This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 27 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 27 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What are external sources of finance? A) Selling company assets. B) Bank loans, venture capital, issuing bonds. C) Personal savings. D) Government grants. Show Answer Correct Answer: B) Bank loans, venture capital, issuing bonds. 2. Which of these sources of finance would you use to start a business? A) Bank Loan. B) Money from Friends & Family. C) Overdraft and Credit Card. D) Savings. Show Answer Correct Answer: D) Savings. 3. What is the main purpose of financial planning for business activities? A) To ensure the availability of funds for business activities. B) To reduce the cost of production. C) To increase the number of employees. D) To expand the business to new locations. Show Answer Correct Answer: A) To ensure the availability of funds for business activities. 4. The long term source relate to the financial requirements of an enterprise for a period more than ..... years. A) One. B) Two. C) Five. D) Ten. Show Answer Correct Answer: C) Five. 5. ..... are generally available for short periods and its extension or renewal is uncertain and difficult A) Banks. B) Funds. C) All the above. D) None of the above. Show Answer Correct Answer: B) Funds. 6. ..... are equity linked debt securities that are to be converted into equity or depository receipts after a specific period. A) Foreign currency convertible bonds. B) American Depository Receipt. C) Foreign Depository Receipt. D) European Depository Receipt. Show Answer Correct Answer: A) Foreign currency convertible bonds. 7. Short-term assets and short-term liabilities are referred to as the firm's: A) Cash flow. B) Capital budget. C) Capital structure. D) Working capital. Show Answer Correct Answer: D) Working capital. 8. The holder of equity shares is sure of his return on investment. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 9. What is working capital primarily used for in a business? A) Purchasing fixed assets. B) Day-to-day running expenses. C) Long-term investments. D) Issuing debentures. Show Answer Correct Answer: B) Day-to-day running expenses. 10. True or false-crowdfunding is usually only used for new business start-ups/concepts and is therefore inappropriate for existing large, profitable businesses A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 11. State Industrial Development Corporations were established by ..... A) Ministry of Finance. B) Central Government. C) Different States. D) None of these. Show Answer Correct Answer: C) Different States. 12. What is the main use of medium/long term finance? A) Cash flow/meet day to day running costs. B) Buy capital/fund expansion. C) Shorten amount of time customers have to pay. D) Reduce stock held. Show Answer Correct Answer: B) Buy capital/fund expansion. 13. Which of the following best defines 'profit' in business terms? A) Is recorded straight away after sales. Total revenue-total costs. B) The ability to pay bills in cash when they fall due. C) Debts owed by a business to lenders and suppliers. D) A charge made by governments on activities, earnings and income. Show Answer Correct Answer: A) Is recorded straight away after sales. Total revenue-total costs. 14. ....represents the ownership capital of a company. A) Preference share. B) Equity share. C) Debentures. D) Bonds. Show Answer Correct Answer: B) Equity share. 15. Wealthy individuals who invest in high-potential businesses are ..... A) Banks. B) Angel Investors. C) Shareholders. D) Crowdfunders. Show Answer Correct Answer: B) Angel Investors. 16. Finance is needed under which of the following stage ..... in a business? A) Promotion. B) Incorporation. C) Expansion. D) All of the above. Show Answer Correct Answer: D) All of the above. 17. When using which of the following sources of finance would interest always need to be paid? A) Share capital. B) A loan from family and friends. C) Overdraft. D) Venture capital. Show Answer Correct Answer: C) Overdraft. 18. What is the term for long-term bonds issued by a company to raise funds? A) Equity shares. B) Term loans. C) Debentures. D) Retained earnings. Show Answer Correct Answer: C) Debentures. 19. Which of the following factors primarily affects the decision between issuing debentures and raising equity? A) Tax benefits. B) Market conditions. C) Ownership dilution. D) Liquidity position. Show Answer Correct Answer: C) Ownership dilution. 20. Which of the following sources of finance is likely to involve the highest cost for a business? A) Equity shares. B) Bank loans. C) Public deposits. D) Debentures. Show Answer Correct Answer: A) Equity shares. 21. Which is a disadvantage of crowdfunding? A) All ideas easily reach funding targets. B) It cannot be used by start-ups. C) Investors demand full control of the business. D) Only appealing ideas attract enough investment. Show Answer Correct Answer: D) Only appealing ideas attract enough investment. 22. What kind of instruments ADRs and GDRs are A) Shares. B) Debentures. C) All the above. D) None of the above. Show Answer Correct Answer: A) Shares. 23. The cost of which type of financing is generally the lowest? A) Equity. B) Debt. C) Preference shares. D) Public deposits. Show Answer Correct Answer: B) Debt. 24. 6 An advantage that share capital (equity capital) has over long-term loans is that:1) the capital never has to be repaid 2) the rate of interest on shares is fixed 3) the balance of control in the business will change if more shares are issued 4) dividends are paid on long term loans but not on shares A) . B) . C) . D) . Show Answer Correct Answer: A) . 25. Which of which of the following is source of borrowed fund. A) Equity shares. B) Global depository receipt. C) Inter corporate deposits. D) Indian depository receipt. Show Answer Correct Answer: C) Inter corporate deposits. ← 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