Practise Quiz - Short Term and Long Term Funding

What is trade credit?

• When a business sells its invoices to a third party at a discount

• When a business buys goods or services from a supplier and is allowed to pay for them later

• A facility provided by a bank that allows a business to go into negative up to an agreed limit

• A form of credit that enables businesses to purchase goods and services without having to pay for them immediately

What is factoring?

• When a business sells its invoices to a third party at a discount

• When a business buys goods or services from a supplier and is allowed to pay for them later

• A facility provided by a bank that allows a business to go into negative up to an agreed limit

• A form of credit that enables businesses to purchase goods and services without having to pay for them immediately

What is an overdraft?

• When a business sells its invoices to a third party at a discount

• When a business buys goods or services from a supplier and is allowed to pay for them later

• A facility provided by a bank that allows a business to go into negative up to an agreed limit

• A form of credit that enables businesses to purchase goods and services without having to pay for them immediately

What is a credit card?

• When a business sells its invoices to a third party at a discount

• When a business buys goods or services from a supplier and is allowed to pay for them later

• A facility provided by a bank that allows a business to go into negative up to an agreed limit

• A form of credit that enables businesses to purchase goods and services without having to pay for them immediately

What is personal savings?

• When a business rents equipment, machinery, or property for a set period of time

• A form of finance provided by a bank that is repaid over a period of time with interest

• When a business buys goods or services from a supplier and is allowed to pay for them later

• Money saved by an individual that can be used to finance a business

What are bank loans?

• When a business rents equipment, machinery, or property for a set period of time

• A form of finance provided by a bank that is repaid over a period of time with interest

• When a business buys goods or services from a supplier and is allowed to pay for them later

• Money saved by an individual that can be used to finance a business

What is leasing?

• When a business rents equipment, machinery, or property for a set period of time

• A form of finance provided by a bank that is repaid over a period of time with interest

• When a business buys goods or services from a supplier and is allowed to pay for them later

• Money saved by an individual that can be used to finance a business

What are loans from friends or family?

• When a business rents equipment, machinery, or property for a set period of time

• A form of finance provided by a bank that is repaid over a period of time with interest

• When a business buys goods or services from a supplier and is allowed to pay for them later

• Money borrowed from friends or family to finance a business

What is the purpose of trade credit?

• To provide immediate cash flow and reduce the risk of bad debts

• To purchase goods and services without having to pay for them immediately

• To go into negative up to an agreed limit

• To make purchases and pay bills

What is the purpose of leasing?

• To provide immediate cash flow and reduce the risk of bad debts

• To purchase goods and services without having to pay for them immediately

• To rent equipment, machinery, or property for a set period of time

• To make purchases and pay bills