Please refer to Chapter 8 Sources of Business Finance MCQ Class 11 Business Studies with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 11 Business Studies. Students should refer to MCQ Questions for Class 11 Business Studies with Answers to score more marks in Grade 11 Business Studies exams. Students should read the chapter Sources of Business Finance and then attempt the following objective questions.

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

The Sources of Business Finance MCQ Class 11 Business Studies provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question. Which of the followings comes under the modern small industries.
(a) coir
(b) power looms
(c ) handicrafts
(d) khadi 

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

Question. ADR are issued in.
(a) Afghanistan
(b) USA
(c ) china
(d) India 

Question.——- is defined as one in which the investment in fixed assets of plant and machinery dies not exceed rs. 1 crore.
(a) small scale industry.
(b) limited company
(c ) large scale industry
(d) none of these. 

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

Question. Micro enterprise are those whose investment in plant and machinery does not exceed.
(a) 3 lakhs
(b) 5 lakhs
(c) 1 lakhs
(d) 2 lakhs   

Question.Internal source of capital are those that are.
(a) generated through outsiders such as suppliers.
(b) generated through loan from commercial banks.
(c ) generated through issue of shares.
(d) generated within the business. 

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

Question.Under the factoring arrangement, the factor.
(a) produces and distributes the goods or services.
(b) make the payment on behalf of the client.
(c ) collect the clients debt or account receivables.
(d) Transfer the goods from one place to another. 

Question.Equity share holders are called.
(a) owners of the company
(b) partners of the company
(c ) Executives of the company
(d) Guardian of the company

Question.Funds required for purchasing current assets is an example of
(a) fixed capital requirement.
(b) ploughing back of profit.
(c ) working capital requirement.
(d) Lease financing. 

Question.A tiny unit is defined as an industrial or business enterprise whose investment in plant and machinery is not more than .
(a) 35 lakhs
(b) 50 lakhs
(c) 30 lakhs
(d) 25 lakhs 

Question.The small scale industries can enjoy the status of ——- unit if it exports more than 50% of its production.
(a) import oriented unit.
(b) Export oriented unit.
(c ) small scale unit.
(d) domestic unit. 

Question. ADRs are issued in:
(a) Canada
(b) China
(c) India
(d) USA

Question. What does Debenture holders get in return of their debt in company
(a) Dividend
(b) Interest
(c) Profit
(d) Loss 

Question. On the basis of period the different sources of funds can be categorized into :
(a) Two parts
(b) Three parts
(c) Four parts
(d) Five parts

Question. Which source of finance is preferred by investors who want fixed income at lesser risk
(a) Debentures
(b) Equity shares
(c) Preference shares
(d) Bank loan 

Question. Which of the following is an external source of finance?
(a) Retained earnings
(b) Equity shares
(c) Preference shares
(d) Debentures 

Question. Short term funds are those funds which are required for a period not exceeding:
(a) Three years
(b) Two years
(c) One year
(d) Five years

Question. Trade Credit is granted to those customers who have reasonable amount of:
(a) Funds in their Bank A/c
(b) Financial standing and goodwill
(c) Weakness
(d) Zero Balance in their A/c

Question. Retained earnings is a :
(a) Permanent source of funds
(b) Temporary source of funds
(c) Fixed source of funds
(d) Expensive source source of funds

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

Question. Internal sources of capital are those that are: 
(a) generated through outsiders
(b) generated through loans such as suppliers from commercial banks
(c) generated through issue
(d) generated within of shares the business

Question.The maturity period of a commercial paper usually range from.
(a) 20 to 40 days
(b) 60 to 90 days.
(c ) 120 to 365 days.
(d) 90 to 365 

Question.Under the lease agreement , the lessee gets the right to.
(a) share profits earned by lessor
(b) participate in the management of the organization.
(c ) use the asset for a specified period.  
(d) sell the assets 

Fill in the Blanks:

Question. The loan is repaid either in _________ or in installments.

Question. _________ are also known as residual owners ,since they receive what is left after all the other claims of the company?s income and assets have been settled. 

Question. Each company has certain _________ capacity to take the debts.

Question. Debenture issued by a company is a written _________ of debt taken from public.

Question. Internal sources of funds are those that are generated from _________ the business. 

True / False:

Question. Commercial banks are not playing the vital role in the capital market for providing funds.

Question. Preference shareholders generally do not enjoy any voting rights.

Question. Assets, which are mortgaged, with the commercial banks can?t be used in the business.

Question. Standard Chartered PLC was the first company that issued Indian Depository Receipt in India securities market in June 2010.

Question. Financing through debentures is less costly.

Match the following:

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

1. Trade credits	(a) only limited amount of funds can be raised
2. Public Deposits	(b) is a convenient and continuous source of funds
	(c) it is not having any charge on the assets of the company
	(d) it is difficult for the new businesses to raise the funds

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

1. Trade Credits	(a) facilitate purchase of goods and services without making immediate payments
2. Preference Shares	(b) refers to that part of profits which is kept and reserve for the use in future
	(c) it has characteristics of both equity and debentures

Question. Match the following means of financing on the basis of their nature:

1. Loans from Commercial Banks	(a) Three months deposits, Six months deposits & Call deposits
2. Inter Corporate Deposits	(b) Cash deposits, Bank overdrafts, Term loans & Letter of Credits
	(c) Public deposits & International Financing

Question. Match the following financial instruments on the basis of their meaning

1. Bonds	(a) raising funds from another company
2. Trade credits	(b) debt instrument with fixed rate of interest
	(c) Purchase of goods without the immediate payments

Question. Match the following Abbreviation with their full forms :-

1. CRISIL	(a) Foreign Currency Convertible Bonds
2. FCCBs	(b) Company Rating and Information Sytem of India Ltd.
	(c) Credit Rating and Information Services of India Ltd.
	(d) France Currency Convertible Bonds

Pictorial Questions:

Question. Which of the following business require higher amount of working capital?

Question. Identify the different sources of finance traded in the oraganisation shown in the picture?

Question. Write the nature of return on investment given to the debenture holders in the business
situation shown in the picture:

Question. Identify the primary function of the institution shown in the picture?

Question. Identify the one of the method of providing credit by the commercial banks with the help of given picture:

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