{"id":18548,"date":"2021-02-11T15:48:38","date_gmt":"2021-02-11T10:18:38","guid":{"rendered":"https:\/\/mcq-questions.com\/?p=18548"},"modified":"2022-03-02T11:11:41","modified_gmt":"2022-03-02T05:41:41","slug":"ncert-solutions-for-class-11-business-studies-chapter-8","status":"publish","type":"post","link":"https:\/\/mcq-questions.com\/ncert-solutions-for-class-11-business-studies-chapter-8\/","title":{"rendered":"NCERT Solutions for Class 11 Business Studies Chapter 8 Sources of Business Finance"},"content":{"rendered":"

Detailed, Step-by-Step NCERT Solutions for 11 Business Studies<\/a> Chapter 8 Sources of Business Finance Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.<\/p>\n

Sources of Business Finance NCERT Solutions for Class 11 Business Studies Chapter 8<\/h2>\n

Sources of Business Finance Questions and Answers <\/span>Class 11 Business Studies Chapter 8<\/h3>\n

Tick (\u2713) the correct answer out of the given alternatives :<\/span><\/p>\n

Question 1.
\nEquity shareholders are called :
\n(a) Owners of the company
\n(b) Partners of the company
\n(c) Executives of the Company
\n(d) Guardian of the company
\nAnswer:
\n(a) Owners of the company<\/p>\n

Question 2.
\nThe terin \u2018redeemable\u2019 is used for :
\n(a) Preference Shares
\n(b) Commercial Paper
\n(c) Equity Shares
\n(d) Public Deposits
\nAnswer:
\n(a) Preference Shares<\/p>\n

\"NCERT<\/p>\n

Question 3.
\nFunds required for purchasing current assets is an example of:
\n(a) Fixed capital requirement
\n(b) Ploughing back of profits
\n(c) Working capital requirement
\n(d) Lease financing
\nAnswer:
\n(c) Working capital requirement<\/p>\n

Question 4.
\nADR\u2019s are issued in:
\n(a) Canada
\n(b) China
\n(c) India
\n(d) USA
\nAnswer:
\n(d) USA<\/p>\n

Question 5.
\nPublic deposits are the deposits that are raised directly from:
\n(a) The Public
\n(b) The Directors
\n(c) The Auditors
\n(d) The Owners
\nAnswer:
\n(a) The Public<\/p>\n

Question 6.
\nUnder the lease agreement, the lessee gets to right to:
\n(a) Share profits earned by the lessor
\n(b) Participate in the management of the organization
\n(c) Use the assist for a specified period
\n(d) Sell the assets
\nAnswer:
\n(c) Use the assist for a specified period<\/p>\n

\"NCERT<\/p>\n

Question 7.
\nDebentures represent:
\n(a) Fixed capital of the company
\n(b) Permanent capital of company
\n(c) Fluctuating capital of the company
\n(d) Loan capital of the company.
\nAnswer:
\n(d) Loan capital of the company.<\/p>\n

Question 8.
\nUnder the factoring arrangement, the factor:
\n(a) Produces and distributes the goods or services
\n(b) Makes the payment on behalf of the client
\n(c) Collects the client\u2019s debt or account receivables
\n(d) Transfer the goods from one place to another.
\nAnswer:
\n(b) Makes the payment on behalf of the client<\/p>\n

Question 9.
\nThe maturity period of a commercial paper usually ranges from:
\n(a) 20 to 40 days
\n(b) 60 to 90 days
\n(c) 120 to 365 days
\n(d) 90 to 364 days
\nAnswer:
\n(d) 90 to 364 days<\/p>\n

Question 10.
\nInternal sources of capital are those that are:
\n(a) generated through outsiders such as suppliers.
\n(b) generated through loans from commercial banks.
\n(c) generated through issue of shares.
\n(d) generated within the business.
\nAnswer:
\n(d) generated within the business.<\/p>\n

Short Answer Questions<\/span><\/p>\n

Question 1.
\nWhat is business finance? Why do businesses need funds? Explain.
\nAnswer:
\nBusiness is an economic activity directed towards producing, acquiring wealth through buying and selling of goods. It is a very wide term. Finance is the lifeblood of the business. Funds are required to commence and carry on business. All business activities such as planning, organizing, managing, controlling, purchasing, selling, directing, marketing, etc cannot take place without finance.<\/p>\n

Thus, we can say the requirements of funds by a business to carry out its various activities is called business finance. When an entrepreneur takes a decision to start a business the need for funds arises in order to meet the expenses of the establishment of the business, finance is required for purchasing fixed and current assets, for day-to-day operations, purchase of raw material, to pay salaries, etc. Smooth functioning, expansion, and growth of the business are possible when it has sufficient funds.<\/p>\n

\"NCERT<\/p>\n

Question 2.
\nList sources of raising long-term, and short-term finance.
\nAnswer:
\nTypes of Business Finance – On the basis-of nature and purpose served finance used in business is of the following types:
\n(i) Long-term finance
\n(ii) Medium-term finance.
\n(iii) Short-term finance.<\/p>\n

\"NCERT<\/p>\n

Types of Business Finance
\n(i) Long-term Finance – Long-term finance is used for meeting the permanent needs of business. It is required for investment in fixed assets like, building, plant and machinery and for financing expansion programmes. Long-term funds are raised for a long period, say, more than five years. They are generally invested in fixed assets.<\/p>\n

\"NCERT<\/p>\n

The sources of long-term financing are :<\/p>\n