This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 24 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 24 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which capital is used for buying current assets? A) Fixed capital. B) Working capital. C) Both. D) None of thes. Show Answer Correct Answer: B) Working capital. 2. Which of the following is a reason why a new business start-up would need finance? A) To fund expansion. B) To pay for replacement equipment. C) To carry out maintenance on a new piece of machinery. D) To pay a deposit for a premises. Show Answer Correct Answer: D) To pay a deposit for a premises. 3. What is the name of the type of capital which is obtained by people buying a part of a company? A) Share Capital. B) Spare Capital. C) Owners' capital. D) None of the above. Show Answer Correct Answer: A) Share Capital. 4. Funds that are required to purchase fixed assets like land and building, plant and machinery, and furniture and fixtures is known as A) Fixed capital. B) Working capital. C) All the above. D) None of the above. Show Answer Correct Answer: A) Fixed capital. 5. Which affects the choice of finance source? A) Employee preferences. B) Market competition. C) Purpose of funding. D) Customer location. Show Answer Correct Answer: C) Purpose of funding. 6. Which of the following is a source of internal finance? A) Bank loans. B) Debentures. C) Retained earnings. D) Public deposits. Show Answer Correct Answer: C) Retained earnings. 7. Using Credit cards can be an expensive way or raising funds for a business. Why do you think this is? A) Credit cards provide free payment plan which affects the user in what they do with the money. B) Credit cards have very high interest (Riba) rates which always go up if payment is not made. C) Credit cards are not easy to get, and can easily be used to pay for anything online or in a shop. D) None of the above. Show Answer Correct Answer: B) Credit cards have very high interest (Riba) rates which always go up if payment is not made. 8. 5 An advantage that an overdraft has over a bank loan is that:1) it has a fixed rate of interest 2) it is paid back over a fixed time period 3) no dividends have to be paid to shareholders as with a loan 4) the size of the overdraft can vary with the needs of the business A) . B) . C) . D) . Show Answer Correct Answer: A) . 9. Which of these is included in owners fund A) Debentures. B) Equity shre. C) Loan from sbi. D) Trade credit. Show Answer Correct Answer: B) Equity shre. 10. Internal sources of finance do not include A) Trade credit. B) Retained earnings. C) Better management of working capital. D) Ordinary shares. Show Answer Correct Answer: A) Trade credit. 11. An increase in fixed costs will do which of the following A) Shift the break even point to the left. B) Make the total cost function steeper. C) Shift the breakeven point to the right. D) Make the total cost function flatter. Show Answer Correct Answer: D) Make the total cost function flatter. 12. What is sale and leaseback? A) Selling inventory at a discount. B) Selling assets and leasing them back. C) Short-term loan arrangement. D) Trading shares. Show Answer Correct Answer: B) Selling assets and leasing them back. 13. What is an advantage of trade credit? A) Long-term financing option. B) Provides ownership rights. C) No interest payments required. D) Immediate cash availability. Show Answer Correct Answer: C) No interest payments required. 14. Which production method involves employees being organised into multiskilled teams, each responsible for a particular part of the process? A) Cell production. B) Batch production. C) Flow production. D) Job production. Show Answer Correct Answer: A) Cell production. 15. Working capital is sometimes called as ..... A) Life of money. B) Life of blood. C) Life of soul. D) Life of human. Show Answer Correct Answer: B) Life of blood. 16. A part of the total profit kept undistributed for the purpose of meeting future contingencies is termed as A) Equity Share. B) Preference Share. C) Debenture. D) Retained Earnings. Show Answer Correct Answer: D) Retained Earnings. 17. What is the cost of producing one unit called? A) Average cost. B) Gross profit. C) Sales revenue. D) Budget. Show Answer Correct Answer: A) Average cost. 18. What are some examples of equity financing? A) Crowdfunding, angel investments, and debt financing. B) Stock options, mergers and acquisitions, and bank loans. C) Grants, personal savings, and trade credit. D) IPOs, venture capital investments, and private equity investments. Show Answer Correct Answer: D) IPOs, venture capital investments, and private equity investments. 19. Refers to the purchase of items such as fuel and raw materials that will be used up within a short space of time. A) Capital Expenditure. B) Revenue Expenditure. C) Statement of Financial Position (used to be called Balance Sheet). D) Income Statement. Show Answer Correct Answer: B) Revenue Expenditure. 20. Which type of share guarantees a fixed dividend to the shareholders? A) Equity shares. B) Preference shares. C) Debentures. D) Public deposits. Show Answer Correct Answer: B) Preference shares. 21. Which of the following is not true in the context of owner's fund? A) It remains permanent invested. B) It carries risk of business. C) It does not require any asset as security. D) The rate of interest is fixed on funds. Show Answer Correct Answer: D) The rate of interest is fixed on funds. 22. Classify these main benefits and limitations as belonging to either debt finance or equity financeThe amount raised does not have to be repaid; if losses are made then dividends do not have to be paid; and there is no ongoing cost A) Benefits of debt financing. B) Limitations of debt financing. C) Benefits of equity financing. D) Limitations of equity financing. Show Answer Correct Answer: C) Benefits of equity financing. 23. What are the advantages of internal sources of business finance? A) Higher cost, limited control, and inflexibility in decision-making. B) Limited availability, higher cost, and lack of control. C) Lower cost, greater control, and flexibility in decision-making. D) Higher cost, limited availability, and lack of flexibility. Show Answer Correct Answer: C) Lower cost, greater control, and flexibility in decision-making. 24. Find out the method of factoring A) Resource. B) Non-resource. C) Recourse. D) All the above. Show Answer Correct Answer: C) Recourse. 25. Which capital is used for buying of current assets? A) Fixed capital. B) Working capital. C) Both of the above. D) None of the above. Show Answer Correct Answer: B) Working 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