KSEEB Solutions for Class 9 Business Studies Chapter 2 Financial Management

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Students can Download Business Studies Chapter 2 Financial Management Questions and Answers, Notes Pdf, KSEEB Solutions for Class 9 Social Science helps you to revise the complete Karnataka State Board Syllabus and to clear all their doubts, score well in final exams.

Karnataka State Syllabus Class 9 Social Science Business Studies Chapter 2 Financial Management

Class 9 Social Science Financial Management Textbook Questions and Answers

I. Fill in the blanks with appropriate words in the following statements.

1. Business Enterprises require two types of finance they are ………………………. and ……………………….
2. ‘The supplies of goods raise credit from the buyers’ is called ……………………….
3. The business concerns raise credit to carry out day to day affairs is called ……………………….
4. For immediate needs, the business institutions get credit from ………………………..
5. The capital of joint-stock companies is divided into small units. They are called ……………………….
6. The bank that supplies credit to import or export goods is called ……………………….
7. The IFCI was started in the year ……………………….
8. The first share market of India was started at ……………………….
Answer :
1. short term and long term finance,
2. Trade credit
3. Installment credit,
4. Indigenous bankers,
5. Shares
6. Exim bank,
7. 1948, 8. Mumbai.

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II. Answer the following questions in two to three sentences each.

Question 1.
What is the meaning of financial management?
Answer :
It is the activity concerned with planning, raising, controlling, and administering the funds used in business.

Question 2.
Which are the two types of finance required by the business concerns? Give examples.
Answer :

  1. Short term finance
    eg: Issue of shares
  2. Long term finance
    eg: Bank Loan

Question 3.
Mention any four sources of short term credit required by business concerns?
Answer :
Trade credit, Bank credit, advance from customers, installment credit, and indigenous bankers.

Question 4.
Why business concerns required short term finance?
Answer :
It is required to meet the working capital! needs, to purchase raw materials, to pay wages to meet the marketing and administrative expenses.

Question 5.
What do you mean by long term finance?
Answer :
Long term finance refers to finance required for development programmes such as the expansion of the level of production, modernization of production methods, etc.

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Question 6.
Give the names of any three organizations in the field of ‘Mutual funds’.
Answer :
UTI, SBI, LIC, ICICI, HDFC.

III. Answer the following questions :

Question 1.
What is the role and importance of finance to business concerns?
Answer :

  1. Without finance no business activity is possible.
  2. It helps to obtain resources for the production and marketing of goods and services.
  3. It helps in the smooth running of the business.
  4. It guides and regulates the decisions.
  5. It helps for the modernization and development of an enterprise.
  6. It is required to develop industries in backward areas.

Question 2.
Explain briefly the purposes for which long term finance is required by business concerns?
Answer :
Long Term finance is required for the ‘ development programs such as an expansion of the level of production, modernization of production methods, etc.

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Question 3.
“Issue of shares and debentures play a very important role in long term credit” what are they? How do they help?
Answer :
The capital of a joint-stock company is divided into small units called Shares. To start a joint-stock company, the promoters issue shares. Whenever they need additional capital for long term purposes, the companies raise the funds through the issue of shares to the public.

Debentures are the debts or loans borrowed by the companies. A company under its common seal acknowledges a debt to some persons containing an undertaking to repay the debt after a specified period. They help the companies to meet their long term financial requirements.

Question 4.
What is the part played by Industrial Finance Corporation (IFC) and State Finance Corporations (SFC) in financing the business?
Answer :
IFC grants loans to public limited companies and to co-operative societies. State-owned public limited companies can also borrow funds from the corporation. It provides long term financial assistance to companies. The main objective of SFC is to provide long term finance to small and medium scale industries in their respective states.

Question 5.
What are long term public deposits and what are their advantages to the public?
Answer :
Companies can accept public deposits to meet their long term financial need. They are called public deposits. The procedures to get these deposits are simple and do not require many formalities. A company can accept this for a period not exceeding 5 years. The deposits are unsecured and 8% to 10% of interest is allowed.

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Question 6.
What do you mean by the Money market and how is it different from the capital market?
Answer :
The money market refers to financial institutions that deal with short term funds in the economy. The money market arranges funds for working capital. Rate of interest is high, the funds can be borrowed under the money market for a short period varying from a day, a week, a month against the different types of instruments such as trade bills, bonds, treasury bills, etc.

Question 7.
Explain in brief the part played by the stock exchange in Financial matters of business.
Answer :
The stock exchange regulates and controls business in buying, selling, and dealing in securities. They are regulated by the government. They do not engage in the purchase and sale of securities but provide a place where members can carry out their business on their own account under codes, rules, and regulations.