WINSMART ACADEMY

MOTTO: PERSONALISED TUTORING FOR LEADERS OF TOMORROW

WHATSAPP: 08024665051, 08169595996
[email protected]

BFN209 (SMS209) - INTRODUCTION TO FINANCE SUMMARY

_______ plays a very important role in any business activities, whether public
or private sector.
Finance

Finance may be defined as the ______ of money at the time it is required.

Provision

Finance may be defined as the provision of ______at the time it is required

Money

________ management is the pillar upon which all economic activities stand.
Finance

No business can survive or be sustained without________.

Finance

No business can survive or be sustained without finance.

True

_______ may be defined as the provision of money at the time it is required.

Finance

The inflows are expected to be arranged in such a way that ______ is always
available to make necessary payments as they arise.
Fund or money

Oyekanmi (2003) defined finance “as ______ affairs or money matters”.

Money

Oyekanmi (2003) defined finance “as money affairs or money_______”.

Matters

______ defined finance “as money affairs or money matters”.

Oyekanmi (2003)

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 1
Oyekanmi (2003) defined _______ “as money affairs or money matters”.
Finance

______ defined finance as money affairs or money matters.

Anao (1993)

Anao (1993) defined finance as money affairs or_______.

Money matters

According to ______ finance is the money need or needed to support an

activity, project, programme etc. and or the management of money.
Hornby (2001)

According to Hornby (2001), finance is the money need or needed to _______

an activity, project, programme and or the management of money.
Support

_______ evolved from economics as its branch in the early part of the 20th
century
Finance

Finance evolved from ______ as its branch in the early part of the 20th
century
economics

Finance evolved from economics as its branch in the early part of the
____________ century
20th

Finance evolved from economics as its _____________ in the early part of the
20th century
Branch

Finance evolved from economics as its branch in the ____________part of the

20th century
Early

Finance evolved from economics as its branch in the early part of the 20th
century but later became a separate____________
Discipline

Finance was initially concerned mainly with ____________

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 2
The keeping of records of receipts and payments; dealings simply on
bonds, debentures, banks

The field of finance originally covered mainly:

 Instruments of finance (e.g. bonds, debentures etc.)
 Institutions / intermediaries (e.g. banks, finance coys etc.)
 Capital markets (e.g. exchange etc.)

Finance was initially concerned mainly with the ___________ of records of

receipts and payments
Keeping

Finance was initially concerned mainly with the keeping of ____________ of

receipts and payments
Records

Without____________, an enterprise cannot function

Money or finance

An enterprise can function without finance

False

The finance is related to ___________ as every individual, organizations and

government operate within the economy.
Economics

The finance is related to economics as every individual, organizations and

government operate within the_____________.
Economy

Without money (finance), an enterprise cannot ____________

Function

Finance can be likened to a____________.

Lubricant

Too little of it (finance) can make a business grind to a halt; while too much
of it may lead the business having to grapple with all types of projects not
minding their usefulness.

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 3
___________ is the common denominator for the full range of activities
performed in the business.
Money

Money is the common ____________ for the full range of activities performed
in the business.
Denominator

Money is the common denominator for the full range of ____________

performed in the business.
Activities

Money is the common denominator for the full range of activities performed
in the_____________.
Business

Money is the common denominator for the full range of activities performed
in the business.
True

Money also presents its problems, particularly when inflation sets in,
resulting in changes in the purchasing power of a unit of currency.

____________ is the medium of exchange in business; the other two elements

are production/operation and marketing.
Money

Money is the _____________ of exchange in business; the other two elements

are production/operation and marketing.
Medium

Money is the medium of _____________ in business; the other two elements

are production/operation and marketing.
Exchange

Money is the medium of exchange in business; the other two elements are
_____________ and____________.
Production/operation and marketing

Money is the medium of exchange in business.

True

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 4
The interrelationship between the various elements is graphical represented
below:

According to Jones (1976), the initial investment of cash (money) in figure 1

above, is shown to provide the means whereby the entrepreneur or promoter
of the business enterprise can purchase those assets which enable the
business to have premises, equipment, transport and other items required
before the activities of the organization can take-off.

Business is also known as____________

Trading

Money is also known ____________

Finance

Manufacturing / operation activities provide goods/services to customers.

