Secretarial Practice Unit Test Overview

Unit Test Overview

• Subject: Secretarial Practice
• Date: 30th July 2024
• Marks: 25
• Duration: 1 hour

Fill in the Blanks

• A share is a small part of capital.
• The benefit of a deposit receipt lies in its ability to raise capital in the market, often on a local or international scale.
• Equity shareholders are claimants of the remaining portion of a company’s assets after all obligations are fulfilled.
• Equity shareholders participate in the management of the company, unlike preference shareholders or deposit holders.
• Bonus shares are given to equity shareholders as a bonus.

Matching Questions

Group A to Group B

• Capital offered for sale corresponds to Shares available for sale to the public.
• FPO matches with IPO after listing.
• Bonus Share aligns with Giving free shares to existing equity shareholders.
• Share distribution after two months relates to Share Allotment Letter.
• Seizure of shares matches Action as per the provisions of the law, due to reasons like non-payment of share installment.

Explanation of Terms

• Financial decision: Involves determining how a company allocates its financial resources to maximize value. It encompasses investments, funding, and operations.
• Financial investment decision: Refers to the process of deciding where to invest funds to achieve the best return, considering factors like risk and market conditions.

Differentiation

• Fixed Capital vs Working Capital:

  • Fixed Capital: Long-term investment in tangible assets such as property or machinery.
  • Working Capital: Short-term assets needed to manage daily operations, calculated as current assets minus current liabilities.

• Shares vs Loan Accounts:

  • Shares represent ownership in a company and provide rights such as dividends and voting.
  • Loan Accounts are liabilities where a company borrows funds and is obligated to repay with interest, lacking ownership rights.

Short Answers

• Deposits: Funds placed in a financial institution for safekeeping, which can accrue interest.
• Global Deposit Receipts (GDRs): Financial instruments representing shares in foreign companies, allowing them to raise capital internationally.
• Book Building Method: A process used during an IPO to gauge demand for shares by allowing investors to submit bids, helping to establish a price range.
• Capital Structure: The mix of debt and equity financing used by a company, including components like equity shares, loans, and retained earnings.

Test your knowledge on the fundamental concepts of Secretarial Practice with this unit test. The quiz includes fill-in-the-blanks and matching questions related to shares, capital, and stakeholders. Prepare to demonstrate your understanding of the subject matter effectively.