This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 26 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 26 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Is a sum of money given to entrepreneurs or businesses for a specific purpose. A) Bank Loan. B) Overdraft. C) Venture Capital. D) Government Grant. E) Creditors. Show Answer Correct Answer: D) Government Grant. 2. IDRs are issued in A) Canada. B) China. C) America. D) India. Show Answer Correct Answer: D) India. 3. What are the disadvantages of debt financing? A) Interest payments, limited financial flexibility, legal consequences. B) Higher interest rates, decreased credit rating, increased financial risk. C) All the above. D) None of the above. Show Answer Correct Answer: A) Interest payments, limited financial flexibility, legal consequences. 4. Which one of the following sources of funds is convertible into equity shares? A) Loans from commercial banks. B) Inter corporate deposits. C) Debentures. D) Bonds. Show Answer Correct Answer: C) Debentures. 5. What is a smallest unit in which the total capital of the company is divided? A) Money. B) Capital. C) Booty. D) Share. Show Answer Correct Answer: D) Share. 6. Business finance? A) A.business activity which is concerned with the acquisition & conversation of capital funds in meeting the financial needs & overall. B) B.Advantages of Short term FinanceMaintain uninterrupted flow of productionc,. C) C.non of them. D) None of the above. Show Answer Correct Answer: A) A.business activity which is concerned with the acquisition & conversation of capital funds in meeting the financial needs & overall. 7. What is a feature of bank overdrafts? A) Fixed interest rates. B) Flexible borrowing amounts. C) Long-term financing. D) No interest charges. Show Answer Correct Answer: B) Flexible borrowing amounts. 8. What is the main advantage of leasing as a source of finance? A) The maintenance of the asset is done by the leasing firm. B) The business can overdraw their accounts to a greater value than the balance in the account. C) The total cost of leasing may end up higher than the purchasing of asset. D) The business can benefit from the asset without purchasing it. Show Answer Correct Answer: A) The maintenance of the asset is done by the leasing firm. 9. What are the main sources of equity financing? A) Venture capital, angel investors, IPOs, and private placements. B) Stock options, mergers and acquisitions, debt financing. C) Grants, government subsidies, personal loans. D) Bank loans, personal savings, crowdfunding. Show Answer Correct Answer: A) Venture capital, angel investors, IPOs, and private placements. 10. Which of the following best describes working capital? A) Capital needed for capital expenditure. B) Capital needed to start a business. C) Capital spent on wages. D) Capital needed for day to day expenditure. Show Answer Correct Answer: D) Capital needed for day to day expenditure. 11. Which external source of business finance involves obtaining funds from investors in exchange for equity in the company? A) Debt financing. B) Savings account. C) Venture capital. D) Equity financing. Show Answer Correct Answer: D) Equity financing. 12. What does debenture holders get in return of their debt in comapny A) Dividend. B) Interest. C) Profit. D) Loss. Show Answer Correct Answer: B) Interest. 13. What is the advantage of retained earnings as a source of long-term finance? A) Involves no cost of borrowing. B) Easy to obtain. C) Low risk to shareholders. D) Provides ownership to debenture holders. Show Answer Correct Answer: A) Involves no cost of borrowing. 14. Which source of finance below would best be described as loan capital? A) Ordinary share capital. B) Equity finance. C) Debt factoring. D) Debentures. Show Answer Correct Answer: D) Debentures. 15. Limited companies sometimes need large amounts of capital in order to expand their businesses. Which of the following is most likely a disadvantage of issuing new shares? A) You have to share profits (dividends) with shareholders. B) New share issue can raise the profile of the business. C) Interest payments can reduce profits. D) Money has to be paid back. Show Answer Correct Answer: A) You have to share profits (dividends) with shareholders. 16. Which one of the following is the first global company who issue IDR in India? A) HDFC. B) HSBC. C) Reliance. D) Standard Chartered PLC. Show Answer Correct Answer: C) Reliance. 17. In a statement of comprehensive income, all of the calculations are subtractions? A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 18. What are the main responsibilities of shareholders? A) To receive payment as agreed. B) To receive interest payments as laid down in the loan or overdraft agreement. C) To attend the AGM and vote, e.g. on election of directors. D) To provide regular statements of amount owing and terms of repayment. Show Answer Correct Answer: C) To attend the AGM and vote, e.g. on election of directors. 19. Equity Capital is A) Money borrowed from external sources and must be repaid with interest. B) Money received by selling shares. C) All the above. D) None of the above. Show Answer Correct Answer: B) Money received by selling shares. 20. The ease with which an investment can be turned into cash is? A) Solvency. B) Exchange Rate. C) Risk. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 21. Which factor would make a bank more likely to lend money? A) Verbal business plans. B) No collateral available. C) Presenting a cash flow forecast. D) Hidden existing loans. Show Answer Correct Answer: C) Presenting a cash flow forecast. 22. Which source of business finance involves ownership dilution? A) Debt financing. B) Venture capital. C) Equity financing. D) Angel investing. Show Answer Correct Answer: C) Equity financing. 23. The main aim of the business finance is ..... A) To carry out their day to day operations smoothly. B) To organise more companies. C) To earn more profit. D) For an entertainment. Show Answer Correct Answer: A) To carry out their day to day operations smoothly. 24. 4 Which of the following is an example of external finance for a limited company? 1) Retained profits of the company 2) Selling shares 3) Sale of assets no longer used in the business 4) Selling off inventories A) . B) . C) . D) . Show Answer Correct Answer: A) . 25. Venture capitalist was originated in ..... A) INDIA. B) ENGLAND. C) AMERICA. D) JAPAN. Show Answer Correct Answer: C) AMERICA. ← 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