True

A ____________ generates whatever capital it needs and utilises it in activities

which generate returns on invested capital (production and marketing
activities)
Firm

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 5
A firm generates whatever ____________ it needs and utilises it (finance
activity) in activities which generate returns on invested capital (production
and marketing activities)
Capital

There are ___________ types of financing an enterprise can apply.

Two

There are two types of financing an ____________ can apply.

Enterprise

There are two types of _____________ an enterprise can apply.

Financing

Internal Finance also known as equity fund/finance is referred to

as_____________
Equity

Internal Finance is also known to as ______________

Equity fund

____________ is solely owned/contributed by the stakeholders (within) and is

referred to as an internally-generated fund.
Internal Finance

____________ is called borrowed fund/finance and is solely

owned/contributed by the stakeholders within
External Finance

External Finance which is called borrowed fund/finance and referred to

as____________
Debt

The stakeholders source _____________ from outside.

External Finance

A ____________ can sell shares to acquire equity funds.

firm/business

A firm/business can sell ___________ to acquire equity funds.

Shares

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 6
A firm/business can sell shares to acquire ______________funds.
Equity

A firm/business can sell shares to acquire equity funds.

True

____________ represent ownership rights of their holders.

Shares

Shares represent ____________rights of their holders.

Ownership

Shares represent ownership _____________ of their holders.

Rights

Shares represent ownership rights of their____________.

Holders

Buyers of shares are called shareholders/stockholders and they are the

legal-owners of the business whose shares they hold.

Buyers of shares are called ____________

Shareholders or stockholders

____________ of shares are called shareholders/stockholders

Buyers

Buyers of ___________ are called shareholders/stockholders

Shares

_____________ are the legal-owners of the business whose shares they hold.
Shareholders

For example, recruitment and promotion of employees in an organization,

payment of their wages and salaries etc. involves finance.

The ____________ of sales promotion/advertisement policies is within

marketing preview.
Evolvement

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 7
The evolvement of ___________ promotion/advertisement policies is within
marketing preview.
Sales

The evolvement of sales promotion/advertisement policies is within

____________ preview.
Marketing

_____________ invest their money in the shares of a company in the

expectation of a return on their invested capital.
Shareholders

Shareholders invest their ___________ in the shares of a company in the

expectation of a return on their invested capital.
Money

Shareholders invest their money in the ____________ of a company in the

expectation of a return on their invested capital.
Shares

Shareholders invest their money in the shares of a ____________ in the

expectation of a return on their invested capital.
Company

Shareholders invest their money in the shares of a company in the

expectation of a ____________ on their invested capital.
Return

Shareholders invest their money in the shares of a company in the

expectation of a return on their _____________ capital.
Invested

Shareholders invest their money in the shares of a company in the

expectation of a return on their____________ .
Invested capital

Shareholders invest their money in the shares of a company in the

expectation of a return on their invested capital. The return consists of
___________ and_____________.
Dividend and capital gain

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 8
Shareholders invest their money in the shares of a company in the
expectation of a return on their invested capital. The return consists of
dividend and_____________.
capital gain
______________ invest their money in the shares of a company in the
expectation of a return on their invested capital. The return consists of
dividend and capital gain.
Shareholders

Shareholders can be of two types which are ordinary and _____________

Preference

Shareholders can be of two types: preference and_____________

Ordinary

There are ___________ kinds of markets

Two

There are two kinds of markets: Financial Market and Real Assets Market

_____________ are physical or tangible assets such as plant, machinery

wheat, office, gold and buildings
Real markets

Intangible real assets include copyrights, patent, technical know-how.

Financial market____________ on financial assets

Trades

Financial market trades on____________.

Financial assets

_____________ market trades on financial assets.

Financial

Financial market trades on financial assets.

True

____________ asset promises future benefits in the form of cash payments

such as is applicable to bonds, certificate of deposits and treasury bills
Financial

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 9
There is a relationship between finance and other functions in business
enterprises.
True

____________ shareholders receive dividend at a fixed rate and they enjoy a

priority over ordinary shareholders.
Preference

_____________ receive dividend at a fixed rate and they enjoy a priority over
ordinary shareholders.
Preference shareholders

Preference shareholders receive ___________ at a fixed rate and they enjoy a

priority over ordinary shareholders.
Dividend

Preference shareholders receive dividend at a ____________ rate and they

enjoy a priority over ordinary shareholders.
Fixed

The dividend rate for ______ is not fixed and can vary from year to year
depending on the board of directors.
ordinary shareholders

