This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 13 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 13 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not a feasible source of finance for an ordinary partnership? A) Bank loans. B) Sale and leaseback. C) Debt factoring. D) Initial public offering. Show Answer Correct Answer: D) Initial public offering. 2. Which of the following is a long-term source of finance? A) Trade credit. B) Commercial paper. C) Debentures. D) Bank overdraft. Show Answer Correct Answer: C) Debentures. 3. Which of the following is an advantage of equity financing? A) It never has to be repaid. B) It does not change the ownership of the business. C) Interest rates are very low. D) Finance can be raised very quickly. Show Answer Correct Answer: A) It never has to be repaid. 4. Which is an example of a fixed business cost? A) Raw materials. B) Interest Payments. C) Packaging. D) Wages to production workers. Show Answer Correct Answer: B) Interest Payments. 5. Contribution (in Break even analysis) is calculated as Selling price-variable cost per unit A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 6. Long term finance is usually repaid A) 1 to 5 years. B) 6 months to 1 year. C) 5+ years. D) 1 to 3 years. Show Answer Correct Answer: C) 5+ years. 7. ..... Issued to general public with a preferential right to fixed rate of return payable as dividend and repayment of capital at the end of specified period or liquidation whichever is earlier A) Preference shares. B) Debenture. C) Equity shares. D) Inter-corporate deposits. Show Answer Correct Answer: A) Preference shares. 8. What is retained earnings? A) Funds borrowed from banks. B) Profits reinvested in the business. C) Funds raised through issuing shares. D) Trade credit extended by suppliers. Show Answer Correct Answer: B) Profits reinvested in the business. 9. A portion of the net earnings may be retained in the business for use in the future. It is a source of: A) Selffinancing. B) Publci financing. C) Retained financing. D) External financing. Show Answer Correct Answer: A) Selffinancing. 10. Five sources of external finance for business are A) Issuing sharesbank loanssale of debenturesfactoring debtsgrants or subsidies. B) Microfinancebank loans government bondsinvestorsretained earnings. C) Crowdfundingmicrofinancebank loansissuing sharessale proceeds of a business building. D) Savings from laying off staffbank loanscrowdfundingprofits and retrained earningsowner's investment. Show Answer Correct Answer: A) Issuing sharesbank loanssale of debenturesfactoring debtsgrants or subsidies. 11. What is an advantage of a loan from friends and family? A) No interest will need to be paid. B) Arguments of the money could occur. C) All the above. D) None of the above. Show Answer Correct Answer: A) No interest will need to be paid. 12. The financial needs of a business can be categorised into ..... categories. A) 4. B) 2. C) 6. D) 3. Show Answer Correct Answer: B) 2. 13. What is capital expenditure? A) Money spent for fixed assets which last about 6 months. B) Money spent for fixed assets which last about for more than a year. C) Money spent on a day-to-day basis. D) Money spent per hour rate. Show Answer Correct Answer: B) Money spent for fixed assets which last about for more than a year. 14. A sole trader wants to increase the stock of products in his shop. The best source of finance is likely to be: A) A long term bank loan. B) Trade credit. C) Debentures. D) Mortgage. Show Answer Correct Answer: B) Trade credit. 15. What are ' Development banks ' also know as? A) Custodian. B) Commercial Banks. C) Depository. D) Financial instituions. Show Answer Correct Answer: D) Financial instituions. 16. Which of the following is an internal source of finance? A) Trade credit. B) Debentures. C) Retained earnings. D) Bank loan. Show Answer Correct Answer: C) Retained earnings. 17. What is the main use of short term finance? A) Shorten amount of time customers have to pay. B) Buy capital/fund expansion. C) Cash flow/meet day to day running costs. D) Reduce stock held. Show Answer Correct Answer: C) Cash flow/meet day to day running costs. 18. Refers to the funds raised through loans A) External sources. B) Equity shares. C) Debentures. D) Borrowed funds. Show Answer Correct Answer: D) Borrowed funds. 19. Full form of ICICI A) International Credit and Investment Corporation of India. B) Indian Credit and Investment Corporation of India. C) Industrial Credit and Investment Corporation of India. D) None of these. Show Answer Correct Answer: C) Industrial Credit and Investment Corporation of India. 20. A company wants to raise money by issuing new shares to investors. What is this method called? A) Overdraft. B) Share capital. C) Leasing. D) Grant. Show Answer Correct Answer: B) Share capital. 21. Financial Market that deals with short term securities is called A) Capital Market. B) Money Market. C) Secondary Market. D) Stock Market. Show Answer Correct Answer: B) Money Market. 22. Which of the following is not a limitation of equity share as a source of finance? A) Fluctuating returns. B) Costly source. C) Dilutes the voting power. D) No explicit cost. Show Answer Correct Answer: D) No explicit cost. 23. Cash and profit are different because ..... A) Some goods are sold on credit. B) Owners put more money into their business. C) The opening balance at the start of the year is zero. D) Companies might buy fixed assets. Show Answer Correct Answer: C) The opening balance at the start of the year is zero. 24. Is funds, in the form of a mix of share and loan capital, advanced to businesses thought to be relatively high risk. A) Bank Loan. B) Overdraft. C) Venture Capital. D) Government Grant. E) Creditors. Show Answer Correct Answer: C) Venture Capital. 25. 11 Which of the following sources of finance is most likely to be used by a company planning to take over another business? 1) Bank overdraft 2) Leasing 3) Share issue 4) Trade credit A) . B) . C) . D) . Show Answer Correct Answer: A) . ← 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