Finance Questions

Q:

Someone who loans money is called

A) Lender B) Borrower
C) Investee D) Investor
 
Answer & Explanation Answer: A) Lender

Explanation:

Someone who receives money in exchange for a promise to pay it back later is called a borrower1, and the person making the loan is the lender.

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Q:

Explain the difference between fixed and flexible budgets ?

Answer

1. A fixed budget is established for a specific level of activity whereas flexible budget is prepared for various levels of activity.


2. Fixed budget cannot be changed after the period commences, whereas a flexible budget can be changed after the period commence.


3. Fixed budget is more suitable for fixed expenses whereas flexible budget takes both fixed as well as variable expenses in account.


4. Fixed budget includes only fixed costs, whereas a flexible budget includes fixed costs, variable costs and semi variable costs.


5. Fixed budget is mainly used in planning stage whereas flexible budget is used in controlling stage.

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Subject: Finance Exam Prep: Bank Exams , CAT
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1 1777
Q:

Comprehensive income includes all of the following except

A) expenses B) contributions by owners
C) extraordinary items D) losses
 
Answer & Explanation Answer: B) contributions by owners

Explanation:

Comprehensive income is the sum of net income and other items that must bypass the income statement because they have not been realized, including items like an unrealized holding gain or loss from available for sale securities and foreign currency translation gains or losses.

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Q:

What is the primary reason to issue stock?

Answer

 The primary reason to issue stock is to raise money to start and maintain an ongoing business.


Other Reasons::


The reasons that a company might want to raise money by issuing stock are:


 



  • To develop new products


 



  • To buy more advanced equipment


 



  • To pay for new buildings and inventories


 



  • To hire more employees


 



  • To provide for a merger or acquisition


 



  • To decrease debt


 



  • To give company owners greater flexibility


 



  • To place a value on the company.

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0 1531
Q:

Insurance can help you to protect against

A) unexpected accidents B) illegal consent
C) Both A & B D) None of the above
 
Answer & Explanation Answer: A) unexpected accidents

Explanation:

Insurance can help you to protect your properties and assets like home, car, stocks,... against unexpected accidents.

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0 1339
Q:

Cheque deposited but not cleared means

Answer

A Bank Reconciliation Statement is a statement prepared periodically by a customer to explain the divergence (difference) between the bank balance as per cash book and the bank balance as per Pass Book. It clearly shows the two differing balances and the outstanding items which causes the balances to disagree.


The objective of preparing such a statement is to know the causes of differences between the two balances and pass necessary correcting or adjusting entries in the books of the firm. But it is to be noted that some differences are automatically adjusted. For example - A cheque that has been sent for collection, but not yet collected, causes a difference between the balance as shown by the pass book and the balance as shown by the cash book, but no adjusting entry is required in the cash book for such a difference because, the bank will credit the firm’s account as soon as the cheque is collected.

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0 1336
Q:

Demand is said to be inelastic when

A) Percentage change in demand is less than the percentage change in price of the good B) Percentage change in demand is greater than the percentage change in price of the good
C) Percentage change in demand is equal to the percentage change in price of the good D) None of the above
 
Answer & Explanation Answer: A) Percentage change in demand is less than the percentage change in price of the good

Explanation:

Demand is said to be inelastic, when the demand for the good doesn't change much or it is negotiable when the price of the good changed.

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1 1308
Q:

RBI issued currency notes under which system

A) Maximum Fiduciary System B) Proportional Reserve System
C) Fixed Fiduciary System D) Fixed Minimum Reserve System
 
Answer & Explanation Answer: D) Fixed Minimum Reserve System

Explanation:

RBI issued currency notes under Fixed Minimum Reserve System.

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