The dividend rate for ordinary shareholders is not fixed and can vary from
year to year depending on the board of directors.
True

A company can also obtain equity funds by retaining earnings available for
shareholders. This is known as _______
Retained earnings

_______can be obtained after a company distributes all earnings to

shareholders, it can re-acquire new capital from the same source (existing
shareholders) by issuing new shares.
Rights Shares

________ may be made to attract new (and the existing) shareholders to

contribute equity capital.
Public issue

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 10
________ are not owners of the company but provide money to enterprises as
loan which are debt.
Creditors/Lenders (External Finance)

The ____________ are furnished for a specific period of time at a fixed rate of
interest.
Loans

The loans are furnished for a specific ____________ of time at a fixed rate of
interest.
Period

The loans are furnished for a specific period of time at a fixed rate
of____________.
Interest

A _____________ performs finance functions simultaneously and

continuously in the normal course of its activities.
business organization

A business organization performs ____________ functions simultaneously and

continuously in the normal course of its activities.
Finance

_____________ require skill and professional planning, control and execution

of an organization’s activities.
Finance functions

_____________ decisions involve capital expenditures which are referred to as

capital budgeting decision.
Investment

______________ is the decision of allocating capital to long-term assets that

will bring in beneficial yield (cash inflow) in the future.
Investment decision

There are two important aspects of investment decisions:

 The evaluation of the prospective profitability of new investment
 The measurement of a rate against the prospective return of new
investments could be compared

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 11
The ____________ identifies the time, place and the technique for acquiring
adequate funds to meet the enterprise’s investment needs.
financial manager

The mix of appropriate proportion of internal (equity) and external (debt)

finance required by the enterprise is known as the ___________
capital structure

The Financial Manager strives to obtain and sustain the best financing mix,
to optimize the capital structure, which forms the base of financing.

The ____________ is said to be optimum when the market value of shares is

maximized.
capital structure

The capital structure is said to be _____________ when the market value of

shares is maximized.
optimum

The capital structure is said to be optimum when the ____________ of shares

is maximized.
market value

The capital structure is said to be optimum when the market value of shares
is____________.
Maximized

Which affects the shareholders and the business as a whole – the decision to
distribute all profits or retain same?
Dividend Function

The proportion of profits distributed as dividend is called the _____________

dividend-payout ratio

The ____________ is the retained portion of profits.

retention ratio

The _____________ is determined by its impact on the shareholder’s value.

dividend policy

The dividend policy is determined by its impact on the ____________ value.

shareholder’s

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 12
Liquidity and profitability affect investment in current assets in business
organizations.
True

____________ and profitability affect investment in current assets in business

organizations.
Liquidity

Liquidity and ____________ affect investment in current assets in business

organizations.
Profitability

Liquidity and profitability affect _____________ in current assets in business

organizations.
Investment

Liquidity and profitability affect investment in _____________ in business

organizations.
current assets

____________ of an enterprise is affected by the level of management of

current asset.
Liquidity

Liquidity of an ____________ is affected by the level of management of current

asset.
enterprise

Liquidity of an enterprise is affected by the level of ____________ of current

asset.
management

Liquidity of an enterprise is affected by the level of management

of_____________.
current asset

Risk of ____________, in extreme situations, can lead to a business

insolvency.
Illiquidity

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 13
Risk of illiquidity (lack of liquidity), in extreme situations, can lead to
a____________.
business insolvency

Risk of illiquidity (lack of liquidity), in extreme situations, can lead to a

business_____________.
Insolvency

_____________ if properly/efficiently managed would safeguard the business

organization against risk of illiquidity
Current assets

Current assets if properly or efficiently managed would safeguard the

business organization against risk of ______________
Illiquidity

_____________ is concerned with the acquisition or disposal of assets through

commitment or recommitment of funds on a continuous basis.
Financial decisions

The risk that threatens the complete or partial loss of the postponed fruits of
effort can be classified under four main headings:
 Physical risks
 Technical risks
 Economic risks
 Political risks

_____________ are risks that some accident may destroy or spoil some
physical goods created by the work financed.
Physical Risks and Finance

For example:

 A stock of food may go bad or be eaten up by insects or animals

 A house (premises) may be destroyed by fire

 A ship may be wrecked or sunk.

