
IGCSE Section 5: Financial Information & Decisions
Authored by Niall Clark
Business
11th Grade
Used 30+ times

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30 questions
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1.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
What is start-up capital in a business?
The money spent on day-to-day expenses like wages and rent
The money needed to pay day-to-day running expenses
The initial capital used to buy fixed and current assets before trading
The money spent on long-term assets like vehicles and machinery
2.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
What is the advantage of using retained profit as a source of finance?
It is a permanent source of capital and no need to repay the money to shareholders
It is available to the firm quickly and no interest has to be paid
It provides immediate cash to the business and the business doesn't have to handle debt collecting
It does not have to be repaid and no interest has to be paid
3.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
What is the disadvantage of using owner's savings as a source of finance?
It increases the risk taken by the owners
It makes better use of capital tied up in the business
It reduces costs of inventory holding
It does not become debt for the business, unlike a loan
4.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
What is the advantage of issuing shares for a limited company?
The ownership of the business will change hands
The company doesn't have to repay the money to shareholders
The business can get very low rates of interest on their loans
The bank can ask for the overdraft to be repaid at a short notice
5.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
What is the disadvantage of bank loans as a source of finance?
Need to pay interest on the loan and it has to be repaid after a specified length of time
The debt factor will get a percent of the debts collected and the business doesn't get all of their debts
The bank can claim your property if the loan isn't repaid
Quick to arrange a loan and can be for varying lengths of time
6.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
What is the advantage of using trade credits as a source of finance?
The business can decide to buy the asset at the end of the leasing period
The business doesn't have to handle debt collecting
The bank can ask for the overdraft to be repaid at a short notice
No interests, repayments involved
7.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
What is the advantage of using hire purchase as a method of finance?
The firm doesn't need a large sum of money to use the asset
The firms doesn't need a large sum of cash to acquire the asset
The firm doesn't need to repay the money to shareholders
The firm doesn't need to handle debt collecting
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