Sources of Business Finance
Commerce ⇒ Business Studies
Sources of Business Finance starts at 11 and continues till grade 12.
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Describe any two limitations of using bank loans as a source of business finance.
Explain any two advantages of using trade credit as a source of finance.
Explain the concept of lease financing as a source of business finance.
Explain the difference between equity shares and preference shares as sources of business finance.
Explain the difference between internal and external sources of business finance with examples.
A company is planning to expand its operations and needs a large amount of funds for a long period. Which source of finance is most appropriate? (1) Equity shares (2) Trade credit (3) Bank overdraft (4) Commercial paper
A company needs to finance the purchase of raw materials for 3 months. Which source of finance is most suitable? (1) Equity shares (2) Trade credit (3) Debentures (4) Public deposits
A company wants to avoid increasing its debt-equity ratio. Which source of finance should it prefer? (1) Bank loan (2) Debentures (3) Retained earnings (4) Public deposits
A company is planning to expand its operations and needs a large amount of funds for a long period. Which source of finance is most appropriate? (1) Equity shares (2) Trade credit (3) Bank overdraft (4) Commercial paper
A company needs to finance the purchase of raw materials for 3 months. Which source of finance is most suitable? (1) Equity shares (2) Trade credit (3) Debentures (4) Public deposits
A company wants to avoid increasing its debt-equity ratio. Which source of finance should it prefer? (1) Bank loan (2) Debentures (3) Retained earnings (4) Public deposits
Which of the following is a demerit of using public deposits as a source of finance? (1) No dilution of control (2) Limited funds can be raised (3) No fixed repayment schedule (4) No interest cost
Fill in the blank: ________ are financial instruments issued by companies to raise long-term funds from the public, promising to pay a fixed rate of interest.
Fill in the blank: ________ is a short-term negotiable, unsecured promissory note issued by companies to raise funds.
Fill in the blank: ________ is a source of finance where a business borrows money from a bank for a specific period and repays it with interest.
Fill in the blank: ________ is a source of finance where a business can withdraw more money than what is available in its current account, up to a certain limit.
Is it correct to say that 'Commercial banks provide both short-term and long-term finance to businesses'?
Is it correct to say that 'Factoring improves the liquidity position of a business'?
Is it correct to say that 'Trade credit is an external source of finance'?
Is it true that debenture holders are the owners of the company?