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 14
_____________ are those risks that arise from the fact that the producer’s
skill or that of the subordinates may not be up to the expected level for the
plan, hence it may fall short of achieving the intention.
Technical Risks and Finance

____________ risks is usually the greatest and closely related to finance.

Economic Risks and Finance

There are ____________ main kinds of Economic Risks and Finance

Four

There are four main kinds of this risk:

 The risk of an inadequate supply of the resources needed to make the
product planned so that it costs more to make than had been
expected or even cannot be made at all
 The risk of fall in demand for the product once it has been made.
 The risk of a failure of the demand for a product is increased when
that product is itself highly durable
 The risk that potential purchasers may be prevented from buying by a
shortage of finance

_____________ are risks of losses as the result of unforeseen intervention by

governments.
Political Risk and Finance

Example includes Rent Act, which can affect the status of workers who are
tenants if it is not favourable; corporate tax can affect the profit margin of
an enterprise and this may in turn have effect on the finances of the
organization.

There are _____________ ways of avoiding or reducing risk.

Three

There are three ways of avoiding or reducing risk. These are as follows:
 Appropriate measures involving additional expenditure
 Turn into regular costs by pooling them with large numbers of similar
risks
 Combing them with other risks operating in the opposite direction

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 15
The simplest form of finance is where the whole of finance required by a
particular enterprise is provided by an Entrepreneur (a single person).

The following are ways in which risks and profits can be shared between the
different people who jointly contribute to the finance of a business
 A full share of all risk and profits
 A prior claim on any profits the enterprise can earn up to a certain
limited amount, with or without some share in the remainder.
 A loan of money on payment of a fixed amount of interest which must
be paid whether the concern is earning a profit or not.
 The renting of land or other durable goods is return for fixed money
(rent), payable whether or not the enterprise is able to earn a profit
(leasing).

______________ and Limited Liability Company are two main institutional

forms under which people join together on equal terms to provide the
finance needed for an enterprise, sharing fully in both risks and profits.
Partnership

_____________ and _____________ are two main institutional forms under

which people join together on equal terms to provide the finance needed for
an enterprise, sharing fully in both risks and profits.
Partnership and Limited Liability Company

The finance manager’s duties include the following:

 Budgeting
 Raising funds
 Selecting and evaluating projects
 Planning the marketing and pricing strategies

The ____________ is always supposed to be a specialist/professional, with

knowledge of many areas of finance.
finance manager

_____________ is concerned with the flow of fund, which is the life blood of
the business.
Finance

Finance is concerned with the flow of____________, which is the life blood of
the business.
PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION
AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 16
Fund

The smaller business consolidates many duties in fewer sections and units.
True

The ____________ is an active participant in long -range financial planning.

Treasurer

The Treasurer is an ____________ participant in long -range financial

planning.
Active

The Treasurer is an active participant in long -range ____________ planning.

Financial

The Treasurer is an active participant in long -range financial____________.

Planning
The functions of finance manager are condensed into the following:
 Financing and investment
 Accounting and control
 Forecasting and long-run planning
 Pricing

In the _____________ of a country, prices of goods and services are

determined by the forces of demand and supply.
market economy

In the market economy of a country, ____________ of goods and services are

determined by the forces of demand and supply.
Prices

In the market economy of a country, prices of goods and services are

determined by the _____________ of demand and supply.
Forces

In the market economy of a country, prices of goods and services are

determined by the forces of____________ and ____________.
demand and supply

_____________ produce goods and services desired by the community in

which they serve as efficiently as possible.

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 17
Firms

Firms produce goods and services desired by the _____________ in which they
serve as efficiently as possible.
Community

_____________ is a vital organ of a market economy, showing the goods and

services required in the community.
Price mechanism

When the goods and services are in high demand, their prices
will____________
Rise

When the goods and services are in high demand, their prices will rise.
True

The ____________ price will eventually be reached where demand and supply
match.
equilibrium

The equilibrium price will eventually be reached where demand and supply
match.
True

____________ are frequently profit oriented with maximization of profit as the

proper objective.
Business firms

Business firms are frequently profit oriented with ____________ of profit as

the proper objective.
Maximization

Business firms are frequently profit oriented with maximization of profit as

the proper objective.

Business firms are frequently _____________ oriented with maximization of

profit as the proper objective.
Profit

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 18
Business firms are frequently profit oriented with maximization of profit as
the proper____________.
Objective

______________ may be expressed as the amount a business can spend in a

period and be as “well off” at the end of the period than as at the beginning.
Profit

______________ is the expected variability of the income flow.

Risk

Risk is the expected variability of the ___________ flow.

income

Risk is the expected variability of the income____________.

flow

Risk is the expected variability of the income flow.

