This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 17 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 17 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Trade Credit is a A) Short term source of finance. B) Long term source of finance. C) Medium term source of finance. D) None of the above. Show Answer Correct Answer: A) Short term source of finance. 2. What is a key disadvantage of debt factoring? A) It requires collateral. B) It takes too long to process. C) The factor takes a percentage of collected debts. D) Interest rates are too high. Show Answer Correct Answer: C) The factor takes a percentage of collected debts. 3. Which instrument saves tax? A) Equity shares. B) Debentures. C) Retained earnings. D) Preference shares. Show Answer Correct Answer: B) Debentures. 4. What are equity shareholders called? A) Owners of the company. B) Partners of the company. C) Executives of the company. D) Guardian of the company. Show Answer Correct Answer: A) Owners of the company. 5. Which statement is not related to lease financing A) Enables lessee to acquire the asset with a lower investment. B) Simple documentation makes it easier to finance assets. C) Lease rentals paid by the lessee are deductible for computing taxable profits. D) It promote the sales of an organization. Show Answer Correct Answer: D) It promote the sales of an organization. 6. A public limited company wants to take over a competitor. This will involve a large amount of finance. The best source of finance is likely to be: A) An overdraft. B) Debt factoring. C) Taking on a new partner. D) A share issue. Show Answer Correct Answer: D) A share issue. 7. What are external sources of business finance? A) Loans, investments, issuing shares or bonds. B) Government subsidies, tax incentives, sponsorships. C) Personal savings, credit cards, overdrafts. D) Grants, donations, crowdfunding. Show Answer Correct Answer: A) Loans, investments, issuing shares or bonds. 8. Which of the following types of security bears fix rate of return A) Equity shares and preference shares. B) Preference shares and debentures. C) Equity shares and debentures. D) None of the above. Show Answer Correct Answer: B) Preference shares and debentures. 9. A successful sole trader wants to raise funds to open a second restaurant and is eager to retain full control of the business. Which of the following sources of finance would be the most appropriate to fund this expansion? A) Issue new shares. B) Bank loan. C) Overdraft. D) Gain a partner. Show Answer Correct Answer: B) Bank loan. 10. 9 Which of the following business decisions is likely to need long-term finance? 1) Increasing inventories of goods for the summer season 2) Hiring a car for the sales manager 3) Building a new factory 4) Paying creditors for goods supplied A) . B) . C) . D) . Show Answer Correct Answer: A) . 11. An advantage of taking on a new partner is that: A) It reduces the risk of a takeover. B) It ensures the business will be able to get a loan. C) The partner will bring additional finance. D) The other partners will now have limited liability. Show Answer Correct Answer: C) The partner will bring additional finance. 12. Which of the following is a source of long-term finance? A) Trade credit. B) Equity shares. C) Short-term loans. D) Bank overdraft. Show Answer Correct Answer: B) Equity shares. 13. Which of the following financing options is most suitable for a seasonal business? A) Equity. B) Trade credit. C) Preference shares. D) Public deposits. Show Answer Correct Answer: B) Trade credit. 14. Which of the following is not a short-term source of finance? A) Trade credit. B) Commercial paper. C) Debentures. D) Bank overdraft. Show Answer Correct Answer: C) Debentures. 15. The problem of over trading is there in ..... A) Debentures. B) Trade Credit. C) Shares. D) Bank Loan. Show Answer Correct Answer: B) Trade Credit. 16. ..... is commonly used by business organizations as a source of short-term financing A) Lease financing. B) ADRs. C) Trade Credit. D) None of these. Show Answer Correct Answer: C) Trade Credit. 17. Debentures are considered a type of: A) Equity financing. B) Short-term financing. C) Long-term financing. D) Working capital financing. Show Answer Correct Answer: C) Long-term financing. 18. Who is responsible for overseeing financial planning, accounting, and financial risk management in an organization? A) CEO. B) CFO. C) CMO. D) COO. Show Answer Correct Answer: B) CFO. 19. Which of the following is the most suitable reason for using personal finance? A) Insufficient internal sources of finance. B) Insufficient external sources of finance. C) There is no interest obligation. D) To please the owners (shareholders) of a company. Show Answer Correct Answer: C) There is no interest obligation. 20. What are some examples of debt financing? A) Credit cards, personal loans, mortgages. B) Stocks, mutual funds, real estate. C) Bank loans, corporate bonds, lines of credit. D) Government grants, venture capital, angel investors. Show Answer Correct Answer: C) Bank loans, corporate bonds, lines of credit. 21. What is a hire purchase? A) Buying an item and paying in full. B) Not buying an item. C) Buying an item now and paying for it at a later date. D) None of the above. Show Answer Correct Answer: C) Buying an item now and paying for it at a later date. 22. What is the main advantage of factoring? A) It is a government scheme. B) It provides long-term financing. C) It helps in debt collection. D) It requires no documentation. Show Answer Correct Answer: C) It helps in debt collection. 23. What financial statement shows an organization's financial position at a specific point in time? A) Income Statement. B) Balance Sheet. C) Cash Flow Statement. D) Statement of Retained Earnings. Show Answer Correct Answer: B) Balance Sheet. 24. Which of the following comes under medium-term funds A) Lease financing. B) Public deposits. C) Bank loans. D) All of the above. Show Answer Correct Answer: D) All of the above. 25. A business can only receive investment through share capital in its first year of trade? A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. ← 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