NCERT Class 11 Business Studies Sources of Business Finance

Read and download NCERT Class 11 Business Studies Sources of Business Finance chapter in NCERT book for Class 11 Business Studies. You can download latest NCERT eBooks for 2021 chapter wise in PDF format free from This Business Studies textbook for Class 11 is designed by NCERT and is very useful for students. Please also refer to the NCERT solutions for Class 11 Business Studies to understand the answers of the exercise questions given at the end of this chapter

Sources Of Business Finance Class 11 Business Studies NCERT

Class 11 Business Studies students should refer to the following NCERT Book chapter Sources Of Business Finance in standard 11. This NCERT Book for Grade 11 Business Studies will be very useful for exams and help you to score good marks

Sources Of Business Finance NCERT Class 11


Multiple Choice Questions

Tick the correct answer out of the given alternatives

1. Equity shareholders are called

(a) Owners of the company (b) Partners of the company

(c) Executives of the company (d) Guardian of the company

2. The term ‘redeemable’ is used for

(a) Preference shares (b) Commercial paper

(c) Equity shares (d) Public deposits

3. Funds required for purchasing current assets is an example of

(a) Fixed capital requirement (b) Ploughing back of profits

(c) Working capital requirement (d) Lease financing

4. ADRs are issued in

(a) Canada (b) China

(c) India (d) USA

5. Public deposits are the deposits that are raised directly from

(a) The public (b) The directors

(c) The auditors (d) The owners

6. Under the lease agreement, the lessee gets the right to

(a) Share profits earned (b) Participate in the by the lessor management of the organisation

(c) Use the asset for a (d) Sell the assets specified period

7. Debentures represent

(a) Fixed capital of the company (b) Permanent capital of the company

(c) Fluctuating capital of (d) Loan capital of the the company company

8. Under the factoring arrangement, the factor

(a) Produces and distributes (b) Makes the payment on the goods or services behalf of the client

(c) Collects the client’s debt (d) Transfer the goods from or account receivables one place to another

9. The maturity period of a commercial paper usually ranges from

(a) 20 to 40 days (b) 60 to 90 days

(c) 120 to 365 days (d) 90 to 364 days

10. Internal sources of capital are those that are

(a) generated through outsiders (b) generated through loans such as suppliers from commercial banks

(c) generated through issue (d) generated within of shares the business

Short Answer Questions

1. What is business finance? Why do businesses need funds? Explain.

2. List sources of raising long-term and short-term finance.

3. What is the difference between internal and external sources of raising funds? Explain.

4. What preferential rights are enjoyed by preference shareholders. Explain.

5. Name any three special financial institutions and state their objectives.

6. What is the difference between GDR and ADR? Explain.

Long Answer Questions

1. Explain trade credit and bank credit as sources of short-term finance for business enterprises.

2. Discuss the sources from which a large industrial enterprise can raise capital for financing modernisation and expansion.

3. What advantages does issue of debentures provide over the issue of equity shares?

4. State the merits and demerits of public deposits and retained earnings as methods of business finance.

5. Discuss the financial instruments used in international financing.

6. What is a commercial paper? What are its advantages and limitations.


1. Collect information about the companies that have issued debentures in recent years. Give suggestions to make debentures more popular.

2. Institutional financing has gained importance in recent years. In a scrapbook paste detailed information about various financial institutions that provide financial assistance to Indian companies.

3. On the basis of the sources discussed in the chapter, suggest suitable options to solve the financial problem of the restaurant owner.

4. Prepare a comparative chart of all the sources of finance.

Please refer to attached file for NCERT Class 11 Business Studies Sources of Business Finance



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