True

Risk is the expected ____________of the income flow.

variability

Pandey (2005) summarised profit maximization limitations as follows

 It is vague
 It ignores the timing of returns
 It ignores risk.

Profit maximization objective is not always clear.

True

Market value assessment of the appropriate prices of a business is

considered thus:
 Current and expected income
 Uncertainty and timing of income streams
 Dividend policy
 Factors the market considers relevant

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 19
The ____________ reflects the markets’ view of management’s activity record
of business investment, financing and dividend decisions.
market price

The ____________ view is largely based upon information provided by

management in the business’s annual and other reports.
market’s

The market’s view is largely based upon ____________ provided by

management in the business’s annual and other reports.
information

The market’s view is largely based upon information provided by

___________in the business’s annual and other reports.
management

The market’s view is largely based upon information provided by

management in the business’s annual and other___________ .
reports

The market’s view is largely based upon information provided by

management in the business’s ____________ and other reports.
Annual

______________ stated that the basis of the theory of financial management is

the same as that of maximisation of owners’ welfare (classical theory of the
firm).
Pandey (2005)

____________ is the person responsible for performing finance functions.

Financial Manager

The scope of financial management includes

 Promotion
 Re-organization
 Expansion
 Diversification

As a cardinal duty, the ____________ sees that a firm is well funded to be able
to meet its obligation.
finance manager

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 20
______________ is the operating decisions in the areas of pricing, costing of
the volume of output and the firm’s product lines selection.
Profit planning

Fixed costs remain constant while variable costs change in direct proportion
to changes in volume of goods.
True

The ____________ enhance profit fluctuation at a higher degree than the

fluctuations in sales.
fixed costs

_____________ is the meeting point for investors (lenders) and firms

(borrowers), hence, the understanding of the operations of the capital
markets and the way in which the capital markets value securities.
Capital market

In Nigeria, the Capital market is known as the ______________

Nigeria Stock Exchange (NSE)

NSE stands for____________

Nigeria Stock Exchange

The _____________ is the market that serves as an intermediary between

fundraisers and supplier of capital.
Exchange

The ____________ is the regulator and monitor of activities in the Nigerian

Capital Market in order to protect both the largely unaware investing public
and issuers of securities.
Nigerian Securities and Exchange Commission (SEC)

SEC stands for_____________

Nigerian Securities and Exchange Commission

The value of a firm share may shrink or decline.

True

Financial statement analysis is used for ___________ purposes

Two

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 21
Financial statement analysis is used for two purposes, namely: definitive
purpose and_____________.
information purpose

_____________ is used for future plans of the enterprise.

Financial statement

The financial statement analysis is used as managerial guide and aid.

Financial statement is an ____________report.

accounting

Financial statement is an accounting_____________.

report

Financial statement is an accounting report.

True

The pro forma (typical) financial statement of an enterprise is made up of

the following:
 Balance sheet
 Income statement
 Cash flow statement

There are ____________ main components of financial statement

Three

These are the main components of financial statement used for financial
analysis
 Balance Sheet
 Income Statement
 Cash flow Statement

______ shows the present statement of a business.

Balance sheet

______ is otherwise known as profit and loss account.

Income statement

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 22
______ is a summary of income and expenses, gains and losses of a business
organisation and ends with the determination of net income for a specific
period.
Income statement

_____ reveals the revenue (income) and expense (disbursements); hence the
profit and loss is expressed with the true position of the net income.
Income statement

______ refer to as the statement of income, statement of earnings and

statement of operations.
Income statement

The elements of income statement are:

 Net sales (revenue/income)
 Cost of goods sold or cost of sales
 Other operating revenue
 Selling expenses
 Administrative expenses

The ____________ enables management to explain the changes in cash and

cash equivalent production.
cash statement

The basic elements of cash flow include the following

 Operating activities
 Investing activities
 Financing activities

_______ consist of all transactions plus other events that are not investing or
financing activities.
Operating activities

______ from operating activities are generally the cash effects of transactions
and other events that are added to determine the net income.
Cash flows

______ consist of lending money and collection of these loans and acquiring
and selling investments and productive long-term assets.
Investing activities

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 23
______ consist of cash flows relating to liability and owners’ equity.
Financing activities

______ helps in presenting the financial to oversee the resources of the

information and data of an organization.
Financial statement

______ is the overall responsibility of management to oversee the resources of

the enterprise.
Financial statement

_____ presents the accounting reports with dependable financial information

to guide and aid management in evaluating the performance of the business
outfit.
Financial statement

______ analysis helps management predict, compare and evaluate the

enterprise’s activities and forecast the earning ability of the enterprise.
Financial statement

_____ is the financial statement analysis that will direct management on the
financial condition of the enterprise as well as the statement of affairs of the
enterprise at a particular moment in time.
Financial statement

______ is the profit plan base.

Budget

Budget is the _____ plan base.

