This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 8 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Simple Interest A) A.The interest rate on bank loans frequently is quoated on APR. B) B.MAIN TYPES OF MONEY MARKET SECURITIES. C) C.NON OF THEM. D) None of the above. Show Answer Correct Answer: A) A.The interest rate on bank loans frequently is quoated on APR. 2. When using Hire Purchase, the business does not own the item ..... A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 3. A financial statement showing a business's sales revenue over a trading period and all the relevant costs incurred to generate that revenue. A) Capital Expenditure. B) Revenue Expenditure. C) Statement of Financial Position (used to be called Balance Sheet). D) Income Statement. Show Answer Correct Answer: D) Income Statement. 4. Businesses can use profits from the current trading year or profits of previous trading years as sources of finance. A) Retained Profit. B) Sale of Unwanted Assets. C) Sale and Leaseback. D) None of the above. Show Answer Correct Answer: A) Retained Profit. 5. The part of capital raised from owners of the company is known as: A) Retained Earnings. B) Bond. C) Share. D) Debenture. Show Answer Correct Answer: C) Share. 6. Why might a bank require collateral for a loan? A) To reduce the bank's level of risk. B) To increase the loan amount available. C) To stop the business from using retained profit. D) To guarantee shareholder approval. Show Answer Correct Answer: A) To reduce the bank's level of risk. 7. Classify each source of finance as either internal or externalSale of unwanted non-current assets A) Internal. B) External. C) All the above. D) None of the above. Show Answer Correct Answer: A) Internal. 8. What is an advantage of a bank loan? A) Businesses need meet a range of requirements before being accepted for the loan. B) Repayment burden. C) Requires a partial funding requirement. D) Has lower interest rates compared to credit cards. Show Answer Correct Answer: D) Has lower interest rates compared to credit cards. 9. Profit is important to businesses because: A) It improves businesses, cash balances. B) It can be used to measure business size. C) It is a measure of businesses, success. D) Businesses need to pay taxes to the government. Show Answer Correct Answer: C) It is a measure of businesses, success. 10. Business finance is needed to A) Establish a business. B) Run a business. C) Expand a business. D) All of the above. Show Answer Correct Answer: D) All of the above. 11. Which one of the following is not the feature of preference shares A) Provide fixed rate of return. B) Provide voting rights. C) Get preference over equity shares. D) Part of owner's capital. Show Answer Correct Answer: B) Provide voting rights. 12. The profit available for ploughing back depends on? A) Loans. B) Net banking, e-banking, bank transfer. C) Net profits, dividend policy, age of organization. D) Father in laws property. Show Answer Correct Answer: C) Net profits, dividend policy, age of organization. 13. Which is a key feature of debentures? A) Debentures represent ownership in a company. B) Debentures do not have a fixed interest rate. C) Debenture holders are creditors of the company. D) Debentures are only issued for less than one year. Show Answer Correct Answer: C) Debenture holders are creditors of the company. 14. What are the advantages of equity financing? A) Equity financing allows businesses to raise capital without incurring debt and provides access to a larger pool of funds. B) Equity financing increases the risk for the business as it involves sharing ownership and control. C) Equity financing is only available to large corporations and not to small businesses. D) Equity financing requires businesses to pay interest on the funds raised. Show Answer Correct Answer: A) Equity financing allows businesses to raise capital without incurring debt and provides access to a larger pool of funds. 15. Retain earnings does not involve any explicit cost in the form of A) Interest. B) Dividend. C) Floatation cost. D) All of the above. Show Answer Correct Answer: D) All of the above. 16. Whichtypeoflegalstructure isusedwhentwoormorepeoplejointogethertostarta business andhave unlimitedliability? A) Soletrader. B) Partnership. C) LTD. D) PLC. Show Answer Correct Answer: B) Partnership. 17. What is the importance of a business plan in raising external finance? A) It guarantees the success of a business. B) It provides evidence that the business managers have thought about and planned for the future. C) It increases the chances of avoiding failure. D) It forces the owners to think long and hard about the proposal. Show Answer Correct Answer: B) It provides evidence that the business managers have thought about and planned for the future. 18. What is the meaning of working capital? A) The finance needed for everyday expenses. B) The purchase of assets that are expected to last more than one year. C) The ability of a firm to be able to pay its short-term debts. D) The purchase of essential capital equipment for the business. Show Answer Correct Answer: A) The finance needed for everyday expenses. 19. Banks create money by taking in deposits, lending ..... , and charging ..... A) Interest, payments. B) Loans, interest. C) Payments, loans. D) Debt, loans. Show Answer Correct Answer: B) Loans, interest. 20. When a business's expenses are greater than the revenue, it is called ..... A) A cash reserve. B) A cash preserve. C) A net loss. D) A net storage. Show Answer Correct Answer: C) A net loss. 21. What type of finance involves less profit going to the owners? A) Retained profit. B) Sale of assets. C) Overdraft. D) Bank loan. Show Answer Correct Answer: A) Retained profit. 22. ..... can be issued only to American citizens and can be listed and traded on a stock exchange of USA. A) Indian Depository Receipt. B) Foreign Depository Receipt. C) American Depository Receipt. D) European Depository Receipt. Show Answer Correct Answer: C) American Depository Receipt. 23. It is the money raised from the business's own assets or from profits left in the business. A) Internal. B) External. C) Debt Financing. D) External Financing. Show Answer Correct Answer: A) Internal. 24. Which type of business would venture capitalists be usually interested in investing funds? A) An established private limited company. B) A small business with slow sales growth potential. C) A well-known franchise operation. D) An entrepreneurial start-up with the possibility of high profits. Show Answer Correct Answer: D) An entrepreneurial start-up with the possibility of high profits. 25. Investors who want steady income may not prefer ..... A) Debentures. B) Equity Shares. C) Bonds. D) None of these. Show Answer Correct Answer: B) Equity Shares. ← 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 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