Chapter 22: Business Finance - Needs & Source

Which of the following are the function of a finance department?

• forecasting cash flow

• preparing final accounts

• record all financial transactions

• preparing production planning and inventory control

Which of the following are the reasons why businesses need finance?

• expansion of an existing business

• starting up a business

• to develop a new product

• additional working capital

________ finance needed to launch a new business.

• working capital

• capital expenditure

• start-up capital

• revenue expenditure

Which of the following is described as the 'lifeblood' of a business means it is needed to pay for all their day-to-day activities?

• start-up capital

• working capital

• capital expenditure

• cash flow

Which of the following are the sources of finance from inside the company?

• owner's saving

• overdraft

• bank loan

• retained profit

_________ profit kept in the business after the owners have taken their share of the profits.

• sale of existing assets

• bond

• debenture

• retained profit

Which of the following are the long-term source of finance

• debentures

• debt factoring

• bank loans

• overdraft

________ sum of money obtained from a bank which must be repaid and on which interest is payable.

• issue of shares

• factoring of debts

• selling debentures

• bank loans

What does IPO stand for?

• Initial private overhandling

• Immediate public offering

• Initial public offering

• Immediate private overseas

Which of the following is the drawback for factoring of debts?

• change of ownership

• must be repaid along with the interest

• the business does not receive 100% of the value of its debt

• strings attached means need to meet certain terms and conditions