Profit

Budget is the profit _____ base.

Plan

Budget is the profit plan base.

True

Profit planning is related to considering four main factors – fixed costs,

variable costs, selling price and sales volume.

______ is related to considering four main factors – fixed costs, variable

costs, selling price and sales volume.

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 24
Profit planning

______ provides the means in which the enterprise can control to a degree,
its relationship with its external environment and at the same time, it is
controlling its internal operations accordingly
Pricing policy

_______ are the balance of goods on hand (part of current assets).

Inventories

_______ refers to the management of current or short-term assets and short-

term liabilities.
Working capital management

The components of short term assets include

 Inventories
 Loans and advances
 Debtors
 Investments
 Cash and bank balances

Short-term liabilities include the following

 Creditors
 Trade advances
 Borrowings and provisions

_______ is concerned with the ways and means of making working capital
adequate to meet the firm’s short-term obligations.
Working capital management

The effective working capital management involves the adoption of

appropriate ______ policy.
Management

The effective working capital management involves the adoption of

appropriate management______.
Policy

The main components of working capital management

 Cash management
 Receivables management
 Inventory management
PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION
AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 25
______ focuses on managing cash flows in and out of an enterprise
Cash management

______ attempts to control cash cycle at a minimum cost and tries to achieve
liquidity.
Cash management

_____ places cash as the most significant and at the same time the least
productive asset at the disposed of an enterprise.
Cash management
______ is a means of settling indebtedness of the enterprise.
Cash management

Cash management is concerned with the managing of:

 Cash flows into and out of the enterprise
 Cash flows within the enterprise
 Cash balances held by the enterprise at a point of time by financing
deficit or investing surplus cash.

There are ______motives for holding cash

Three

Business need to hold cash to achieve the following three motives:

Transactions, Precautionary and______
Speculative

_______ requires an enterprise to hold cash to perform it ordinary business

activities.
Transaction motive

_______ motive is for the enterprise to meet up contingencies as they arise in

the future.
Precautionary

_______ motive is holding cash for investing in profit -making opportunities

as and when the need arises.
Speculative

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 26
A ______ or one – man business, as the name implies, is a business concern
owned by one person who often is also engaged actively in the running of the
business.
Sole proprietorship

A ______ is generally defined as a legal relationship between two or more

persons where each person contributes something in order to carry on a
lawful business with a view of profit which is to be shared between the
partners in a proportion agreed upon by them.
Partnership

A ______ (or company) may be defined as an artificial creature, invisible,

intangible, and existing only in contemplation of law.
Limited Liability Company

_______ sources of funds represent current liabilities (funds owed).

Short-term

Examples of current liabilities and their sources are explained as follows:

 owner’s equity
 bank overdraft
 account payable
 bill finance
 deferred tax payment
 factoring
 hire purchase finance arrangement
 stock finance

The long-term sources of finance for a firm

 Common stock
 Preference shares
 Lease financing

There are various types of preference shares:

 Cumulative preference shares
 Participating Non-Cumulative shares
 Participating Cumulative shares
 Redeemable and irredeemable Preference shares
 Convertible Preference shares

Preference shares could be cumulative or______.

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 27
non-cumulative

______ allow for dividend payment to be deferred if a firm does not make
adequate profit
to pay such dividend.
Cumulative preference shares

Non-cumulative preference shares do not allow for any form of deferment of

dividend payment.
True

______ preference shares do not allow for any form of deferment of dividend
payment.
Non-cumulative

______ is a class of shareholders is entitled to a non-cumulative dividend at

a fixed rate but without a right to participate in the residual profit of a firm
after the equity shareholders has been paid.
Participating Non-Cumulative Preference Shares

________ is a class of shareholders is entitled to participate in the residual

profit of a firm in addition to the cumulative fixed dividend rate (i.e. they
combine the features of cumulative and participating).
Participating Cumulative Preference Shares

_______ are normally redeemed after a fixed period of time.

Redeemable preference shares

_______ convey upon the holders the right to convert these shares into equity
shares in accordance with the terms of issues.
Convertible preference shares

_______ is a process of achieving specified objectives.

Planning

______ involves the selection of objectives and the means of achieving them.
Planning

Planning involves the ______ of objectives and the means of achieving them.
Selection

Planning involves taking decisions in advance on the following:

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 28
  What should be done?
 How could it be done?
 When should it be done?
 By whom should it be done?

