Tag: commercial studies

Questions Related to commercial studies

Debenture holders are the _________of the company.

commercial studies sources of business finance - 2 debentures / bonds debentures non-institutional sources - long-term

  1. Creditors

  2. Owners

  3. Quasi

  4. Deemed owner

Show answer
Correct Option: A
Explanation:

A creditor is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed.[1] The first party, in general, has provided some property or service to the second party under the assumption (usually enforced by contract) that the second party will return an equivalent property and service. The second party is frequently called a debtor  or borrower. The first party is called the creditor, which is the lender of property, service, or money.

Creditors can be broadly divided into two categories: secured and unsecured. A secured creditor has a security or charge, which is some or all of the company’s assets, to secure the debt owed to him. This could be, for example, a mortgage, where the property represents the security. An unsecured creditor does not have a charge over the company’s assets.

Debentures ______________ forfeited for non-payment of call moneys.

commercial studies sources of business finance - 2 debentures / bonds debentures non-institutional sources - long-term

  1. Can be

  2. Cannot be

  3. Both (A) & (B)

  4. None of above

Show answer
Correct Option: B
Explanation:
Generally total face value of debenture is demanded by company in installments I.e. Debenture application, Debenture allotment and Debentures calls accounts. It is usual that some of the debenture-holders fail to pay the amount of different installments when these are demanded by company. Such unpaid calls (installments) are called ‘Calls in arrears’. Under the provisions of Companies Act, 1956 debentures cannot be forfeited by company.

Because under section 122 of the Companies Act 1956 a contract with a company to take up and pay for any debenture may be enforced by a decree for specific performance. For the realisation of calls in arrears on debentures the company can only file a suit in the court. Company can charge interest on calls-in-arrears as provided in prospectus.

Sometimes, certain debenture-holders pay money against those calls also which have not yet en demanded by company. In such cases the amount received is credited to calls in advance account. If provided in prospectus, the company pays interest on this amount to debenture-holders at a specified rate. Interest is always calculated for the period, the advance has been received.

The balance of the Debentures Sinking Fund after redemption of debentures is transferred to____________.

commercial studies sources of business finance - 2 debentures / bonds debentures non-institutional sources - long-term

  1. Profit and loss A/c

  2. General reserve A/c

  3. Debenture A/c

  4. Cash A/c

Show answer
Correct Option: B
Explanation:

The balance of the Debentures Sinking Fund after redemption of debentures is transferred to General Reserve account. It is the amount which is kept separately out of redeemed amount from debentures, that is why it is transferred to general reserve account.

Debentures redeemable after 10 years of issue are shown as___________.

commercial studies sources of business finance - 2 debentures / bonds debentures non-institutional sources - long-term

  1. Long-term borrowings

  2. Other long-term liabilities

  3. Short-term borrowings

  4. Other short-term liabilities

Show answer
Correct Option: A
Explanation:

Debentures redeemable after 10 years of issue are shown as long-term borrowings since debenture holders invest for a long period of time. Debentures refer to the liabilities of the company that will not become due within one year.

Fast growth plus relatively low market share means that there is still enormous opportunity for new players to outpace traditional industry leaders.

commercial studies structure of business e-advertising, e-marketing and e-security introduction to internet and e-commerce emerging modes of services e-tailing e-commerce and mobile commerce

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

True. 

IF the market is growing fast and the sellers have very low market share then it indicates that there are enormous opportunities for all the new players to compete with the traditional industry leaders and outpace them. 

What are the disadvantages of e-commerce?

commercial studies structure of business e-advertising, e-marketing and e-security introduction to internet and e-commerce emerging modes of services e-tailing e-commerce and mobile commerce

  1. Lack of warmth of interpersonal interactions between the seller and the buyer.

  2. Not suitable where the customer requires personalized service.

  3. Security continues to be a problem for online business.

  4. All of the above

Show answer
Correct Option: D
Explanation:

The disadvantages of e-commerce business includes the lack of interpersonal relations between customers and business enterprise as they don't know about the physical existence of each other and it is not suitable where customer requires personalized services. Security is a main concern in pursuing e-commerce activities.

Benefit(s) of e-commerce is/are ___________.

commercial studies structure of business e-advertising, e-marketing and e-security introduction to internet and e-commerce emerging modes of services e-tailing e-commerce and mobile commerce

  1. customers can shop from home or office.

  2. it allows quick response to the queries of customers and other business houses through the internet.

  3. it is easier to launch a new product through the internet

  4. all of above

Show answer
Correct Option: D
Explanation:

E commerce activities helps in reducing the costs of business transactions as physical stores are not required by an enterprise to function, provides economies of scale that leads to reduction in the price of products and increases the customer satisfaction and maintaining the goodwill of business enterprise.

Benefit(s) of e-commerce is/are __________.

commercial studies structure of business e-advertising, e-marketing and e-security introduction to internet and e-commerce emerging modes of services e-tailing e-commerce and mobile commerce

  1. it saves a lot of time, money and energy in receiving orders and executing the same under the traditional mode of commerce

  2. the business firm can get quick supplies from the vendors

  3. for the consumers, the whole world becomes a shop

  4. all of above

Show answer
Correct Option: D
Explanation:

Buying and selling through internet i.e E commerce activities helps in reducing the costs of business transactions as physical stores are not required by an enterprise to function, provides economies of scale that leads to reduction in the price of products and increases the customer satisfaction and maintaining the goodwill of business enterprise.

Disadvantages of E-commerce in India are:
(i) Internet access is not universally available;
(ii) Credit card payment security is not yet guaranteed;
(iii) Trancstions are de-personalized and human contact is missing;
(iv) Cyber laws are not in place
Select the correct answer from the options given below.

commercial studies structure of business e-advertising, e-marketing and e-security introduction to internet and e-commerce emerging modes of services e-tailing e-commerce and mobile commerce

  1. (i) and (ii)

  2. (ii) and (iii)

  3. (i), (ii), (iii)

  4. (i), (ii), (iii), (iv)

Show answer
Correct Option: C
Explanation:

The drawbacks of e commerce business includes the lack of interpersonal relations between customers and business enterprise as they don't know about the physical existence of each other, internet is not available universally and it is not suitable where customer requires personalized services. Security is a main concern in pursuing e commerce activities.

E - business is____________________________________.

commercial studies structure of business e-advertising, e-marketing and e-security introduction to internet and e-commerce emerging modes of services e-tailing e-commerce and mobile commerce

  1. the use of electronic communications for all business processes

  2. an organization using electronic media to purchase from its suppliers

  3. an organization using electronic media to sell direct to its customers

  4. any electronically mediated communication between an organization and its stakeholders

Show answer
Correct Option: D
Explanation:

E- business is a form of conducting business in which transactions are carried out with the electronically mediated communication like internet, intranet etc. between an organisation and its stakeholders.