This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 22 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Debentures represents A) Fixed capital of the company. B) Permanent capital of the company. C) Fluctuating capital of the company. D) Loan capital of the Company. Show Answer Correct Answer: D) Loan capital of the Company. 2. Which sahre have prefential right in the payment of annual dividend A) Equity share. B) Preference share. C) Right share. D) All of the above. Show Answer Correct Answer: B) Preference share. 3. Examples of owner's fund include equity and preference share capitals and retained earnings. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 4. Complete the following statements with appropriate word(s) in the blank spaces:4. The providers of ..... fund have control over the management of business. A) Owners. B) Borrowed. C) All the above. D) None of the above. Show Answer Correct Answer: A) Owners. 5. Which of the following is a type of short-term external source of funds? A) Leasing. B) Overdraft. C) Mortgages. D) Debentures. Show Answer Correct Answer: B) Overdraft. 6. What is the main disadvantage of long-term bank loan as a source of finance? A) The business can overdraw their accounts to a greater value than the balance in the account. B) The business can benefit from the asset without purchasing it. C) The business can meet its short-term liabilities by writing cheques to the extent of limit allowed. D) The business has to pay an interest on the borrowing. Show Answer Correct Answer: D) The business has to pay an interest on the borrowing. 7. Excess of current assets and current liabilities is termed as A) Fixed Capital. B) Gross Working Capital. C) Net Working Capital. D) Both (a) and (b). Show Answer Correct Answer: C) Net Working Capital. 8. Complete the following statements with appropriate word(s) in the blank spaces:9. Under ..... a company borrows money from the public for a definite period at a pre-decided rate. A) Trade Credit. B) Public Deposits. C) All the above. D) None of the above. Show Answer Correct Answer: B) Public Deposits. 9. Into how many broad categories sources of finance be categorised? A) 2. B) 3. C) 4. D) 6. Show Answer Correct Answer: B) 3. 10. Which external source of business finance involves obtaining funds from individuals or institutions in exchange for a promise to repay the amount borrowed, along with interest, at a specified date in the future? A) Equity financing. B) Venture capital. C) Crowdfunding. D) Debt financing. Show Answer Correct Answer: D) Debt financing. 11. Is any item owned by a business that can generate an income for the enterprise. A) Capital. B) Share Capital. C) Loan Capital. D) Asset. E) Non-current Asset. Show Answer Correct Answer: D) Asset. 12. One of the responsibilities of a financial manager is to find additional sources of funds. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 13. Preference shares are referred as hybrid security because they have features of both ..... & ..... A) Equity shares, debentures. B) Retained earnings, debentures. C) Equity shares, public deposit. D) Retained earnings, equity shares. Show Answer Correct Answer: A) Equity shares, debentures. 14. What is an advantage of internal finance? A) Always available in large amounts. B) No external control issues. C) Guaranteed approval. D) Fixed interest rates. Show Answer Correct Answer: B) No external control issues. 15. The cost of ingredients used to make cakes for a bakery would be a ..... A) Start Up Cost. B) Baking Cost. C) Running Cost. D) Fixed Cost. Show Answer Correct Answer: C) Running Cost. 16. What is the merit of retained earning? A) Permanent source of funds. B) Continuous source of funds. C) Brother in laws funds. D) None of the above. Show Answer Correct Answer: A) Permanent source of funds. 17. Assertion:Borrowed fund holders have a legal right to get fixed return on their investment.Reason:They have the complete control over companies affairs. A) Both assertion (A) and reason(R) are true and reason(R) is the correct explanation of assertion. B) Both Assertion (A) and Reason (R) is not the correct explanation of assertion (A). C) Assertion (A) is true but reason (R) is false. D) Assertion (A) is false but reason (R) is true. Show Answer Correct Answer: C) Assertion (A) is true but reason (R) is false. 18. Shares which have a fixed rate of return but have the option of participating in profits. A) Debentures. B) Equity share. C) Participating preference share. D) Convertible preference share. Show Answer Correct Answer: C) Participating preference share. 19. What are the disadvantages of equity financing? A) Higher interest rates, limited access to funds, increased debt burden. B) Difficulty in attracting investors, limited flexibility in decision-making, potential legal issues. C) Loss of control, sharing of profits, potential conflicts with investors, and dilution of ownership. D) Decreased profitability, limited growth opportunities, increased financial risk. Show Answer Correct Answer: C) Loss of control, sharing of profits, potential conflicts with investors, and dilution of ownership. 20. Which is a disadvantage of loan? A) It can be repaid over a long period of time. B) Interest has to be paid in addition to loan amount. C) It can be arranged quickly. D) None of the above. Show Answer Correct Answer: B) Interest has to be paid in addition to loan amount. 21. Preference shares have some characteristics of both ..... And debentures A) Equity shares. B) Prefrence shareholders. C) Debentureholder. D) None of these. Show Answer Correct Answer: A) Equity shares. 22. The most dependable source of fund is? A) Equity shares. B) Preference shares. C) Debentures. D) Reatined Earnings. Show Answer Correct Answer: D) Reatined Earnings. 23. A business organisation that is similar to a sole proprietorship but has two or more owners is called a: A) Limited liability company. B) Corporation. C) Dual company. D) Partnership. Show Answer Correct Answer: D) Partnership. 24. Which of the following is a drawback to a business that issues debentures A) Lenders do not have any voting rights. B) There is dilution of control. C) There is a dilution of ownership. D) The value of liabilities increases. Show Answer Correct Answer: D) The value of liabilities increases. 25. The amount of finance or funds required for the purpose of procuring fixed assets and in long term projects is termed as A) Fixed Capital. B) Working Capital. C) Retained Earnings. D) None of the above. Show Answer Correct Answer: A) Fixed Capital. ← 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