MCQs For NCERT Class 11 Business Studies Chapter 8 Sources of Business Finance

Please refer to the MCQ Questions for Class 11 Business Studies Chapter 8 Sources of Business Finance with Answers. The following Sources of Business Finance Class 11 Business Studies MCQ Questions have been designed based on the latest syllabus and examination pattern for Class 11. Our experts have designed MCQ Questions for Class 11 Business Studies with Answers for all chapters in your NCERT Class 11 Business Studies book.

Sources of Business Finance Class 11 MCQ Questions with Answers

See below Sources of Business Finance Class 11 Business Studies MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question. Money obtained by issue of shares is known as ___________
(a) Debts
(b) Share Capital
(c) Loans
(d) Reserve Funds

Question. _________ is an example of short term finance
(a) Trade Credit
(b) Debenture
(c) Share
(d) None of the above

Question. Portion of net earnings retained in the business for future use:
(a) Retained earnings
(b) Savings
(c) Debentures
(d) Assets  

Question. Dividend is paid only on ________
(a) Loans
(b) Debentures
(c) Bonds
(d) Shares  

Question. Equity capital serves as permanent capital as it is repaid only at the time of_________:
(a) Liquidation
(b) Winding up
(c) Both of these
(d) None of the above

Question. Commercial papers comes under the category of:
(a) Owner’s fund
(b) Borrowed fund
(c) Long term funds
(d) Internal sources of funds

Question. A partner whose association with the firm is unknown to the general public is called
(a) Active partner
(b) Nominal partner
(c) Secret partner
(d) Sleeping partner

Question. A prospectus is issued by
(a) Public company
(b) Private company
(c) Statutory Corporation
(d) Departmental undertaking  

Question. Which of the following business enterprises does not have a separate legal entity?
(a) Sole Proprietorship
(b) Partnership
(c) Company
(d) Cooperative Society  

Question. _________ company does not invite the public to subscribe to its share capital.
(a) Both Private and Public Company
(b) Public Company
(c) Private Company
(d) None of the above  

Question. The liability of equity shareholders is:
(a) Unlimited
(b) Limited
(c) Partially unlimited
(d) Partially limited

Question. The funds which are required to purchase land, building and furniture comes under:
(a) Fixed capital requirement
(b) Working capital requirement
(c) Further capital requirement
(d) Finance capital requirement

Question. Proposed name of the company is declared void if:
(a) Is resembling to any existing company name
(b) Is resembling to any existing company logo
(c) Is resembling to any symbol of Indian Government or UNO
(d) None of these.  

Question. The term ‘redeemable’ is used for
(a) Public deposits
(b) Commercial paper
(c) Equity shares
(d) Preference shares

Question. Which of the following cooperative society is established to help small producers in selling their products?
(a) Producer cooperative society
(b) Marketing cooperative society
(c) Credit cooperative society
(d) Consumers cooperative society  

Question. A company cannot come into existence without
(a) Issuing prospectus
(b) Electing directors
(c) Certificate of incorporation
(d) All of the above

Question. ________not required to be refunded during the lifetime of the business:
(a) Owner’s fund
(b) Borrowed fund
(c) Both of these
(d) None of these

Question. Which of the following comes under medium-term funds
(a) Lease financing
(b) Public deposits
(c) Bank loans
(d) All of the above

Question. Capital required for purchasing raw material, payment of salaries, wages etc comes under the category of:
(a) Working capital requirement
(b) Fixed capital requirement
(c) Further capital requirement
(d) Finance capital requirement

Question. At which stage does the need for finance arises in business:
(a) For carrying out day to day operations
(b) During the purchase of assets
(c) As soon as an entrepreneur decides to start a business
(d) All of these  

Question. Which of the following forms of business enterprises suffer from a lack of public confidence because they are not required to publish their accounts legally?
(a) Partnership
(b) Cooperative Society
(c) Company
(d) None of the above

Question. Financial institutions aim at promoting the industrial development of a country, these are also called ?
(a) Children banks
(b) Development banks
(c) Rural banks
(d) urban banks

Question. Public deposits are the deposits that are raised directly from 
(a) The public
(b) The directors
(c) The auditors
(d) The owners

Question. External sources of capital are those that are :
(a) Generated through outsiders
(b) Generated through loans from commercial banks
(c) Generated through issue of shares
(d) Generated within the business

Question. Companies generally invite public deposits for a period upto: 
(a) 5years
(b) 4years
(c) 3years
(d) 10 years

Question. Preference shareholders are called :
(a) Partners of the company
(b) Owners of the company
(c) Executives of the company
(d) Guardians of the company

Fill in the Blanks:

Question. Bank Credit is not a _________ source of funds.

Question. Trade credit is used as a _________ source of finance.

Question. Short term funds are those which are required for a period not exceeding _________ year. 

 Question. Equity capital serves a permanent capital as it is to be repaid only at the time of_________ of the company. 

Question. The borrower is required to provide _________ before a loan is sanctioned by the bank. 

True / False:

Question. The medium term sources of funds fulfill the financial requirements of an enterprise for a period exceeding five years.

Question. The dividend paid to shareholders is deductible from profits as expense.

Question. The FCCB?s are issued in any foreign currency

Question. ADR?S are issued only to American citizens.

 Question. Equity shareholders are also called partners of the company.

Match the following:

Question. Match the following statements on the basis of concept of International financing:

SIDE A	SIDE B
1. It is an negotiable instrument and can be traded freely like any other security	(a) IDR
2. An Depository Receipt that is denoted in Indian rupees	(b) ADR
	(c) GDR

Question. Match the following organizations on the basis of their salient features:

SIDE A	SIDE B
1. Regulatory authority of Stock Exchange	(a) RBI
2. Regulatory authority of private and public banks	(b) SEBI
	(c) ICICI

Question. Match the following sources of finance on the basis of duration:

SIDE A	SIDE B
1. It fulfills the financial requirement of an business for the period exceeding 5 years.	(a) Short term finance
2. It fulfills the financial requirement of an business for the period not exceeding 5 years	(b) Long term finance
	(c) Medium term finance

Question. Match the following sources of finance on the basis of their nature:

SIDE A	SIDE B
1. Shares and Debentures	(a) Short term financing
2. Trade credit	(b) Medium term financing
	(c) Long term financing

Question. Match the following instruments on the basis of their issuance:

SIDE A	SIDE B
1. Can be issued to only American citizens	(a) IDR
2. Can be issued to only Indian citizens	(b) ADR
	(c) GDR

Pictorial Questions:

Question. Identify the source of finance on the basis of ownership provided by the institution
given in the picture?

Question. Identify the source of finance on the basis of generation?

Question. Identify the name of the organisation and source of finance traded by the organization shown in the given picture?

Question. Identify the international financial instrument that can be issued –traded in the given stock exchange?

Question. Write fullform of the abbreviation shown below along with its status ?