Financial planning is not just forecasting.

True

Financial planning does not attempt to minimise risk

True

A financial plan is a______.

Budget

A financial plan is a budget.

True

A ______ interprets all the elements of a plan in financial terms.

Budget

Finance can be classified into two broad categories, namely: micro and
macro finance

_______ relates to financing decisions and practices of individual households,

businesses and non-business organisations.
Micro finance

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 29
_______ relates to the financing decisions and practices of the entire
economy.
Macro finance

No decision involving finance can be efficiently and effectively implemented

without______.
Financial management

The functions of finance include sourcing and application of funds, and

demands that money is used in the firm wisely, that is, when and where it is
desired.

Christy and Roden (1973) tried to narrow the definition of finance by

defining it as the study of the nature and use of the means of payment.

_____ defines finance as the art and science of managing money.

Gitman (2000)

Gitman (2000) defines _____ as the art and science of managing money.
Finance

Finance is a special functional area of ______ administration.

Business

Finance is a special functional area of business_____________.

Administration

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 30
______is when a company distributes all its earnings to shareholders and
acquires new capital from same source by issuing new shares
Rights issue

Shareholders that receive dividend at a fixed rate and enjoy priority over
ordinary shareholders are known as ________
Preference shareholders

The following are the elements that must be held in balance to enable
optimum utilization of resources of the enterprise except _______
Investment

______ is the provision of money at the time it is required

Finance

A market that promises future benefits in the form of cash payments is

known as _________
Retail market

_______ is called borrowed fund and is also referred to as a debt

External Finance

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 31
The amount a business can spend in a period and be as “well off” at the end
of the period than as at the beginning is known as _______
Profit

_______ are risks that arise from the fact that the producer’s skill or that of
the subordinates may not be up to the expected level for the plan, hence it
may fall short of achieving the intention.
Technical risks

The following are three ways of avoiding or reducing risk except_______

Investing in a risky investment

The simplest form of finance is where the whole of finance required by a

particular enterprise is provided by _______
Entrepreneur

______is when a company distributes all its earnings to shareholders and

acquires new capital from same source by issuing new shares
Rights issue

Shareholders that receive dividend at a fixed rate and enjoy priority over
ordinary shareholders are known as ________
Preference shareholders

The following are the elements that must be held in balance to enable
optimum utilization of resources of the enterprise except _______
Investment

______ is the provision of money at the time it is required

Answer
Finance

A market that promises future benefits in the form of cash payments is

known as _________
Retail market

_______ is called borrowed fund and is also referred to as a debt

External Finance

The amount a business can spend in a period and be as “well off” at the end
of the period than as at the beginning is known as ________

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 32
Profit

_______ are risks that arise from the fact that the producer’s skill or that of
the subordinates may not be up to the expected level for the plan, hence it
may fall short of achieving the intention.
Technical risks

The following are three ways of avoiding or reducing risk except____

Investing in a risky investment

The simplest form of finance is where the whole of finance required by a

particular enterprise is provided by _______
Entrepreneur

The following are ways of raising funds in the scope of Financial

Management during major events in the life of the firm except _____
Acquisition of financial resources for the organisation

________ is a dynamic and evolving art of making daily financial decisions

and control in households, businesses, non-business organisations and
government.
Financial Management

Shareholders can be of two types Ordinary and _______

Preference shares

The functions of _______include sourcing and application of funds, and

demands that money is used in the firm wisely
Finance

The following are areas of operating decisions in profit planning except______

Marketing

_______is a selection of objectives and the means of achieving them

Planning

The class of shares which ranks above equity shares are ______
Preference shares

The following are three types of leases except_____

Investing lease

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 33
Two major external sources of long-term funds are Financial Institutions
and ________
Capital market

______shares convey upon the holder the right to convert shares into equity
shares in accordance with the terms of issues
Convertible preference shares

