This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 2 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the predicted flow of cash into and out of a business over a period of time known as? A) Cash-flow forecasts. B) Historical budgeting. C) Adverse variance. D) Operating profit. Show Answer Correct Answer: A) Cash-flow forecasts. 2. What is short-term financing? A) Borrowing money for a short period of time to meet immediate financial needs. B) Investing money for a long period of time to meet future financial needs. C) Using personal savings to cover immediate financial needs. D) Receiving a grant from the government to fund a business venture. Show Answer Correct Answer: A) Borrowing money for a short period of time to meet immediate financial needs. 3. What is the most likely source of finance for a small firm? A) A debenture. B) Issuing shares. C) A bank loan. D) None of the above. Show Answer Correct Answer: C) A bank loan. 4. Which of the following constitutes of source for medium term finance A) Borrowings from commercial banks. B) Preference shares. C) Retained earnings. D) All of the above. Show Answer Correct Answer: A) Borrowings from commercial banks. 5. A long-term external source of finance usually at a fixed rate of interest A) Debt factoring. B) Mortgage. C) Debenture. D) None of the above. Show Answer Correct Answer: C) Debenture. 6. The initial capital contributed by the entrepreneur is suffiecient to take care of all financial requirements of the business. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 7. How do financial institutions make most of their money? A) Fees. B) Interest. C) Mutual Funds. D) Loan Payments. Show Answer Correct Answer: B) Interest. 8. What are the sources of Capital? A) Internal and External. B) Debt Financing and Equity Financing. C) Asset and Liabilities. D) Liabilities and Equity. Show Answer Correct Answer: A) Internal and External. 9. The IDBI was established in Factoring A) Factoring. B) Forfaiting. C) Both a & b. D) None. Show Answer Correct Answer: A) Factoring. 10. What is the primary risk associated with borrowed funds? A) High operational costs. B) Interest payments must be made regardless of profit. C) No control over business. D) Dilution of ownership. Show Answer Correct Answer: B) Interest payments must be made regardless of profit. 11. Short term sources of finance are paid back within ..... A) Six months. B) One year. C) Two years. D) Five years. Show Answer Correct Answer: B) One year. 12. Debt Factoring is: A) Selling invoices to a factoring company. B) Factoring the amount of debt you have into your business plan. C) Writing off the debt that a business owe you. D) Making plans for the future of the business. Show Answer Correct Answer: A) Selling invoices to a factoring company. 13. To which of the following businesses might a supplier be reluctant to issue trade credit? A) A new business start-up. B) A successful franchise. C) An established and thriving partnership. D) A highly profitable and reputable private limited company. Show Answer Correct Answer: A) A new business start-up. 14. Overdrafts, Bank Loans, Mortgages, Debentures, Venture Capital, Share or Equity Capital, Crowdfunding, Government Grants and Loans A) Internal sources of finance. B) External sources of finance. C) All the above. D) None of the above. Show Answer Correct Answer: B) External sources of finance. 15. Which one of the following is NOT a limitation of raising funds through debentures? A) No dilution of control. B) Charge on assets. C) Fixed obligation. D) All of these. Show Answer Correct Answer: A) No dilution of control. 16. In which would you normally own an asset at the end? A) Leasing. B) Hire Purchase. C) All the above. D) None of the above. Show Answer Correct Answer: B) Hire Purchase. 17. What is ONE method of controlling current liabilities? A) Selling accounts receivable at a discount. B) Having a tight policy on allowing trade credit. C) Making interest and loan repayments on time. D) Offering discounts for cash and early payment. Show Answer Correct Answer: C) Making interest and loan repayments on time. 18. What is an advantage of owners' funds? A) There will be little or no interest. B) You can pay in smaller installments. C) They take a long time to arrange. D) You don't have to pay it back. Show Answer Correct Answer: D) You don't have to pay it back. 19. An established seasonal partnership is experiencing cash flow problems during the winter months. Which of the following would be a suitable source of finance to overcome this problem? A) Share capital. B) Venture capital. C) Overdraft. D) Crowdfunding. Show Answer Correct Answer: C) Overdraft. 20. Preference shares and debentures comes under the category of: A) Short term funds. B) External source of funds. C) Long term funds. D) Both external source of funds & long term funds.s. Show Answer Correct Answer: D) Both external source of funds & long term funds.s. 21. Debentures represent A) Guardian of the company. B) Loan capital of a company. C) Fixed capital of a company. D) Owners of the company. Show Answer Correct Answer: B) Loan capital of a company. 22. A debenture A) Receives dividend payments. B) Is a long-term loan. C) Does not require security. D) Is a short-term loan. Show Answer Correct Answer: B) Is a long-term loan. 23. Which of the following is considered an external source of business finance? A) Venture capital. B) Loans from banks or financial institutions. C) Crowdfunding. D) Personal savings. Show Answer Correct Answer: B) Loans from banks or financial institutions. 24. A flower seller plans to increase stocks of plants. Which is the most likely source of finance? A) Bank overdraft. B) Leasing. C) Share issue. D) Debentures. Show Answer Correct Answer: A) Bank overdraft. 25. What is the primary source of business finance from a bank called? A) Credit card. B) Savings account. C) Stock investment. D) Loan. Show Answer Correct Answer: D) Loan. ← PreviousNext →Related QuizzesClass 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 1Class 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 10Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books