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Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 8 (60 MCQs)

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1. What are the advantages of debt financing for a business?
2. This refers to funds raised through borrowing and loans from financial institutions or banks and must be repaid with an interest rate.
3. It is a document which the borrower gives to the lending institution in exchange for the money he borrowed is called .....
4. Which capital is used for buying assets?
5. A firm with a high debt-equity ratio wants to expand. Which source of finance would most likely improve its financial structure?
6. Preference shareholders get prefernce over equity shares for .....
7. What is the main characteristic of "retained profit" as a source of finance?
8. Capital obtained by issue of equity shares is known as-?
9. Which of these is a short term source of finance?
10. Firms sell valuable assets and lease them back again. This means that they have capital from the sale of asset as well as the continuing use of these assets.
11. Which of the following is considered a financial instrument?
12. Which sources of finance is most likely to be used by a firm planning to takeover another firm?
13. Short term funds are those funds which are required for a period not exceeding:
14. A trading concern will require more fixed capital as compared to a manufacturing concern.
15. It refers to the ability of a company to pay maturing obligations. The current assets of a company are compared with its current liabilities to determine its paying capacity.
16. Which is the most likely use for Debt factoring?
17. Is the spending by a business on non-current assets such as premises, production equipment and vehicles.
18. Does a Government Grant have to be paid back?
19. A Venture Capitalist / Business Angel specialises in funding risky businesses.
20. What does internal source of finance mean?
21. An advantage that an overdraft has over a bank loan is that:
22. A Venture Capital / Business Angel will expect a share of the profits.
23. Increasing credit terms to costumers are likely to:
24. Is the money invested into a company by shareholders when they buy shares.
25. Funds can be raised through equity issue without creating any charge on the assets of the company.
26. 13 Which of the following will probably not be considered by a business before deciding on the most suitable source of finance? 1) The purpose of the finance-what it will be used for 2) How long the finance is used for 3) The rate of interest on loans 4) The opinions of the workers
27. If a business is required to install safety equipment to prevent workplace injuries, which type of legislation is this an example of?
28. Borrowed fund refers to funds raised through borrowing and loans from financial institutions or banks.
29. The source of finance that is provided by the Owners is called
30. Classify each source of finance as either internal or externalWorking capital
31. Why might retained profit be considered desirable?
32. Money received through equity shares are risky for the companies .....
33. Out of the following, which one is not a feature of owners fund.
34. They are considered owners of the business and have voting rights, entitled to dividends which depend on their share and earnings of the corporation. They are called .....
35. What is share capital?
36. ..... was the first company in India to issue convertible zero interest debentures in January 1990
37. What is the formula for calculating sales revenue?
38. Which of the following is an advantage to an entrepreneur of using venture capital to secure finance for a business start-up?
39. What is the main advantage of using retained earnings?
40. Dividend is paid only on .....
41. Debenture is an acknowledgment of
42. Which of the following best describes finance?
43. ..... are debt instrument that does not carry a specific rate of interest, but issued at a heavy discount
44. With which one of the following sources of finance, is the term redeemable associated?
45. What type of business finance is required to increase inventory without having cash in hand
46. Case study:Apple plans to develop a prototype for an iPhones with a flexible display. Which of the following sources of finance would be most appropriate?
47. In the flow of funds within an organization, what are the typical sources of funds?
48. How many years does it take to be considered a short term credit?
49. What is an advantage of a business using owner's capital as a source of finance?
50. The sources that provide funds for a period exceeding 5 years is called
51. What is the significance of working capital to a business?
52. GDR can not be issued in which of the following country?
53. Which of the following is not a feature of an optimal capital structure?
54. Under which of the following conditions the working capital requirement of a business will not be high.
55. A firm with slow sales turnover, credit sales or a firm during peak season will require ..... working capital
56. VENTURE CAPITALISTS are avilable for .....
57. What are the main costs involved in making and selling goods or services?
58. Maximises the value of firm is
59. The opening cash balances for a business was US$ 35700 and the net cash flow was negative US$ 11500 the clsoing balance is:
60. Sue Yu and Partners is a solicitors wanting to expand and buy new premises. Which source of finance is most suitable?
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