MCQ Questions For Class 11 Business Studies Chapter 8 Sources of Business Finance

Check the below NCERT MCQ Class 11 Business Studies Chapter 8 Sources of Business Finance with Answers available with PDF free download. MCQ Questions for Class 11 Business Studies  with Answers were prepared based on the latest syllabus and examination pattern issued by CBSE, NCERT and KVS. Our teachers have provided below Sources of Business Finance Class 11 Business Studies  MCQs Questions with answers which will help students to revise and get more marks in exams

Sources of Business Finance Class 11 Business Studies MCQs Questions with Answers

Refer below for MCQ Class 11 Business Studies Chapter 8 Sources of Business Finance with solutions. Solve questions and compare with the answers provided below.

Question. Borrowed funds include which of the following
(a) Retained earnings
(b) Trade credit
(c) Equity shares
(d) None of these

Question. Debentures represent     
(a) Fixed capital of the company
(b) Permanent capital of the company
(c) Fluctuating capital of the company
(d) Loan capital of the company

Question. The partnership deed generally includes the following
(a) Name of firm
(b) Nature of business
(c) Location of business
(d) All of the above

Question. The person holding share of a particular company is called as________of that company:
(a) Shareholder
(b) Debentureholders
(c) Debtors
(d) Creditors

Question. The life of sole proprietorship business is …………….
(a) Very short life
(b) Stable
(c) Long life
(d) Unstable

Question. Which of the following is included inowner’s fund :
(a) Capital
(b) Profits reinvested in business
(c) Retained earnings
(d) All of the above

Question. ________holders do not receive a fixed amount of dividend, whereas________holders receive a fixed amount dividend:
(a) Equity share; preference share
(b) Preference share; equity share
(c) Debenture; equity shares
(d) Preference shares; debenture

Question. Full form of GDR is:
(a) Global Decomposite Receipt
(b) Global Depository Repayment
(c) Global Direct Receipt
(d) Global Depository Receipt

Question. Unit Trust of India was established by
(a) ICICI
(b) State Bank Group
(c) Indian Government
(d) HDFC Bank

Question. On the basis of period funds are classified into_____types:
(a) 3
(b) 2
(c) 4
(d) 5

Question. Sources of finance can be categorised as _________
(a) Source of Generation Basis
(b) Period Basis
(c) Ownership
(d) All of the above

Question. The_______shareholders enjoy a preferential position over_________shareholders:
(a) Equity; preference
(b) Preference; equity
(c) Debenture; equity
(d) None of these

Question. Under the lease agreement, the lessee gets the right to
(a) Share profits earned by the lessor
(b) Participate in the management of the organization
(c) Use the asset for a specified period
(d) Sell the assets

Question. GDRs can be converted into shares _________
(a) At any time
(b) After 5 years
(c) After 10 years
(d) After one year

Question. Hindu Succession Act was passed in_______
(a) 1960
(b) 1956
(c) 1952
(d) 1932  

Question. A person who purchases common stock of a corporation is known as:
(a) Preferred stockholder
(b) Creditor
(c) Bond holder
(d) Common stockholder  

Question. Every partner is both an agent and a principal. Identify the characteristic of the partnership being referred here.
(a) Mutual Agency
(b) Risk Bearing
(c) Membership
(d) Formation  

Question. For the approval of name of the company is applied to :
(a) SEBI
(b) Registrar of company
(c) Indian Government
(d) Concerning state government where company is to be registered.  

Question. Which one of the following is the CORRECT sequence of stages in the formation of a company?
(a) Promotion, incorporation, capital subscription, the commencement of business
(b) Incorporation, capital subscription, promotion, the commencement of business
(c) Promotion, the commencement of business, incorporation, capital subscription
(d) Promotion, Incorporation, Certificate of commencement, capital subscription  

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

Question. Which of the following is a commercial bank?
(a) Punjab National Bank
(b) Canara bank
(c) State Bank of India
(d) All of the above

Question. Which of the following contract is signed by the promoters with the third party on behalf of the proposed company?
(a) Preliminary contracts
(b) Provisional contract
(c) Prospectus
(d) Memorandum of association

Question. Retained earnings is also known as:
(a) Residual owners of the company
(b) Loan capital of the company
(c) Short term capital of the company
(d) Ploughing back of profits

Question. Which type of funds 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) ADR
(c) Equity shares
(d) GDR 

Question. Which of the following denotes the feature of Indian Depository Receipt :
(a) It is issued only to American citizens
(b) It is purchased and sold only by NRI?s
(c) It is traded in American Stock Exchange
(d) It is issued to Indian citizens only

Question. The Financial Institutions are established by:
(a) Both State and Central Govt.
(b) State Govt.
(c) Central Govt.
(d) Municipal Corporation

Question. Which one of the following is not the feature of preference shares:
(a) Provides fixed rate of return
(b) Provides voting rights
(c) Get Preference over equity shares
(d) Part of owner?s capital

Fill in the Blanks:

Question. Debentures are an important instrument for raising _________ term debt capital.

Question. Retain earning does not involve _________ cost in the form of interest, dividend or floatation cost. 

Question. Loan from bank is a ________ source of finance.

Question. Payment of _________ to the shareholders is not compulsory. 

Question. External sources of funds include those sources that lie _________ an organization. 

True / False:

Question. Financial Institutions are also known as Development Banks.

Question. A GDR holder can at any time convert his holdings into the number of shares it represents.

Question. Debentures carry voting rights

Question. Debentures don?t put a permanent burden on the earnings of a company.

Question. The rate of interest charged by banks depends on various factors such as the characteristics of the firm and the level of interest rates in the economy.

Match the following: 

Question. Match the following terms on the basis of meaning:

SIDE A	SIDE B
1. The ploughing back of profits in the business	(a) Share
2. The capital of the company is divided into small units	(b) Shareholders
	(c) Retained earnings

Question. Match the following sources of finance on the basis of sources of raising funds:

SIDE A	SIDE B
1. Equity shares and retained earnings	(a) Long term source of finance
2. Equity shares and preference shares	(b) External source of finance
	(c) Owner‟s funds

Question. Match the following terminologies on the basis of meaning :

SIDE A	SIDE B
1. External sources of funds include those funds that lie outside the business	(a) Working capital
2. The capital which is required for day to day operations of the business	(b) Fixed capital
	(c) Issue of shares

Question. Match the following financial instruments on the basis of features:

SIDE A	SIDE B
1. Democratic control over the management of the company	(a) Retained earnings
2. Do not enjoy the voting rights	(b) Equity shares
	(c) Preference shares

Question. Match the following stakeholders on the basis of benefits they enjoy:

SIDE A	SIDE B
1. They enjoys a preferential right	(a) Equity shareholders
2. Residual owners of the company	(b) Preference shareholders
	(c) Creditors of the company

Pictorial Questions:

Question. Identify the capital which is required for day to day operations of the business?

Question. Identify the capital which is required to purchase fixed assets?

Question. Identify the financial instruments used by the business from the organizations depicted in the given picture?

Question. Identify the internal source of finance when the company plough in excess profits in the
business?

Question. Identify the source of finance by opening up the economy and operations of the business
becoming global?

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