Important Questions and Answers: Demand and Schedule

DEMAND AND SCHEDULE

1. What are the elements of financial management?

a )Fixed and working capital management.

b) Determining sources of funds

c)  Financial analysis

d) Capital budgeting

2. Explain working capital

Working capital is that part of the capital which is required for the financing of working or current needs of the firm.

3. What is meant by fixed capital?

Fixed capital is associated with the amount of capital acquired by an enterprise for acquiring fixed assets such as land, building, plant, machinery and equipment, which are intended for long term continued use in business.

4. Classify working capital

a)Permanent working capital

b) Variable working capital

5. List the internal sources of finance.

a) Retained profit

b) Depreciation provisions

c) Deferred taxation

d) Personal funds

6. List the external sources of finance. a) Venture capital funds

b) Loans from financial institutions

c) Loans from banks

d) Trade credit

7. What are the responsibilities of good financial management? a)Profit planning

b) Worth maximization c)

Procurement of finance

d) Capital financing

8. Enumerate executive function of financial management.

a) Assessment of financial needs in terms of fixed and working capital

b) Choosing the sources of funds

9. What is the role of financial manager in an organization?

The specific role of a financial manager includes anticipation of financial needs, acquiring financial resources and allocating funds in business.

10. What is debenture?

A debenture is an instrument issued by a company which denotes an obligation resulting from the borrowing of money through the instrument.

11.     Name the state level financing institution for advancing loans to industries. Tamilnadu industrial development corporation

12.What are retained earnings?

Retained earnings are profits not distributed by way of divided payments but retained within the organization as revenue reserves. These retained earnings are utilized by the company to finance its expansion plans or meet its requirements of working capital.

13. Explain what is meant by obsolescence of machine.

Obsolescence is the loss in value of an asset due to new inventions, modifications, and change in legislation, styles, technology or other causes. It is different from wear & tear due to normal usage.

14. What is investment?

The purchase of capital goods, such as plant and machinery in a factory in order produce goods for future consumption.

15. Define cost of capital.

Cost of capital is concerned with the amount that should be expended in order to acquire capital for investment project.

16. What is financial accounting?

The art of recording, classifying and summarizing in a significant manner and in terms of money transactions and events which are impart at least of a financial character and interpreting the resulting thereof.

17. State the nature of financial accounting.

a) The transaction is mostly financial in nature

b) It deals with the overall performance of the business.

c)  It is more rigid in its approach

18.                 Write the types of business accounts. a) Personal account b) Real account c) Nominal account

19.                 What are the systems of book keeping? a)Double entry system b) Single entry system

20.                 What are the functions of financial management? a)determining financial needs b) Determining sources of funds c) Financial analysis

d) Profit planning and control