Finance Concepts True or False

Front

Equity refers to the funds contributed by the business owners to start and then expand the business.

Back

True

Front

An owner who contributes equity to a business retains no control over how that finance is used.

Back

False

Front

Debt refers to the funds provided by banks, other financial institutions, government and suppliers.

Back

True

Front

Debt must be paid back when the borrower has the capacity to pay.

Back

True

Front

Equity does not have to be repaid unless the owners leave the business.

Back

True

Front

A bank overdraft allows a business or individual to overdraw their account up to an agreed limit.

Back

True

Front

Trade credit allows a business to trade by borrowing over the long term.

Back

True

Front

Leasing involves the payment of money for using machinery that is owned by the business.

Back

True

Front

Can governments provide finance in the form of grants for business development?

Back

True

Front

Businesses must find the source of finance that is most appropriate to fund the activities arising from these decisions.

Back

True