Class 11 Business Studies Important Chapter 8 Sources of Business Finance

Class 11 Business Studies Important Chapter 8 Sources of Business Finance Solutions English Medium As Per AHSEC New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 11 Business Studies Important Solutions and select need one. AHSEC Class 11 Business Studies Additional Notes English Medium Download PDF. HS 1st Year Business Studies Important Solutions in English.

Class 11 Business Studies Important Chapter 8 Sources of Business Finance

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. ASSEB Class 11 Business Studies Additional Question Answer are part of All Subject Solutions. Here we have given HS 1st Year Business Studies Important Notes in English for All Chapters, You can practice these here.

Sources of Business Finance

Chapter: 8

Part – II: Corporate Organisation, Finance and Trade

IMPORTANT QUESTION AND ANSWER

Short type Question and Answer

1. What is business finance?

Ans: Business finance refers to the money required for carrying out business activities such as production, distribution, and expansion of goods and services.

2. What is meant by fixed capital?

Ans: Fixed capital refers to funds required to purchase long-term assets like land, machinery, and buildings, which remain invested in the business for a long time.

3. Define working capital.

Ans: Working capital refers to funds needed for daily operations of a business like purchasing raw materials, paying salaries, and managing inventories.

4. Name two internal sources of finance.

Ans: (i) Retained Earnings.

(ii) Sale of Surplus Assets.

5. What are borrowed funds?

Ans: Borrowed funds are funds raised through loans or borrowings from banks, financial institutions, or through debentures, which are to be repaid after a specified period.

6. Define retained earnings.

Ans: Retained earnings refer to the part of net profits that is not distributed to shareholders but retained in the business for future use.

7. What is trade credit?

Ans: Trade credit is the credit extended by one trader to another for the purchase of goods and services without immediate payment.

8. What is factoring?

Ans: Factoring is a financial service where a business sells its accounts receivable to a factor at a discount to receive immediate cash.

9. Explain lease financing.

Ans: Lease financing is an arrangement where the owner of an asset (lessor) permits another party (lessee) to use the asset in exchange for periodic payments.

10. What are public deposits?

Ans: Public deposits are funds raised directly from the public by businesses in exchange for deposit receipts, usually offering higher interest than bank deposits.

11. Define commercial paper.

Ans: Commercial paper is an unsecured, short-term debt instrument issued by companies in the form of promissory notes to meet short-term financial needs.

12. What is equity share capital?

Ans: Equity share capital refers to the funds raised by issuing equity shares to the public, representing ownership of the company.

13. What are preference shares?

Ans: Preference shares are shares that carry a fixed rate of dividend and have preferential rights over equity shares in dividend payments and return of capital.

14. What are debentures?

Ans: Debentures are long-term debt instruments issued by companies acknowledging a loan taken from debenture holders, with a promise to pay interest.

15. Name two international sources of business finance.

Ans: (i) Global Depository Receipts (GDRs).

(ii) American Depository Receipts (ADRs).