Karnataka State Board Social Science Business Studies Class 9 Chapter 2 Financial Management Exercise Question and Answer.
FILL IN THE BLANKS
1) Business enterprise require two types of finance, they are long term and short term
2.) The suppliers of goods raise credit to carry from the buyers is called trade
3.) The business concern raise credit to carry day to day affairs and is called loan
4.) For immediate need the business institutions get credit from financial institutions
5.) The capital of joint stock companies is dived into small units are called shares
6.) The bank that suppliers credit to import trade is called export import bank.
7.) The first share market of India Bombay stock exchange.
ANSWER IN TWO OR THREE SENTENCE
QI What is financial management ?
Ans By the term financial management means planning, raising , controlling, and administering of the fund used in business.
Q2.which are the two types of finance required by the business cncern
Ans The two types of finance required by the business concern are
Short term finance
Long term finance
Q3. Mention any four sources of short term credit required by business concern
Ans the four sources are
1.) trade credit
2.) Advance from customer
3.) Bank loan
4.) Instalment credit
Q4. Why business concern require short term credit
Ans The business concern require short term credit to purchase material, to give wages and to meet marketing and administrative expenses.
Q5. What do you mean by long term finance
Ans The term long term finance means the finance required for the development programmes.
Q6. Give the names of any three organizations in the field of mutual fund
Ans UTI market fund, LIC growth fund, UTI market plan etc.
III. ANSWER THE FOLLOWING QUESTIONS
Q1. What is the role and importance of finance to business concern
Ans The role and importance of finance are
- No business activity is possible without Finance.
- Finance help to procure resources needed in production and marketing good and services
- Finance guides and regulates the investment expenditure and decisions
- Finance also helps in modernization, diversification, development , expansion of an enterprise
- Finance is required research, market survey and advertisement of products
- It helps in development of industries in backward areas
- Financial stability also helps business to grow
Q2. Explain briefly the purposes for which long term finance required for business concern
Ans long term finance is required for expansion for the level of production, new methods of production, to procure fixed assets and establishing new markertings, in order to issue shares long tern finance is required as well as the joint stock companies are used to borrow money to meet long term financial requirement through the issue of debentures.
Q3.Issue of share and debentures play an important role in long term credit. What are they? how do they help.
Ans. Issue of shares helps to start joint stock company that issues shares and when company require long term finance they issue shares to the public.
Debentures are the debt borrowed by the companies. A company under its common seal acknowledgement a debt to some persons and also to repay the debt after specific time period.
Q4. What is the part played by the IFC & SFS in business?
Ans Industrial Finance Corporation Of India : IFC provide long tem financial assistance to industry and it grants loan to public limited companies, co operative sectors as well as statev owned companies
State Finance Co operation This act passed in 1951 by the parliament to enable to enable state government to establish SFS. Its main aim is to provide long term finance to medium and small scale industries. It is mostly applied in Jammu and Kashmir.
Q5. What are the long term public deposits and what are the advantages of it to public?
Ans long term public deposit needs for the long term financial needs and it is easy to get deposits without any formalities. A company accept this not more than 5 years. The deposits are unsecured and provide 8% to 10% interest.
It helps public in different ways by to finance new projects involving new technologies on production which has high risk but had potential of high return.
Secondly, mutural fund is a fund sponsored by an institution to mobilize the savings of the community at large and invest them in diversified portfolio of securities.
Q6. What do you mean by money market and different from capital market
Ans Money market Is used to deal with with short term fund. It arranges fund for working capital and rate of interest is high. Commercial and indigeneous bankers plays important role in money market.
Where as capital market it facilities not only short term Fund but also long term fund .The rate of interest is low compared to money market. The financial co operation and institutions , mutual fund are leading financial institutions.