Company Regulations Quiz

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Questions and Answers

What type of notice must be given by the company to the transferee in the case of transfer of partly-paid shares?

  • Notice mentioning that the shares are fully paid up
  • Notice mentioning that the shares are partly paid up (correct)
  • Notice mentioning the dividend history of the shares
  • Notice mentioning the market value of the shares

Why must a company issuing deposits open a Deposit Repayment Reserve Account?

  • To use the funds for any company expenses
  • To repay depositors when needed (correct)
  • To invest the funds in the stock market
  • To pay dividends to shareholders

When does a company accepting deposits have to deposit an amount in the Deposit Repayment Reserve Account?

  • Anytime during the year
  • At the end of the financial year
  • Every 6 months
  • On or before 30th April every year (correct)

What types of financial instruments are used in the capital market?

<p>Equity shares, preference shares, debentures, bonds, government securities, public deposits, etc. (A)</p> Signup and view all the answers

How do corporates use financial instruments in the capital market?

<p>To solve problems of finance (C)</p> Signup and view all the answers

What type of funds are borrowed and lent in the Capital Market?

<p>Both short-term and long-term funds (D)</p> Signup and view all the answers

What is the main difference between cash credit and cash loan?

<p>Cash loan is for a fixed period, while cash credit has no fixed period. (A)</p> Signup and view all the answers

What is the key feature of discounting a bill of exchange with a bank?

<p>Discounting a bill involves selling it to the bank for slightly less than its face value. (A)</p> Signup and view all the answers

Which type of financing allows the borrower to withdraw an amount up to a sanctioned limit?

<p>Overdraft (A)</p> Signup and view all the answers

What determines the limit of cash credit that a borrower can withdraw?

<p>The value of goods pledged or hypothecated (D)</p> Signup and view all the answers

Which type of financing charges interest on the actual balance outstanding?

<p>Cash loan (B)</p> Signup and view all the answers

In what scenario would a drawer choose to discount a bill of exchange with a bank?

<p>To receive immediate funds before the due date of the bill (B)</p> Signup and view all the answers

What is the practice of retaining a part of the profit during periods of high profit to be used in the future for meeting financial needs called?

<p>Ploughing Back of Profit (C)</p> Signup and view all the answers

What is another term for 'retained profits' or 'retained earnings'?

<p>Ploughing Back of Profit (C)</p> Signup and view all the answers

What is the primary purpose of 'ploughing back of profits' in a company?

<p>To retain profits for future use (C)</p> Signup and view all the answers

Which of the following best describes the concept of 'self-financing' mentioned in the text?

<p>'Ploughing Back of Profit' from retained earnings (D)</p> Signup and view all the answers

What rules govern the use of retained profits by a company?

<p>Rules subject to certain conditions (B)</p> Signup and view all the answers

'Ploughing Back of Profit' can be described as:

<p>'Self-financing' using retained earnings (B)</p> Signup and view all the answers

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