PERIODIC TEST – II / CLASS XI / BUSINESS STUDIES (054) / (2021-22) M.

M: 30 TIME: 1 HR

1. Why Equity Share Capital is called Residual Capital? (1)

2. Why is there tax saving in case of Debentures? (1)
3. A source of finance having merits like no cost, no security, no dilution of rights is called
__________. (1)
4. Ragni has set up a unit to create various types of fashion jewellery like necklaces, earrings and bracelets that
are innovatively designed. Her total investment in plant and machinery is Rs. 7 crore. Under what category
will Ragni’s business be placed as per MSMED Act, 2006? (1)
5. ‘A company purchases goods on two-month credit however it sells goods on one-month credit.' What can be
commented about the requirement of working capital of the company? (1)
6. What is the role of small sector in development of country? (3)
7. The government of India launched this program on 1st May, 1978, with special stress on small, tiny and
cottage industries by providing integrated administrative support. To achieve this objective an agency was set
up at district level.
a) Write down the name of that agency.
b) Discuss the functions of the agency. (3)
8. ‘It facilitates purchase of goods without making immediate payment.’ Identify the source of finance. Explain
any two merits and two demerits of the same. (4)
9. After completing her Masters in medicine, Nitya has opened a small nursing home in the hilly area of Valparai
which is located 3,500 feet above sea level. What are the incentives available to her from the government of
India for promoting small business? (4)
10. Differentiate between Public Deposits and Loans from Commercial banks. (5)
11. Ding Dong Ltd. is planning to float an issue of equity shares in the market in the next four months. The
directors of the company are also of the opinion that the company should raise some portion of funds from
international capital market through equity.
In context of above case:
a) State any four merits of raising funds through equity shares.
b) Explain source through which company can raise funds from USA market. (6)