BST- SOURCES OF BUSINESS FINANCE

Which of the statements about retained profits is false?

• You have unlimited amounts of money available

• Shareholders and employees could be frustrated because there is less profit to be 'shared out'

• You do not have to pay interest

• You are free to use it for any purpose

Which is an example of an internal source of finance?

• Owners' Funds

• Trade credit

• Leasing

Which is an example of an external source of finance?

• Owners' Funds
• Sale of assets
• Retained profits
• Bank loan

Who are known as residual owners?

• preference shareholders

• equity shareholders

Which capital is known as risk capital?

• Preference share capital

• equity share capital

Out of the following which one is a type of intercorporate deposit.

• Three month deposit

• Call deposit

• Six month deposit

• All of these

Which of which of the following is source of borrowed fund.

• Equity shares

• Global depository receipt

• Inter corporate deposits

• Indian depository receipt

retained earnings does not involve any cost in the form of

• Dividend

• Interest

• Floatation cost

• All of these

Assertion: the importance of business finances increased tremendously these days.

Reason: goods are produced on large scale and capital intensive techniques are used.

• Both assertion (A)and reason(R) are true and reason(R) is the correct explanation of assertion.

• Both Assertion (A) and Reason (R) is not the correct explanation of assertion (A)

• Assertion (A) is true but reason (R) is false

• Assertion (A) is false but reason (R) is true

Assertion: Equity share capital act as a permanent source of capital for the business

Reason: equity capital is to be repaid at the time of liquidation of a company

• Both assertion (A) and reason(R) are true and reason(R) is the correct explanation of assertion.

• Both Assertion (A) and Reason (R) is not the correct explanation of assertion (A)

• Assertion (A) is true but reason (R) is false

• Assertion (A) is false but reason (R) is true