_______ allows for dividend payment to be deferred if a firm does not make
adequate profit to pay such dividend.
Cumulative preference shares

The following are the motives for holding cash except_______

Budgetary motive

Cash management is concerned with the management of the following

except________
None of the above

The following are some of the various types of preference shares except_____
Non convertible preference shares

The ________is the market that serves as an intermediary between fund-

raisers and suppliers of capital
NSE

The short-term liabilities of a firm includes all of the following except______

Lendings

The following are the main components of working capital management

except______
Fixed income

One of the following is not contained in the memorandum of association of a

company_____
Address of the company and the reason why it is in existence

The finance function to staff and departments will be dependent upon the
size and _______of the business organisation.
Magnitude

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 34
A person responsible for performing finance functions In a modern firm is
known as _______
Financial Manager

______is when a company distributes all its earnings to shareholders and

acquires new capital from same source by issuing new shares
Rights issue

Shareholders that receive dividend at a fixed rate and enjoy priority over
ordinary shareholders are known as ________
Preference shareholders

The following are the elements that must be held in balance to enable
optimum utilization of resources of the enterprise except _______
Investment

_____ is the provision of money at the time it is required

Finance

A market that promises future benefits in the form of cash payments is

known as _________
Retail market

_______ is called borrowed fund and is also referred to as a debt

External Finance

The amount a business can spend in a period and be as “well off” at the end
of the period than as at the beginning is known as ________
Profit

_______ are risks that arise from the fact that the producer’s skill or that of
the subordinates may not be up to the expected level for the plan, hence it
may fall short of achieving the intention.
Technical risks

The amount a business can spend in a period and be as “well off” at the end
of the period than as at the beginning is known as _____
Profit

_______ is called borrowed fund and is also referred to as a debt

External Finance

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 35
A market that promises future benefits in the form of cash payments is
known as ______
Retail market

_______ is the provision of money at the time it is required

Finance

______is when a company distributes all its earnings to shareholders and

acquires new capital from same source by issuing new shares
Rights issue

_______ allows for dividend payment to be deferred if a firm does not make
adequate profit to pay such dividend.
Cumulative preference shares

The amount a business can spend in a period and be as “well off” at the end
of the period than as at the beginning is known as _____
Profit

Business need to hold cash to achieve the following motives except

Special motive

Compare with cash management the management of receivables is not very

vital to the business as a going concern
False

Working capital management refers to the management of______

Short term assets and short term liabilities

In a producing enterprise imventories comprise_____

Raw materials work in progress and finished products

Which of the following represents a true components of short term

assets_____
Inventories loans and advances debtors investments and cash and bank
balances

Which of this statement is not correct of inventories?

Inventories need to be managed properly to avoid unnecessary cost

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 36
The practice of holding cash for investing in profit making opportunities as
and when the need arises is known as_____
Speculative motive

Inventory management is a tool to aid excessive and inadequate levels of

inventories and maintain sufficient inventory for the smooth operations of
the enterprise in terms of production and sales output
False

Which of the following is not an essential features of a partnership

Partnership is separated from the partners

Which is a feature of a partnership business in Lagos state?

Setting up cost is low and it is easy to form

There are four main forms of business organizations the Sole

proprietorship Cooperative Partnership and Limited Liability Company
False

A company is legally formed by meeting the conditions stipulated in the

______
Companies and Allied Matters Act Decree 1990

The promoters of a limited liability company must apply for registration at

the Corporate Affairs Commission together with both a_____
Memorandum and Articles of Association

The Memorandum of Association contains the following except______

Appointment of directors

Which is not a feature of the Articles of Association?

Address of the registered office of the company

In company formation the power to issues a Certificate of Incorporation is

vested on the_____
Registrar General

Which is not a features of a company?

External audit is not compulsory

Which is not a reaseon for planning?

Planning creates a gap between objective and achievement

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 37
Finance plays a very important role in any _____activities
Business

A business is a concern, an enterprise, or organization set up by an

individual or group of individuals for the purpose of making _____from
operations of the concern.
Profit

Finance may be defined as the provision of money at the time it is______

Required

The______ are expected to be arranged in such a way that fund (money) is

always available to make necessary payments as they arise.
Inflows

PLEASE PATRONISE US FOR MORE EXAM SUMMARY, PAST QUESTION

AND TMA (30/30) - WHATSAPP 08024665051, 08169595996 Page 38