration.

Last Answer : C. vertical integration.

Description : A business arrangement where one party allows another party to use a business Name and sell its products or services is known as__________. A. A cooperative. B. A franchise. C. An owner-manager business. D. A limited company

Last Answer : B. A franchise.

Description : SFC is prohibited from granting financial assistance to any company whose aggregate paid up capital exceed__________. A. 1 crore. B. 1.5 crores. C. 2 crores. D. 2.5 crores.

Last Answer : A. 1 crore.

Description : IFCI has been converted into a________. A. joint stock company. B. co-operative society. C. partnership firm. D. sole proprietorship.

Last Answer : A. joint stock company.

Description : Good sources of information for an entrepreneur about competitors can be obtained from_________. A. Websites. B. Product information leaflets. C. Company reports and published accounts. D. All the above.

Last Answer : D. All the above.

Description : A business arrangement where one party allows another party to use a business name and sell its products or services is known as__________. A. A cooperative. B. A franchise. C. An owner-manager business. D. A limited company.

Last Answer : B. A franchise.