This quiz works best with JavaScript enabled. Home > Cbse > Class 11 > Commerce > Business Studies > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 12 (39 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Your financial records are not confidential, so you have to show them to banks or investors A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 2. Which of the following is an example of an internal source of business finance? A) Retained earnings. B) Stock issuance. C) Bank loan. D) Venture capital. Show Answer Correct Answer: A) Retained earnings. 3. Preference share holders are called A) Executives of the company. B) Partners of the company. C) Owners of the compnay. D) Guardians of the company. Show Answer Correct Answer: C) Owners of the compnay. 4. What is batch production? A) A system where items arrive just before they are needed. B) A manufacturing process in which components or goods are produced in groups (batches). C) A method of producing a single good/service at a time. D) A process where output is made primarily using labour. Show Answer Correct Answer: B) A manufacturing process in which components or goods are produced in groups (batches). 5. This long-term source of finance comes from the person who owns the business. A) Retained profit. B) Crowd funding. C) Venture capital. D) Personal savings. Show Answer Correct Answer: D) Personal savings. 6. ADRs/GDRs can be issued by A) Only listed companies. B) Listed and un listed companies. C) None of the above. D) Only companies listed on BSE. Show Answer Correct Answer: A) Only listed companies. 7. What source of finance often requires no interest, equity, security or repayment? A) Crowdfunding. B) Overdraft. C) Bank loan. D) Taking on a new partner. Show Answer Correct Answer: A) Crowdfunding. 8. Whichof thefollowing is adrawbackfor anentrepreneursetting up a business as asole trader? A) Unlimitedliability. B) Financialaccountsarekeptprivate. C) Profit is shared. D) Limited liability. Show Answer Correct Answer: A) Unlimitedliability. 9. Complete the following statements with appropriate word(s) in the blank spaces:1. The relationship between the size of business and the need for its finance is ..... A) Direct. B) Inverse. C) Positive. D) None of the above. Show Answer Correct Answer: A) Direct. 10. Which of the following instrument is also known as Hybrid Security? A) Preference shares. B) Equity shares. C) Public deposits. D) Debentures. Show Answer Correct Answer: A) Preference shares. 11. Which of the following is not an internal source of business finance? A) Bank loans. B) Venture capital. C) Personal savings. D) Stock issuance. Show Answer Correct Answer: A) Bank loans. 12. An external source of finance that involves selling trade receivables A) Debt factoring. B) Mortgage. C) Debenture. D) None of the above. Show Answer Correct Answer: A) Debt factoring. 13. ..... is an example of short term finance. A) Shares. B) Debentures. C) Trade Credit. D) None of these. Show Answer Correct Answer: C) Trade Credit. 14. Firms can raise cash by selling assets they they no longer require-normally these are non-current assets. Examples would be a business selling land or buildings that they no longer utilize. A) Retained Profit. B) Sale of Unwanted Assets. C) Sale and Leaseback. D) None of the above. Show Answer Correct Answer: B) Sale of Unwanted Assets. 15. "The money invested by an individual or group that is willing to take the risk of funding a new business in exchange for an agreed share of the profits" best describes which long term source of finance? A) Share capital. B) Retained profit. C) Loans. D) Venture capital. Show Answer Correct Answer: D) Venture capital. 16. What is the process of obtaining money from a bank or financial institution with the agreement to pay it back with interest at a later date called? A) Borrowing. B) Renting. C) Donating. D) Stealing. Show Answer Correct Answer: A) Borrowing. 17. What are the factors which affect the method of finance chosen? A) How long is the money needed for, what is the money needed for, and type and size of the business. B) What risk is involved, how much is needed, and cost of finance. C) What risk is involved, type and size of the business, and cost of finance. D) How long is the money needed for, what is the money needed for, and how much is needed. Show Answer Correct Answer: C) What risk is involved, type and size of the business, and cost of finance. 18. International source of fiannce is ..... A) ADR AND GDR. B) FDI. C) BOTH. D) NONE. Show Answer Correct Answer: C) BOTH. 19. A long-term external source of finance used to purchase land or buildings A) Debt factoring. B) Mortgage. C) Debenture. D) None of the above. Show Answer Correct Answer: B) Mortgage. 20. What is a characteristic of debentures? A) They don't require repayment. B) They give voting rights. C) They must be repaid after a specified period. D) They are short-term loans. Show Answer Correct Answer: C) They must be repaid after a specified period. 