Q2: What is the primary purpose of retained earnings in a business?
(a) To pay dividends to shareholders
(b) To reinvest in the business
(c) To purchase fixed assets
(d) To repay loans
Q3: Which source of finance is typically used for short-term requirements?
(a) Equity Shares
(b) Debentures
(c) Trade Credit
(d) Retained Earnings
Q4: Which of the following is NOT a factor influencing the choice of finance source?
(a) Cost of funds
(b) Control over business
(c) Number of employees
(d) Purpose of funds
Q5: What type of financing do commercial banks primarily provide?
(a) Long-term financing
(b) Equity financing
(c) Short-term financing
(d) Merchant financing
Fill in the Blanks
Q1: The financial requirements of a business for day-to-day operations are known as __________.
Q2: __________ refers to funds raised through loans from banks and financial institutions.
Q3: The capital raised by a company through the issuance of shares is termed __________.
Q4: __________ financing involves renting an asset instead of purchasing it outright.
Q5: __________ are issued in the money market for short-term financing needs.
True or False
Q1: Owner’s funds include retained earnings.
Q2: Trade credit is a long-term financing option.
Q3: Debenture holders have voting rights in the company.
Q4: Factoring is a method to improve cash flow by selling receivables.
Q5: Public deposits are an unreliable source of finance for new companies.
Match the Following
Short Answer Questions
Q1: What is business finance and why is it important?
Q2: What are the two main types of capital requirements for a business?
Q3: What is trade credit?
Q4: What is retained earnings?
Q5: Why might a business choose to get a loan from a bank?
Q2: Explain the factors that influence the choice of source of finance for a business. Provide detailed explanations for at least five factors that entrepreneurs should consider.
37 videos|144 docs|38 tests
|
1. What are the main sources of business finance? |
2. How do businesses choose the right source of finance? |
3. What are the advantages of using personal savings as a source of business finance? |
4. What is the difference between debt finance and equity finance? |
5. Can crowdfunding be a viable source of business finance? |
|
Explore Courses for Commerce exam
|