This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 15 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An Internal source of finance is A) A type of funding received from other businesses and financial institutions. B) Finance which comes from a business's own resources. C) All the above. D) None of the above. Show Answer Correct Answer: B) Finance which comes from a business's own resources. 2. Which of the following is an example of equity financing?a) Bank loanb) Venture capitalc) Trade creditd) Retained earnings A) Bank loan. B) Trade credit. C) Retained earnings. D) Venture capital. Show Answer Correct Answer: D) Venture capital. 3. Which sort of finance no need to be repaid A) Leasing. B) Grants. C) Retained profit. D) Bank overdraft. Show Answer Correct Answer: B) Grants. 4. Why is the national minimum wage important in a business context? A) It prevents environmental damage. B) It is illegal to pay below this wage rate set by the government. C) It determines market structure. D) It protects consumers from unfair selling. Show Answer Correct Answer: B) It is illegal to pay below this wage rate set by the government. 5. Company has to pay only fixed rate of interest on the funds borrowed through issue of this source of business finance: A) Equity Share. B) Preference Share. C) Retained Earnings. D) Debentures. Show Answer Correct Answer: D) Debentures. 6. What is Finance? A) The study of science that deals with money. B) The management of revenues; the conduct or transaction of money matters. C) The art of recording, classifying and summarizing. D) None of the above. Show Answer Correct Answer: B) The management of revenues; the conduct or transaction of money matters. 7. Expand FCCB A) Foreign country convertible bonds. B) Foreign currency convertible bonds. C) Foreign currency convenient bonds. D) Flexibile currency convertible bonds. Show Answer Correct Answer: B) Foreign currency convertible bonds. 8. Which of the following is an example of using internal sources of finance to expand a business? A) Taking out a loan from a bank. B) Using retained earnings to fund expansion. C) Selling company stocks to raise capital. D) Borrowing money from friends and family. Show Answer Correct Answer: B) Using retained earnings to fund expansion. 9. Businesses might choose to use external sources of finance because A) There are no interest charges. B) Potential cash flow problems are avoided. C) There is insufficient retained profit. D) There is an expected rise in interest rates. Show Answer Correct Answer: C) There is insufficient retained profit. 10. Japan increased its tariff on U.S. made cars by 50%. The U.S. raised the tariffs on Japan's products such as cameras. Which of the following would result from the change in tariffs on cars and cameras? A) The standard of living would remain the same. B) The standard of living would decrease. C) The standard of living would be unpredictable. D) The standard of living would increase. Show Answer Correct Answer: B) The standard of living would decrease. 11. Retained earnings is also known as: A) Residual owners of the company. B) Loan capital of the company. C) Short term capital of the company. D) Ploughing back of profits. Show Answer Correct Answer: D) Ploughing back of profits. 12. Which long-term source of finance is most likely to slow down decision-making? A) Overdraft. B) Personal savings. C) Share capital. D) Trade credit. Show Answer Correct Answer: C) Share capital. 13. What is a disadvantage of issuing shares? A) Interest payments required. B) Short-term financing only. C) Ownership dilution possible. D) Immediate repayment needed. Show Answer Correct Answer: C) Ownership dilution possible. 14. Internal source of capital are those that are: A) Generated through issue of shares. B) Generated through outsiders such as suppliers. C) Generated through a loan from commercial banks. D) Generated within the business. Show Answer Correct Answer: D) Generated within the business. 15. Preference shares have preference rights over the equity shares as to A) Payment of dividend. B) Repayment of capital. C) Both (a) and (b). D) Voting for all matters. Show Answer Correct Answer: C) Both (a) and (b). 16. An amount of money that is paid back within an agreed amount of time, with interest A) Bank loan. B) Angel investment. C) Overdraft. D) Retained profit. Show Answer Correct Answer: A) Bank loan. 17. Public deposits are the deposits that are raised directly form: A) The public. B) The directors. C) The auditors. D) The owners. Show Answer Correct Answer: A) The public. 18. What source of finance will lead to the owners taking a smaller share of the profits? A) Bank loan. B) Taking on a new partner. C) Crowdfunding. D) Trade Credit. Show Answer Correct Answer: B) Taking on a new partner. 19. A firm should select capital structure that A) Produces the highest cost of capital. B) Maximise the value of the firm. C) Minimises taxes. D) Is fully unlevered. Show Answer Correct Answer: B) Maximise the value of the firm. 20. Money invested into the business by its owners in return for a dividend (portion of the profit) A) Share Capital. B) Grants. C) Debentures. D) Mortgage. Show Answer Correct Answer: A) Share Capital. 21. Moral Hazard A) A.when the transaction. B) B.After transaction occurs. C) C.non of them. D) None of the above. Show Answer Correct Answer: B) B.After transaction occurs. 22. Who among the following gets a priority over others in receiving a fixed rate of dividend out of the net profits of the company A) Equity shareholders. B) Preference shareholders. C) Debenture holders. D) None of the above. Show Answer Correct Answer: B) Preference shareholders. 23. Which of the following is a benefit to a private limited company of using retained profit to finance its growth? A) The business will not be required to pay dividends to its shareholders. B) The business will pay less tax on its profits. C) The amount will not need to be paid back. D) The amount available will always match fully the company's requirements. Show Answer Correct Answer: C) The amount will not need to be paid back. 24. Adverse Selection: A) B.Before transaction occurs. B) C.After transaction occurs. C) C. both of them. D) None of the above. Show Answer Correct Answer: A) B.Before transaction occurs. 25. The full form of ADR is A) American Dividend Receipts. B) American Depository Receipts. C) African Depository Receipts. D) None of the above. Show Answer Correct Answer: B) American Depository Receipts. ← 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