Level 3 Business & Personal Finance

What are the different sources of finance for a business?

• Asking friends and family for donations

• Bank loans, venture capital, angel investors, crowdfunding, personal savings, and government grants

• Winning the lottery

• Selling products on the black market

What is the purpose of a profit and loss account?

• To calculate the amount of office supplies needed for the year

• To determine the color scheme for the company logo

• To track the number of employees in the business

• To show the financial performance of a business

What is breakeven analysis used for?

• To determine the point at which revenue equals total costs

• To analyze market trends

• To calculate profit margin

• To determine the best pricing strategy

What are the different ways to pay for goods and services?

• Using seashells as currency

• Cash, credit/debit cards, mobile wallets, online payment platforms, bank transfers

• Bartering with goods

• Sending carrier pigeons with payment

What is the role of financial institutions in the economy?

• Hinder the flow of funds

• Facilitate the flow of funds, provide financial services, and promote economic growth

• Limit access to financial services

• Cause economic stagnation

Which of the following is not a source of finance?

• Option A: Bank loan

• Option B: Venture capital

• Option D: Issuing bonds

• Option C: Employee satisfaction

What does a profit and loss account show?

• Financial performance of a business

• List of suppliers for the business

• Total square footage of the business premises

• Number of employees in the business

What is the formula for calculating the breakeven point?

• Breakeven Point = Fixed Costs + (Selling Price per Unit * Variable Cost per Unit)

• Breakeven Point = Fixed Costs - (Selling Price per Unit / Variable Cost per Unit)

• Breakeven Point = Fixed Costs * (Selling Price per Unit + Variable Cost per Unit)

• Breakeven Point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

Give two examples of a financial institution.

What is the main advantage of using a credit card for payment?

• Convenience and flexibility

• No rewards or benefits

• Higher interest rates

• Limited acceptance