OCR Unit 5 Finance Quiz

1. Which of the following tasks is part of the role of the finance function?

• Choosing which pricing method to use
• Ordering raw materials from suppliers
• Paying the wages and salaries of the employees
• Providing cash flow information to management

2. Which of the following is the finance function of a business most likely to be concerned about?

• The communication methods used by the business
• The cost of running the business
• The ethical profile of the business
• The reputation of the business

3. Short term finance is most likely to be used by a business when it:

• has plenty of money in its bank account
• is looking for a new partner
• needs money to continue trading
• wants to build a new factory

4. One advantage to a company of using a bank loan to fund its expansion is that:

• business costs will fall
• cash flow monitoring will not be required
• interest is added to the amount that is owed
• the money can be paid back in instalments

5. Which of the following is a long term source of finance for an established company?

• A share issue
• An overdraft
• Sale of assets
• Trade credit

6. A business will make a loss if:

• its fixed costs are greater than its variable costs
• its revenue is greater than its total costs
• its total costs are greater than its revenue
• its variable costs are greater than its fixed costs

7. Which of the following is a consequence to a business of an increase in its monthly rent?

• Break-even quantity increases
• Profit increases
• Total revenue falls
• Variable costs rise

8. Which type of cost will not change even if output increases?

• Fixed cost
• Production cost
• Total cost
• Variable cost

9. A business sells 3000 items at 50p each. Its revenue is:

• £1500
• 50p
• £15 000
• £3000

10. Financial data for Sciser Ltd in 2016 is shown below. Revenue - £75 000. Cost of sales - £32000. Expenses - £28 000. Sciser Ltd’s gross profit in 2016 was:

• £4000
• £15 000
• £43 000
• £47 000