This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 1 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which is not an capital expenditure example A) Computer. B) Rent. C) Buildings. D) Furniture & fixtures. Show Answer Correct Answer: B) Rent. 2. Which other services do financial institutions provide in addition to financial service? A) Service related to listing on stock exchange. B) Arrangement of raw materials. C) Managerial and technical advice. D) Advice on IPO. Show Answer Correct Answer: C) Managerial and technical advice. 3. Which of the following is an example of an internal source of business finance?a) Issuing bondsb) Obtaining a government grantc) Selling company assetsd) Using retained earnings A) D. B) C. C) B. D) A. Show Answer Correct Answer: A) D. 4. Complete the following statements with appropriate word(s) in the blank spaces:3. Preference shares come under the ..... of business. A) Owners. B) Borrowed. C) All the above. D) None of the above. Show Answer Correct Answer: A) Owners. 5. Classify these main benefits and limitations as belonging to either debt finance or equity financeInterest must be paid even when losses are made; the amount raised has to be repaid; and it increases risk A) Benefits of debt financing. B) Limitations of debt financing. C) Benefits of equity financing. D) Limitations of equity financing. Show Answer Correct Answer: B) Limitations of debt financing. 6. What do Angel Investors and Crowdfunders have in common? A) They require something in return for their investment. B) They charge interest on money invested in the buisness. C) They become part-owners of the business. D) They are incredibly wealthy. Show Answer Correct Answer: A) They require something in return for their investment. 7. ADRs are issued in A) Canada. B) China. C) India. D) USA. Show Answer Correct Answer: D) USA. 8. Which of the following is a short-term source of finance? A) Commercial paper. B) Public deposits. C) Lease financing. D) Equity shares. Show Answer Correct Answer: A) Commercial paper. 9. What are retained profits? A) Debts owed by a company to its creditors. B) The amount of money a company has spent on marketing. C) The total revenue of a company in a given period. D) Accumulated profits of a company that have not been distributed to shareholders. Show Answer Correct Answer: D) Accumulated profits of a company that have not been distributed to shareholders. 10. Whataretheownersofprivateandpubliclimitedcompaniescalled? A) Stakeholders. B) Managers. C) Board of directors. D) Shareholders. Show Answer Correct Answer: D) Shareholders. 11. Which of these facts about venture capitalists is NOT true? A) Venture capitalists tend to operate in fairly risky markets. B) Venture capitalists would be paid a share of the profits. C) Venture capitalists usually provide money only and have no interest in running the business. D) Venture capitalists usually invest large sums of money. Show Answer Correct Answer: C) Venture capitalists usually provide money only and have no interest in running the business. 12. Industrial Finance Corporation of India (IFCI) was established in A) July, 1948. B) July, 1950. C) July, 2000. D) July, 1999. Show Answer Correct Answer: A) July, 1948. 13. What is equity financing? A) Equity financing is a method of funding a company through government grants. B) Equity financing is a method of raising capital by taking out a loan. C) Equity financing is a method of borrowing money from a bank. D) Equity financing is a method of raising capital for a company by selling shares of ownership to investors. Show Answer Correct Answer: D) Equity financing is a method of raising capital for a company by selling shares of ownership to investors. 14. Which capital is known as risk capital? A) Preference share capital. B) Equity share capital. C) All the above. D) None of the above. Show Answer Correct Answer: B) Equity share capital. 15. What do venture capitalists usually expect in return for investment? A) A guaranteed refund. B) No involvement in the business. C) A share of profits and influence. D) Total ownership of the business. Show Answer Correct Answer: C) A share of profits and influence. 16. 10 A flower seller plans to increase inventories of plants before a major festival. Which of the following is the most likely source of finance? 1) Bank overdraft 2) Leasing 3) Share issue 4) Debentures A) . B) . C) . D) . Show Answer Correct Answer: A) . 17. Which source of finance is exclusively available to limited companies? A) Bank loans. B) Trade credit. C) Crowdfunding. D) Share issues. Show Answer Correct Answer: D) Share issues. 18. Funds required for purchasing current assets is an example of A) Fixed capital requirement. B) Ploughing back of profit. C) Working capital requirement. D) Lease financing. Show Answer Correct Answer: C) Working capital requirement. 19. This type of finance does not need to be repaid. A) Bank Loan. B) Overdraft. C) Mortgage. D) Government Grant. Show Answer Correct Answer: D) Government Grant. 20. Which is an advantage of crowdfunding? A) It guarantees funding. B) It acts as market research. C) It requires no public interest. D) It involves no time pressure. Show Answer Correct Answer: B) It acts as market research. 21. Retained earnings are also known as ..... A) Capital. B) Ploughing back of profits. C) Surplus profit. D) Gross profit. Show Answer Correct Answer: B) Ploughing back of profits. 22. Which of the following is the factor afffecting the choice of the source of funds A) Coats. B) Form of organisation. C) Both of the Above. D) None of the Above. Show Answer Correct Answer: C) Both of the Above. 23. The funds which are required to purchase land, building and furniture comes under: A) Fixed capital requirement. B) Working capital requirement. C) Further capital requirement. D) Finance capital requirement. Show Answer Correct Answer: A) Fixed capital requirement. 24. A rights issue involves the sale of of what? A) New shares on the stock market. B) Fixed Assets. C) New shares to existing shareholders. D) Part of the business. Show Answer Correct Answer: C) New shares to existing shareholders. 25. Who among the following is called the owner of the company? A) Debenture holders. B) Employees. C) Directors. D) Equity Shareholders. Show Answer Correct Answer: D) Equity Shareholders. 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