Sources of Business Finance (Class 11)
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Questions and Answers

Which of the following is NOT an internal source of finance?

  • Equity
  • Public deposits
  • Retained earnings
  • Loans (correct)
  • Equity financing involves borrowing funds through loans or debentures.

    False

    What are public deposits?

    Funds raised directly from the public, often offering higher interest rates than traditional bank deposits.

    Equity financing involves raising funds by issuing ______.

    <p>shares</p> Signup and view all the answers

    Match the following sources of finance with their definitions:

    <p>Retained earnings = Profits reinvested into the business Debentures = Long-term securities yielding a fixed interest Loans = Borrowed funds that must be repaid Equity = Funds raised by issuing shares</p> Signup and view all the answers

    Which platform offers comprehensive notes on business studies for Class 11?

    <p>Vedantu</p> Signup and view all the answers

    Equity financing and debt financing are both considered internal sources of finance.

    <p>False</p> Signup and view all the answers

    What are the two main categories of financial resources discussed in the Class 11 notes?

    <p>Internal and external sources of finance.</p> Signup and view all the answers

    Study Notes

    Sources of Business Finance (Class 11)

    • Chapter 8 explores various financial resources for businesses, categorized as internal and external.
    • Topics include retained earnings, equity, debentures, loans, and public deposits.
    • Internal sources (e.g., retained earnings) are funds generated within the business.
    • External sources (e.g., loans, equity) are obtained from outside the business.

    Internal and External Sources

    • Internal sources: Funds generated within the business, like retained earnings.
    • External sources: Funds acquired from outside the business, such as loans, debentures, and equity.

    Equity and Debt Financing

    • Equity financing involves raising funds by issuing shares (ownership).
    • Debt financing involves borrowing money through loans or debentures (to repay with interest).
    • Both methods are important ways businesses raise capital.

    Financial Institutions

    • Chapter 8 discusses the role of financial institutions in funding businesses.

    Public Deposits

    • Public deposits are funds raised from the public.
    • Often offers higher interest rates compared to bank deposits.

    Accessing Study Materials

    • Concise and student-friendly study notes available on Vedantu's website.
    • Downloadable PDF notes for Business Studies Class 11 Chapter 8 are available.
    • Comprehensive notes, detailed explanations, and supplementary materials provided for effective learning.

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    Description

    This quiz focuses on Chapter 8 from Class 11 Business Studies, covering various sources of business finance, both internal and external. Topics include retained earnings, equity financing, debt financing, and the role of financial institutions in funding. Test your understanding of how businesses generate and acquire funds.

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