C. B. Gupta solutions for कॉमर्स वॉल्यूम २ [अंग्रेजी] कक्षा १२ आईएससी chapter 3 - Sources of Financial for a Join stock Company [Latest edition]

What are preference shares?

Give two privileges enjoyed by preference shareholders.

What are the two merits of issuing equity shares?

What are retained earnings?

Give the main forms in which financial assistance from a bank may be available.

Identify two sources of short-term funds.

Enumerate two factors which bring out the importance of debentures.

Answer the following question in one sentence.

What are ‘convertible debentures’?

Discuss the advantages of retained profits as a source of finance.

Give two sources of long-term funds.

Discuss the importance of preference shares as sources of long-term finance.

What are inter-corporate deposits (ICDs)?

What is meant by trade credit?

What is meant by factoring?

What is an overdraft?

What is Cash Credit?

What is bills discounting?

Explain the term ICICI.

Explain the term IDBI.

Explain any two advantages of Public deposits.

Describe the disadvantages of public deposits.

What are retained earnings?

Give two characteristics of a debenture.

What is instalment credit?

What are Right Shares?

What are retained earnings?

Explain Debentures.

What is the advantage of participating preference shares over other preference shares?

Explain any two advantages of Public deposits.

Describe the disadvantages of public deposits.

Answer the following question in one sentence.

What are ‘convertible debentures’?

What is meant by participating preference shares?

Why are preference shares so called?

Explain any two advantages of Public deposits.

What are the two advantages of ‘ploughing back’ of profits?

Explain the following term/concept:

Bonus shares

Distinguish between Bearer Debentures and Registered Debentures.

Write any two differences between Shares and Debentures.

From the view point of the company mention two disadvantages of raising money by the issue of shares.

Mention two drawbacks of ploughing back of profits, from the shareholder’s viewpoint.

Mention two specific advantages to a company from the issue of debentures.

State any four short-term sources of finance for a joint stock company. 

What is meant by trade credit?

Mention any four sources of finance for proprietary form of business organisation.

Mention any two drawbacks of public deposits as a source of finance.

Explain any two advantages of Public deposits.

Answer in one sentence.

What are cumulative preference shares?

Give the main forms in which financial assistance from a bank may be available.

What is meant by factoring?

In the context of right shares, bring out the meaning of pre-emptive right.

What is meant by participating preference shares?

Give two merits of Inter Corporate Deposits.

What are the different types of short-term finances given by commercial banks?

What are preference shares?

Discuss the importance of preference shares as sources of long-term finance.

What are the advantages of preference shares from the point of the investors?

Write any two differences between Shares and Debentures.

Discuss five main advantages of obtaining funds from specialised financial institutions.

Distinguish between equity shares and preference shares.

State any three advantages of debenture issue as a source of finance.

Write any two differences between Shares and Debentures.

Discuss five main advantages of obtaining funds from specialised financial institutions.

Explain various types of preference shares.

Explain the advantages of equity shares, as a source of finance.

Write any two differences between Shares and Debentures.

Write a short note on underwriting of shares.

What are retained earnings?

What are retained earnings?

Write any two differences between Shares and Debentures.

Distinguish between equity shares and preference shares.

Distinguish between redeemable debentures and irredeemable debentures.

Distinguish between cumulative and non-cumulative preference shares.

Discuss the objectives of institutional finance.

Explain the advantages of equity shares as a source of long-term finance.

Give two main features of participating preference shares.

What are preference shares?

Discuss the importance of preference shares as sources of long-term finance.

What are the various kinds of Debentures?

What are public deposits?

Explain any two advantages of Public deposits.

Describe the disadvantages of public deposits.

What is debenture?

State any three advantages of debenture issue as a source of finance.

What are the two advantages of ‘ploughing back’ of profits?

Why are participating preference shares so called?

Explain the advantages of equity shares as a source of long-term finance.

Explain the disadvantages of equity shares as a source of long-term finance.

Write any two differences between Shares and Debentures.

What are the two advantages of ‘ploughing back’ of profits?

Identify two sources of working capital or short-term capital.

Distinguish between the following:

Rights Shares and Bonus Shares

Define debenture.

Describe the various types of debentures.

Explain any four merits of borrowing funds from financial institutions.

What is meant by Equity Shares?

Explain the advantages of equity shares as a source of long-term finance.

Explain the following term/concept.

Sweat Equity shares

Explain Debentures.

State any four disadvantages of debentures. 

Write short note on Bank overdraft.

Explain the three disadvantages of preference shares from the investors’ point of view. 

Explain four advantages of raising funds from commercial banks.

Explain any three disadvantages of borrowing funds from specialized financial institutions.

Write a short note on the following:

E.S.O.P.

What is meant by Equity Shares?

Write a short note on the following:

E.S.O.P.

Answer this question in about fifteen words:

What is Right Issue?

Explain the following term/concept.

Sweat Equity shares

What are preference shares?

Discuss the importance of preference shares as sources of long-term finance.

What is the advantage of participating preference shares over other preference shares?

Why are preference shares so called?

What is meant by participating preference shares?

What is a “Hybrid Security”?

What are preference shares?

Discuss the importance of preference shares as sources of long-term finance.

What are the advantages of preference shares from the point of the investors?

Distinguish between cumulative and non-cumulative preference shares.

What are the two merits of issuing equity shares?

Write a short note on underwriting of shares.

Distinguish between equity shares and preference shares.

Distinguish between equity shares and preference shares.

