This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 11 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A portion of the net earnings may be retained in the business for use in the future is called A) Retained Earnings. B) Debentures. C) Equity shares. D) Preference shares. Show Answer Correct Answer: A) Retained Earnings. 2. A business that fails to pay back loans will have A) A good credit rating. B) A poor credit rating. C) All the above. D) None of the above. Show Answer Correct Answer: B) A poor credit rating. 3. Is the money invested into a business either by its owners or by organizations such as banks. A) Capital. B) Share Capital. C) Loan Capital. D) Asset. E) Non-current Asset. Show Answer Correct Answer: A) Capital. 4. Where do buyers and sellers trade financial instruments like stocks and bonds? A) Financial Institution. B) Financial Market. C) Financial Statement. D) Financial Plan. Show Answer Correct Answer: B) Financial Market. 5. When a business uses its own profits to finance its operations, it is an example of: A) Equity financing. B) Self-financing. C) External financing. D) Debt financing. Show Answer Correct Answer: B) Self-financing. 6. GDRs can be converted into shares ..... A) At any time. B) After 5 years. C) After 10 years. D) After one year. Show Answer Correct Answer: A) At any time. 7. Which of the following is not true of a debenture? A) Debenture holders get a fixed rate of return. B) They must be repaid on an agreed date. C) All businesses can have debenture holders. D) Debenture holders are creditors of the company. Show Answer Correct Answer: C) All businesses can have debenture holders. 8. Which of the following is a permanent source of finance for a company? A) Long-term bank loan. B) Share capital. C) Creditors. D) Overdraft. Show Answer Correct Answer: B) Share capital. 9. What is a bank loan? A) A one-off grant that does not require repayment. B) Money lent with fixed repayments over time. C) Money borrowed from customers. D) A type of share sold to investors. Show Answer Correct Answer: B) Money lent with fixed repayments over time. 10. ..... Is a financial instrument created by an Indian Depository to enable a foreign company to raise funds from the Indian securities market. A) Indian Depository Receipt. B) American Depository Receipt. C) Foreign Depository Receipt. D) European Depository Receipt. Show Answer Correct Answer: A) Indian Depository Receipt. 11. Which of the following sources of finance for a non-current asset would not result in a business owning said asset? A) Mortgage. B) Leasing. C) Hire purchase. D) Long-term bank loan. Show Answer Correct Answer: B) Leasing. 12. Which factor is NOT affecting the choice of source of finance A) Control. B) Risk profile. C) International capital markets. D) Purpose and time period. Show Answer Correct Answer: C) International capital markets. 13. Case study:the Business Incubator team 'TradeTools'-an online platform connecting neighbors who want to rent tools with neighbours that own them. They will pitch their business concept in May-what would be the most appropriate source of finance for this new, untested idea? A) Angel Investor. B) Bank loan. C) Personal savings. D) Credit cards. Show Answer Correct Answer: A) Angel Investor. 14. What does the acid test ratio measure? A) Current assets-Inventory/Current liabilities. B) Current assets/Current liabilities. C) Total assets-Total liabilities. D) Net profit/Sales revenue x100. Show Answer Correct Answer: A) Current assets-Inventory/Current liabilities. 15. When a business is allowed to spend more than it holds inits current bank account up to an agreed limit. A) Bank Loan. B) Overdraft. C) Venture Capital. D) Government Grant. E) Creditors. Show Answer Correct Answer: B) Overdraft. 16. Which of the following is a feature of preference shares? A) They are repaid before debentures. B) They are riskier than equity shares. C) They provide fixed dividends. D) They have voting rights. Show Answer Correct Answer: C) They provide fixed dividends. 17. Which is a disadvantage of share capital? A) Shareholders cannot sell their shares. B) It reduces the risk of takeover. C) It dilutes founder control. D) Shareholders cannot vote. Show Answer Correct Answer: C) It dilutes founder control. 18. Retained earnings are profits that have not been paid to owners, which improve the business is called ..... A) Balance Sheet. B) Working Capital. C) Growth profit and EBIT. D) Profit and Loss Statement. Show Answer Correct Answer: B) Working Capital. 19. The term 'redeemable' is used for A) Preference shares. B) Commercial paper. C) Equity shares. D) Public deposits. Show Answer Correct Answer: A) Preference shares. 20. Name the investors who get priority over equity shareholders while paying dividend and repayment of capital A) Preference shareholders. B) Debentureholders. C) Retained earnings. D) Equity shareholders. Show Answer Correct Answer: A) Preference shareholders. 21. Which is a common disadvantage of overdrafts? A) Fixed interest rates. B) High interest charges. C) No repayment required. D) Loss of ownership. Show Answer Correct Answer: B) High interest charges. 22. Which of the following is a type of security that signifies ownership in a corporation? A) Bond. B) Stocks. C) Bank. D) Non-bank. Show Answer Correct Answer: B) Stocks. 23. How is 'profit for the year' or 'net profit' calculated? A) Operating profit-interest. B) Net profit/Sales revenue x100. C) Total assets-Total liabilities. D) Current assets-Inventory/Current liabilities. Show Answer Correct Answer: A) Operating profit-interest. 24. When a business cannot pay its debts it is said to be? A) Liquid. B) Insolvent. C) Overtrading. D) Overheating. Show Answer Correct Answer: B) Insolvent. 25. What source of finance could lead to an unwanted takeover of the business? A) Sale of assets. B) Owner's capital. C) Trade credit. D) Share issue. Show Answer Correct Answer: D) Share issue. ← PreviousNext →Related 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 8Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 9Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books