Unit 3 quiz 3

Organize these options into the right categories

Groups:

(a) Revenue Income

,

(b) Capital income

,

(c) Capital expenditure

,

(d) Revenue Expenditure

• Loan

• Credit Sales

• stationery

• Cash Sales

• Interest received

• Rent Received

• land

• vehicles

• Rent

• Patents

• wages

• Owner's Capital

• machinery

• Selling Shares

• interest paid

Organize these options into the right categories

Groups:

(a) Branch

,

(b) Online Banking

,

(c) Postal Banking

,

(d) Telephone Banking

• can be slow

• increased risk due to cyber crime

• post can get lost

• secure online transactions

• restricted to bank opening hours

• does not require any additional technology or devices

• personalized customer service

• higher risk of fraud and identity theft

• requires travel

• automated telephone systems can be frustrating

• opportunity to build relationhip developing trust and brand loyalty

• 24/7 access to account

• ability to speak with a live representative

Organize these options into the right categories (sources of finance)

Groups:

(a) Retained Profit

,

(b) Net current assets

,

(c) Venture Capital

,

(d) Loans

• available immediately

• advice and mentorship might also be provided

• conflict can arise between the two parties

• might be secured against an asset

• no loss of ownership

• Encourages the business to manage cash flow effectively

• Interest is charged on the amount borrowed

• can put pressure on customers as shorter credit terms are offered

• no interest charges

• partial loss of ownership and control

• regular pre-agreed repayments make budgeting easier

Organize these options into the right categories

Groups:

(a) Current Asset

,

(b) Non Current Assets

,

(c) Current Liabilities

,

(d) Non Current Liabilities

• Prepayments

• Accruals

• Inventory

• Trade Receivable

• Mortgage

• Overdraft

• Land

• Patent

• Machinery

• Buildings

• Trade Payable

• 3 year Loan

• Cash

Organize these options into the right categories

Groups:

(a) Crowdfunding

,

(b) Debt Factoring

,

(c) Hire Purchase

,

(d) Mortgage

• Not suitable for small amounts or a as short term form of finance

• Another company takes on the risk of bad debt

• Overall amount paid for asset will be higher than buying outright

• Avoids the need to pay a lump sum for the use of an asset

• only really suitable for low cost assets

• no guarantee that you will attract sufficient investment

• Large amounts of finance raised and repaid over a prolonged period of time

• Can also serve as a marketing opportunity

• Only receive a fraction of the amount owed

• speeds up cash flow into the business from debts

• Regular instalments make planning easier

• Secured against the property

Organize these options into the right categories

Groups:

(a) Leasing

,

(b) Trade Credit

,

(c) Grants

,

(d) Invoice discounting

• Delays need to pay for goods and services, aiding cash flow

• Only available if purchases are paid in cash which affects cash flow

• business will not receive discounts for prompt payment

• spreads the cost of an asset over its life, avoid paying a lump sum

• responsibility for repair and maintenance stays with supplier

• never own the assets

• Reduces costs to the business so increase profit

• Often require a lengthy application process

• No need to repay and no interest charges