Unit 3 Finance Exam practice

Revenue Expenditures are

• external sources of finance from financial institutions

• when a business sells off its unwanted or unused assets to raise funds.

• money spent on the day-to-day running of the business, such as rent or insurance.

• money spent on acquiring fixed assets for the business, such as machinery or buildings

Revenue is

• total sales - cost of goods sold

• price x the # of units sold

• price x contribution per unit

Which of the following are medium-term sources of finance?

• Trade credit

• Overdraft

• Leasing

• Grants

• Debt factoring

Capital Expenditures are

• money spent to acquire fixed assets for a business, such as machinery, land or buildings.

• money spent on the day-to-day running of the business, such as wages or insurance.

• an external source of finance from a financial institution

• when a business sells off its unwanted or unused assets

Which of the following are internal sources of finance?

• Loans

• Sale of Assets

• Personal savings

• Overdrafts

What is retained profit?

• profit that remains after a business has paid corporation tax to the government and dividends to shareholders

• money raised from the sale of share of a limited company (when a business "goes public")

• a source of finance for sole traders that comes mostly from their own personal savings

• the portion of profit that the government takes from a business's revenue

What are direct costs?

• are costs that can be clearly attributed to the production of specific goods or services, such as raw materials

• costs that have the same set amount from month-to-month, such as a rent payment.

• are costs that are not ties to production but directly pay for overhead, such as the executive's salary.

Which of the following is the calculation for contribution per unit?

• price per unit - variable cost per unit

• variable cost per unit X contribution per unit

• profit - fixed costs

• price per unit - fixed costs per unit

Which of the following is an example of a semi-variable cost?

• Rent

• Water bill

• Salesperson salary + commission

• Interest on loans

This source of finance allows a business to "buy now and pay later." The seller usually allows between 30-60 days for payment.

• Grant

• Overdrafts

• Trade Credit

• Subisidies