business finance quiz

Which of the following is a permanent main source of business finance?

• long-term loan

• retained profit

• overdraft

• sale of stock

Which of the following best describes working capital?

• Capital needed for capital expenditure

• Capital needed to start a business

• Capital spent on wages

• Capital needed for day to day expenditure

Which of the following statements is true?

• Businesses should aim to increase their working capital

• Businesses need working capital to impress investors

• Businesses need working capital because cash inflows and and cash outflows happen at different time

• None of the above

Increasing credit terms to costumers are likely to :

• upset costumers

• please costumers

• decrease working capital

• provide additional long term finance

Which is the most likely use for Debt factoring?

• Providing small amounts of finance for one-off problems

• Providing regular large amounts of finance

• Providing permanent finance

• To finance major long terms

Which of the following statements best describe debentures?

• Long term bonds issued by businesses

• Short term loans by banks to businesses

• A type of overdraft

• A loan that is secured against an asset

A public limited company wants to take over a competitor. This will involve a large amount of finance. The best source of finance is likely to be:

• an overdraft

• debt factoring

• taking on a new partner

• a share issue

A sole trader wants to increase the stock of products in his shop. The best source of finance is likely to be:

• a long term bank loan

• trade credit

• sale of shares

• mortgage

An advantage of taking on a new partner is that:

• it reduces the risk of a takeover

• it ensures the business will be able to get a loan

• the partner will bring additional finance

• the other partners will now have limited liability

Which sort of finance provided for poor ad low income customers who do not have access to bankingservices, such as loans and overdrafts offered by traditional commercial banks.

• Leasing

• long term loans bank

• microfinance

• Bank overdraft