Question 1: The main disadvantage of a general partnership is: (10 marks)

• The unlimited partnership of the partners
• Disagreements among the partners
• Shared management
• Difficulty of termination

Question 2: Explain the meaning of the term Unlimited liability? (10 marks)

Question 3: Issuing bonds and debentures can affect the solvency of the company (True of False) (5 marks)

Question 4: An investor is interested in evaluating whether the company would be able to pay of a loan which is due 15 years from now. This means that the investor is interested in understanding the _______________ of the company: (5 marks)

• Financial Leverage
• Solvency
• Operating Leverage
• Liquidity

Question 5: Dividend paid to the preference shareholders provide tax shelter to the corporations (True/False) (5 marks)

Question 6: Which type of partnership is the riskiest form of partnership? (10 marks)

• Limited partnership
• General partnership
• Limited Liability partnership
• Unlimited partnership

Question 7: __________ is a financial market which required physical form? (10 marks)

• Stock exchange
• Dealers market
• Auction market
• Brokers market

Question 8: ___________ is the type of financial market which brings new cash to the corporation? (5 marks)

• Dealers market
• Auction market
• Secondary market
• None of the above

Question 9: For a corporation, whose fiscal year ends on September 30, what would be the comparative period for the Statement of changes in equity for the period ended June 30, 2019? (10 marks)

• December 31, 2018
• June 30, 2018
• September 30, 2018
• March 31, 2018

Question 10: Give one example of each of the cash inflow and cash outflow from all the three sections that are presented in the cashflow statement? (30 marks)