This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 5 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the role of venture capital financing in business? A) It involves obtaining funds from banks and financial institutions. B) It is used to meet short-term financial needs of a business. C) It is a method of raising capital by selling shares of a company to investors. D) It is a method of reducing company expenses. Show Answer Correct Answer: C) It is a method of raising capital by selling shares of a company to investors. 2. What are internal sources of business finance? A) Stock issuance, angel investors, and factoring. B) Retained earnings, sale of assets, and depreciation funds. C) Government grants, personal savings, and trade credit. D) Bank loans, venture capital, and crowdfunding. Show Answer Correct Answer: B) Retained earnings, sale of assets, and depreciation funds. 3. Funds raised through loans or borrowings are ..... A) Borrowed funds. B) Owners Equity. C) Share Capital. D) None of these. Show Answer Correct Answer: A) Borrowed funds. 4. Bills of exchange is an instrument of ..... A) ICD. B) Trade credit. C) Loan. D) None of these. Show Answer Correct Answer: B) Trade credit. 5. What are long-term funds? A) Funds borrowed for a short period. B) Funds raised for day-to-day operations. C) Funds raised for a period longer than one year. D) None of the above. Show Answer Correct Answer: C) Funds raised for a period longer than one year. 6. When the bank allows you to withdraw more money from your current account than you have in it, this is a A) Trade Creditor. B) Factoring Debt. C) Accrued Expense. D) Bank Overdraft. Show Answer Correct Answer: D) Bank Overdraft. 7. Which of the following is a disadvantage of equity shares as a source of long-term finance? A) High risk for shareholders. B) Involves interest payments. C) Dilutes ownership of the company. D) Must be repaid within a year. Show Answer Correct Answer: C) Dilutes ownership of the company. 8. Unit Trust of India was established by ..... A) ICICI. B) State Bank Group. C) Indian Government. D) HDFC Bank. Show Answer Correct Answer: C) Indian Government. 9. 1 Which of the following is not a reason why a business needs money? 1) To start the business 2) To expand the business 3) To deal with a negative cash-flow problem 4) To increase prices of its products A) . B) . C) . D) . Show Answer Correct Answer: A) . 10. Are items owned by a business that can be readily turned into cash. Examples include cash, money owed by customers and inventories. A) Working capital. B) Current assets. C) Current liabilities. D) None of the above. Show Answer Correct Answer: B) Current assets. 11. Classify these main benefits and limitations as belonging to either debt finance or equity financeDoes not affect ownership of the business; and lenders have no say in the running of the business. A) Benefits of debt financing. B) Limitations of debt financing. C) Benefits of equity financing. D) Limitations of equity financing. Show Answer Correct Answer: A) Benefits of debt financing. 12. Which type of financing is used to meet the short-term financial needs of a business? A) Long-term financing. B) Short-term financing. C) Personal savings. D) Venture capital. Show Answer Correct Answer: B) Short-term financing. 13. Which of the following is not a fixed capital requirement: A) Purchase of Machinery. B) Purchase of Machinery. C) Purchase of Raw Material. D) Purchase of Furniture. Show Answer Correct Answer: C) Purchase of Raw Material. 14. Which of the following is an advantage of retained profit as a source of finance? A) It's available to new businesses. B) It increases owner's share immediately. C) No interest payments required. D) It's quick to arrange. Show Answer Correct Answer: C) No interest payments required. 15. Who are known as residual owners A) Debentureholders. B) Equity shareholders. C) Preference shareholders. D) None of the above. Show Answer Correct Answer: B) Equity shareholders. 16. Which long-term funding option involves a company issuing shares to the public? A) Venture capital. B) Debentures. C) Initial Public Offering (IPO). D) Term loan. Show Answer Correct Answer: C) Initial Public Offering (IPO). 17. Which of the following is paid after tax: A) Salary. B) Interest. C) Dividend. D) Commission. Show Answer Correct Answer: C) Dividend. 18. Which of the following is NOT a source of borrowed funds? A) Retained earnings. B) Trade credit. C) Bank loans. D) Debentures. Show Answer Correct Answer: A) Retained earnings. 19. "The maximum amount of credit available to the business" best describes which common term of a credit agreement? A) Credit period. B) Credit limit. C) Credit amount. D) Credit frequency. Show Answer Correct Answer: B) Credit limit. 20. A business is likely to have sufficient working capital if the current ratio is between? A) 0 and 1. B) 1 and 2. C) 1.5 and 2. D) 2 and 3. Show Answer Correct Answer: C) 1.5 and 2. 21. He need for funds arises from the stage when an entrepreneur makes a decision to start a business. Some funds are needed immediately for the purchase of Plant and machinery, furniture, etc.Identify the category of financial needs of a business highlighted above. A) Fixed capital requirements. B) Working capital requirements. C) Initial capital requirements. D) Long-term capital requirements. Show Answer Correct Answer: A) Fixed capital requirements. 22. Fixed capital means the capital which is used in purchasing ..... ASSETS A) Current assets. B) Fixed assets. C) Material. D) All the above. Show Answer Correct Answer: B) Fixed assets. 23. ..... is granted to those customers who have reasonable amount of financial standing and goodwill. A) Trade credit. B) Reserves. C) Overdraft. D) None of these. Show Answer Correct Answer: A) Trade credit. 24. Classify each source of finance as either internal or externalShare issue A) Internal. B) External. C) All the above. D) None of the above. Show Answer Correct Answer: B) External. 25. ICD stands for A) Indian Company Deposit. B) Indian Corporate Deposit. C) Inter Corporate Deposit. D) Intra Corporate Deposit. Show Answer Correct Answer: C) Inter Corporate Deposit. ← 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 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