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Business Studies

Trade Credit

Which one of ...

Question

Which one of the following is a convenient and continuous source of finance?

A

Preference shares

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B

Debentures

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C

Equity Shares

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D

Trade Credit

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Solution

The correct option is D
Trade Credit

Trade Credit is a convenient and continuous source of fund. The volume and period of credit depend on the reputation of the purchasing firm, the position of the seller, the volume of purchase and so on.

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Q. Trade credit is a convenient and continuous source of funds, which is one of the __________ of trade credit.

Q. "Equity shares and debentures play a very important role in long term credit." What are they? How do they help?

Q. The debentures which cannot be converted into equity shares are called ___________ debentures.

Q. Debt to Equity Ratio of a company is 0.5:1. Which of the following suggestions would increase, decrease or not change it:

(i) Issue of Equity Shares:	(ii) Cash received from debtors:
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Q. Which of the following securities can be forfeited for non-payment of allotment or call money?
(I) Equity Shares
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(IV) Debentures
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