WorksheetsSources of Finance Quiz
Total questions: 20
Worksheet time: 10mins
Which of the following is a long-term source of finance?
Bank overdraft
Equity shares
Trade credit
Bills of exchange
Debenture holders are considered:
Owners of the company
Creditors of the company
Employees of the company
Government agents
Preference shares usually carry:
Voting rights and fixed dividends
Fixed dividends but limited or no voting rights
No dividends but voting rights
Variable dividends and full voting rights
Retained earnings are considered a source of finance because:
They reduce liquidity
They belong to shareholders and can be reinvested
They are borrowed from banks
They require interest payments
Which of the following is a short-term source of finance?
Equity shares
Bank overdraft
Term loans
Debentures
Venture capital is best described as:
Short-term debt financing
Long-term equity financing for start-ups
Government subsidy
Trade credit
Factoring refers to:
Selling goods on credit
Obtaining finance by selling receivables to a financial institution
Issuing shares
Borrowing from banks for long-term projects
Which of the following is NOT a source of finance for a company?
Equity shares
Debentures
Accrued expenses
Production planning
A public issue of shares refers to:
Selling shares to the general public
Issuing debentures to banks
Borrowing from financial institutions
Retaining profits
Leasing as a source of finance is preferred because:
It requires full payment upfront
It allows use of assets without owning them
It increases equity capital
It eliminates risk completely
The cost of issuing equity is generally:
Lower than debt
Higher than debt
Zero
Always fixed
Commercial papers are issued by companies to:
Raise long-term equity
Meet short-term financial needs
Finance expansion through retained earnings
Replace bank loans
Which of the following statements is true about debentures?
They represent ownership in a company
They carry fixed interest and are repayable
They have voting rights
They are issued only to promoters
Bridge finance is typically:
Long-term equity financing
Short-term financing to meet temporary cash needs
Government grant
Retained earnings
Internal sources of finance include:
Equity shares and debentures
Retained earnings and sale of assets
Bank loans
Public deposits
External sources of finance include:
Retained earnings
Sale of fixed assets
Bank loans, debentures, and public deposits
Accumulated profits
Rights issue of shares refers to:
Issuing shares to the public
Offering existing shareholders the right to buy additional shares
Issuing preference shares
Borrowing from banks
A convertible debenture is:
A loan that must be repaid immediately
A debenture that can be converted into equity shares
A preference share
Short-term borrowing
Working capital loans are typically:
Long-term financing
Short-term financing to meet day-to-day operations
Equity financing
Venture capital
Which of the following is a characteristic of equity financing?
Fixed interest obligation
Ownership participation and risk-bearing
Guaranteed repayment
Short-term financing only
