Chapter 12: Finance Function

Question 1

Procurement and administration of funds with the view of achieving the objectives of business

Answer 1

Finance Function

Question 2

Are those with repayment schedules of less than one year

Answer 2

Short-Term Sources of Funds

Question 3

Refer to Suppliers extending credit to a buyer for use in manufacturing, processing, or reselling goods for profit

Answer 3

Trade Creditors

Question 4

Is unsecured and permits the customer to pay for goods delivered to him in a specified number of days

Answer 4

Open-Book Credit

Question 5

Is a time draft drawn by a seller upon a purchase payable to the seller as payee, and accepted by the purchaser as evidence that the goods shipped are satisfactory and that the price is due and payable

Answer 5

Trade Acceptance

Question 6

An unconditional promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a certain sum of money to, or to the order of, a specified person or to bearer

Answer 6

Promissory Note

Question 7

Are institutions which individuals or firms may tap as source of short-term financing

Answer 7

Commercial Banks

Question 8

Are those that help business firms in borrowing funds from the money market

Answer 8

Commercial Paper Houses

Question 9

Are financial institutions that finance inventory and equipment of almost all types and sized of business firms

Answer 9

Business Finance Companies

Question 10

Are institutions that buy the accounts receivables of firms, assuming complete accounting and collection responsibilities

Answer 10

Factors

Question 11

Are also possible sources of short-term funds where industry reports indicate that these companies in the Philippines regularly make investments in short-term commercial papers and promissory notes

Answer 11

Insurance Companies