21. There's tax benefit in ..... A) Equity shares. B) Debentures. C) Preference shares. D) None of these. Show Answer Correct Answer: B) Debentures. 22. Which source of finance does not incur interest? A) Overdraft. B) Retained profit. C) Bank loan. D) Trade credit. Show Answer Correct Answer: B) Retained profit. 23. What does the Consumer Prices Index (CPI) measure? A) The amount of government spending. B) The total value of goods produced. C) Changes in average prices over time. D) The number of unemployed people. Show Answer Correct Answer: C) Changes in average prices over time. 24. What is the term used for the money that a business has to pay back to its creditors? A) Debt. B) Investment. C) Credit. D) Profit. Show Answer Correct Answer: A) Debt. 25. Complete the following statements with appropriate word(s) in the blank spaces:8. Retained Earning is called ..... A) Public Deposits. B) Self Financing. C) All the above. D) None of the above. Show Answer Correct Answer: B) Self Financing. 26. Finance is concerned with the following, except? A) Raising Money ( Financing). B) Investing Money. C) Operating Cash. D) None of the above. Show Answer Correct Answer: C) Operating Cash. 27. Which of the following is an external source of finance? A) Preference shares. B) Retained earnings. C) Debentures. D) Equity shares. Show Answer Correct Answer: C) Debentures. 28. The financial requirements of an enterprise do not end with the procurement of fixed assets. No matter how small or large a business is, it needs funds for its day-to-day operations. This is known as ..... of an enterprise. A) Working Capital. B) Short-term Capital. C) Long-term Capital. D) Fixed Capital. Show Answer Correct Answer: A) Working Capital. 29. What is the formula for gross profit? A) Selling price x sales volume. B) Total costs/output. C) Gross profit/Sales revenue x100. D) Revenue-cost of sales. Show Answer Correct Answer: D) Revenue-cost of sales. 30. Which external source of business finance involves obtaining funds from suppliers or vendors without having to pay for the goods or services immediately? A) Bank loan. B) Venture capital. C) Trade credit. D) Personal savings. Show Answer Correct Answer: C) Trade credit. 31. Which of the following is an example of external finance for a limited company? A) Retained profits of the company. B) Selling shares. C) Sale of assets no longer used in the business. D) Reducing stocks. Show Answer Correct Answer: B) Selling shares. 32. Which of the following may be preferred for avoiding dilution of control A) Equity shares. B) Debentures. C) Both 1 and 2. D) None of these. Show Answer Correct Answer: B) Debentures. 33. The working capital of a business is given by A) Non-current assets. B) Capital employed. C) Net current asset. D) Net assets. Show Answer Correct Answer: C) Net current asset. 34. Retained earning refers to A) Profits reinvested in the busioness. B) Money borrowed from bank. C) Selling of accounts receivables to a third party. D) Shares are issued to existing shareholders. Show Answer Correct Answer: A) Profits reinvested in the busioness. 35. It accepts deposits from individuals and organizations that have excess funds and provide loans to those who are in need. This financial institution is called ..... A) Credit unions. B) Investment banks. C) Insurance companies. D) Commercial banks. Show Answer Correct Answer: D) Commercial banks. 36. This refers the funds invested by the company owners for its development, e.g., equity and preference share capitals and retained earnings. A) Owner's Fund. B) Borrowed Fund. C) Both (A) and (B). D) None of the above. Show Answer Correct Answer: A) Owner's Fund. 37. Which is an example of Revenue expenditure A) Premises. B) Salary. C) Motor Van. D) Gym equipment. Show Answer Correct Answer: B) Salary. 38. Which of the following is a typical trade credit term? A) 30-90 days to pay suppliers. B) Interest-free lifetime payments. C) Payment only once per year. D) Unlimited credit use. Show Answer Correct Answer: A) 30-90 days to pay suppliers. 39. ABC ltd wants to issue huge amount of shares to raise its capital but the directors decided not to dilute the control to more people, which shares should they issue: A) Preference shares. B) Equity shares. C) Both of these. D) None of these. Show Answer Correct Answer: A) Preference shares. ← PreviousRelated QuizzesCommerce QuizzesClass 11 QuizzesClass 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 1Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 2Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 3Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 4Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 5Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 6Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 7Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books