Deck 3: Financing and Industrial Unit Sickness

Question 1

Cash Flow Statement does not fully reveal the soundness or otherwise of the financial position of the business.

Answer 1

True

Question 2

When liability increases, it is _________________

A)Source of Funds
B)Application of Funds
C)Decrease in Investments
D)None of above

Answer 2

Source of Funds

Question 3

Which of the below is NOT an application of funds?

A)Operating Profit
B)Purchase of Fixed Assets
C)Repayment of Loans or Debentures
D)Operating Losses

Answer 3

Operating Profit

Question 4

Which of the below financial statements is static and shows the state of Assets and Liabilities on a particular date?

A)Cash Flow Statement
B)Funds Flow Statement
C)Profit and Loss Statement
D)None of the Above

Question 5

Which statement is prepared in the process of Funds Flow Analysis?

A)Schedule of Changes in Working Capital
B)Ratio Analysis
C)Both a and b
D)None of the Above

Question 6

Funds Flow Statements are prepared so as to

A)Identify the changes in Working Capital
B)Identify reasons behind change in Working Capital
C)Know the item-wise inflow and outflow of funds during given period
D)All of the above

Question 7

Bond, Debentures and Term Loans fall under

A)Current Assets
B)Non-current Assets
C)Non-current Liabilities
D)None of the Above

Question 8

Which of the following is NOT a Preoperative Expense?

A)Establishment Expense
B)Travelling Expense
C)Insurance Charges
D)Raw Material Expenses

Question 9

Which of the following is NOT a mean / source of Project Finance?

A)Term Loan
B)Debentures
C)Overdraft
D)Share Capital

Question 10

Which of the following is an example of owned capital?

A)Equity Shares
B)Preference Shares
C)Debentures
D)a and b

Question 11

Major components of cost of production are:

A)Material Cost
B)Utilities and Labour Cost
C)Factory overhead Cost
D)All of the Above

Question 12

Which one of the following is a Working Capital Advance?

A)Cash Credits
B)Letter of Credit
C)Purchase / discount bills
D)All of the Above

Question 13

Higher Debt Service Coverage Ratio denotes

A)Higher Chances of getting a Loan
B)Lower Chances of getting a Loan
C)No Requirement of a Loan at all
D)None of the Above

Question 14

Term Loan is ______________ borrowing.

A)Unsecured
B)Secured
C)Clean
D)None of the Above

Question 15

If Project is accepted for Term Loan, Bankers issue a ___________

A)Letter of Credit
B)Letter of Advance
C)Letter of Sanction
D)Letter of Acceptance

Question 16

Once the loan is disbursed the bank monitors the project by

A)Regular Reports furnished by the borrower
B)Periodic site visit
C)Discussion with Promoters, Suppliers, Creditors etc.
D)All of the above

Question 17

Which are the warning signals of industrial unit sickness?

A)Continuous irregularity in Cash Credit Account
B)Low Capacity Utilization
C)Failure to pay statutory liabilities
D)All of the Above

Question 18

Which of the following has no role in a remedy to Industrial Unit Sickness?

A)Government
B)Financial Institution
C)Industry Association
D)Customers

Question 19

Which is an external cause of Industrial Unit Sickness?

A)Non availability of skilled personnel
B)Lack of Finance
C)Bad Production Policies
D)Wrong Marketing Policies

Question 20

Which is an internal cause of Industrial Unit Sickness?

A)Ineffective Corporate Management
B)Inappropriate Personnel Management
C)Lack of Promoter's Experience
D)All of the Above

Question 21

Revival package of a sick unit includes

A)Provision of Additional Financial Assistance
B)Settlement with Creditors
C)Both a and b
D)None of the Above

Question 22

BIFR stands for

A)Bureau of Industrial and Financial Resources
B)Board of Industrial and Financial Reconstruction
C)Board of Investment and Financial Reconstruction
D)Bureau of Investment and Financial Resources

Question 23

Sick Industrial Companies Act was passed in which year?

A)1983
B)1984
C)1985
D)1986