Explain the following term/concept:

Bonus shares

Name the securities which a company may issue to raise loans from the general public.

Explain Debentures.

Give two characteristics of a debenture.

Answer the following question in one sentence.

What are ‘convertible debentures’?

Answer the following question in one sentence.

What are ‘convertible debentures’?

Write any two differences between Shares and Debentures.

Write any two differences between Shares and Debentures.

State any three advantages of debenture issue as a source of finance.

Distinguish between redeemable debentures and irredeemable debentures.

What are retained earnings?

What are retained earnings?

What are retained earnings?

What are retained earnings?

What are the two advantages of ‘ploughing back’ of profits?

What are the two advantages of ‘ploughing back’ of profits?

Give the main forms in which financial assistance from a bank may be available.

What is an overdraft?

Explain any two advantages of Public deposits.

Describe the disadvantages of public deposits.

Explain the following term/concept.

Trade credit

Describe customer advances.

What is instalment credit?

What is meant by factoring?

Explain any two advantages of Public deposits.

What is collateral security for a bank loan?

Explain leasing as a source of short-term finance.

Distinguish between the following:

Loan and overdraft

What is Cash Credit?

What are inter-corporate deposits (ICDs)?

A business can generate funds internally by ______.

Non-payment of debt on time results in ______.

Equity share capital represents ______.

Unsecured debentures:

Which source of finance is preferred by investors who want fixed income at lesser risk. 

Preference shareholders are called ______.

Which of the following is not the feature of preference shares:

‘Retained Earnings’ are also known as ______.

Trade credit is granted to those customers who have reasonable amount of ______.

Under the factoring arrangement, the factor ______.

Investors who want steady income may not prefer ______.

What do you mean by business finance:

______ not required to be refunded during the lifetime of the business.

1. Preference shares
2. Debentures
3. Equity shares
4. Retained earnings

______ holders do not receive a fixed amount of dividend, whereas ______ holders receive a fixed amount dividend.

ABC ltd wants to issue huge amount of shares to raise its capital but the directors decided not to dilute the control to more people, which shares should they issue:

A public limited company proposes to increase its subscribed capital by offering new shares to existing shareholders. Such an issue is termed as ______.

A public limited company proposes to increase its subscribed capital by offering new shares to employees at below market price. Such an issue is termed as ______.

A public limited company proposes to increase its subscribed capital by offering new shares to its existing shareholders free of charge by capitalising its accumulated profits. Such an issue is termed as ______.

Debentures which are transferable by mere delivery are ______.

Preference shares which are entitled to surplus profits of the company in addition to their share of fixed dividend are called as ______.

Read the given passage and answer the following questions:

“The finance manager of the company approached one of its suppliers to grant two months credit on purchase of raw cotton. This would enable the company to get cotton supplies without making immediate payments.”

Which source of finance is highlighted in the given lines?

Read the given passage and answer the following question.

Which of the following is NOT a merit of equity shares?

On the basis of below given case study, answer the question.

As a finance manager of the Shalini Ltd., out of the following advise the directors the various sources open to the company to raise necessary finance for this purpose:

On the basis of below given case study, answer the question.

Among the various heads which are reflected in the Balance Sheet of Shalini Ltd., which funds out of following put a lot of burden on the business as payment of interest is to be made, even when the earnings are low or when loss is incurred?

On the basis of below given case study, answer the question. 

How much is total finance reflected in the Balance Sheet of Shalini Ltd, as at 31st March 2020?

Assertion (A): Financing through debentures is less costly.

Reason (R): Debentures do not carry voting rights. Therefore, financing through debentures does not dilute control of equity shareholders on management.

Assertion (A): Tax benefits are available on dividend paid on preference shares.

Reason (R): Dividend paid on preference shares is an appropriation of profits.

Assertion (A): The control of the company is not diluted when they go for public deposits.

Reason (R): The depositors are given minor voting rights to keep their preference in consideration.

1. ‘Mr. Anoop has been running a restaurant for last two years with his own savings’. With reference to the given text, identify the source of fund employed by Mr. Anoop. Also, state its any two disadvantages. (2)
2. Out of the sources of funds suggested by Swapnil, what may be the possible reasons for not raising funds through issue of debentures?  (3)
3. Identify which type of source of funds were suggested by Mr. Anoop’s friend on the basis of duration? (1)
4. Explain the advantages of raising capital through equity shares. (2)

In context of the above case:

1. ‘Till now she has been managing all the financial requirements of her business through the profits made in business.’ Name the source of the funds being mentioned in the statement and state it's any two merits. (3)
2. Suggest any two long-term sources of funds from external sources that Anupama can use to finance her expansion plans. (1)
3. Suggest any two sources through which Anupama can raise funds to meet the increased working capital requirements of her business. (2)
4. Give any two merits for each of the suggested source of funds. (2)

Long-term funds are required to purchase ______ assets.

The capital of a company is divided into a number of equal parts known as ______.

Preference shares are a hybrid security comprising features of both ______ and ______.

Rights shares bring ______ to the company’s coffers.

______ are an important source of raising long-term finance.

TRUE OR FALSE:

Issue of debentures is the most important method of raising long-term funds.

TRUE OR FALSE:

Equity shares are issued prior to preference shares and debentures.

TRUE OR FALSE:

When the entire share capital is raised through equity shares, the benefit of trading on equity is available.

TRUE OR FALSE:

Preference shares are popular due to low rate of return.

TRUE OR FALSE:

Public deposits refer to the deposits of money made by the public with non-banking companies.