Types of Credit Quiz

What is the capital used to pay for the day-to-day running expenses of the business and to pay urgent bills such as electric and telephone called?

• Start up capital

• Investment capital

• Additional capital

• Working capital

Which source of finance involves the business owing money to outside individuals or institutions?

• Owner's own capital

• Retained profits

• Bank loan

• Sale of fixed assets

Which source of finance allows a business to withdraw more money from its current bank account than it contains, up to a certain limit agreed previously with the bank manager?

• Share issue

• Mortgages

• Bank overdraft

• Additional partners

What is the long-term source of finance that involves issuing new shares for shareholders in a limited company?

• Leasing assets

• Share issue

• Additional partners

• Bank loan

Which short-term means of finance involves putting off paying suppliers for materials immediately?

• Trade credit

• Factoring

• Government grants

• Online collaborative funding

Which external source of finance provides grants to assist businesses setting up, expanding, or exporting?

• Mortgages

• Bank loan

• Online collaborative funding

• Government grants

What is the online way to get an array of venture capitalists with the idea of a lot of people investing a little collaboratively called?

• Online collaborative funding

• Trade credit

• Factoring

• Government grants

Which internal source of finance comes from inside the business, the business' assets or activities?

• Debt collection

• Retained profits

• Owner's own capital

• Sale of fixed assets

What is the method of finance where the business eventually becomes the owner of the asset once it has paid off all the instalments?

• Hire purchase

• Factoring

• Leasing assets

• Trade credit

Which source of finance involves the owner(s) investing more of their private money into the business?

• Owner's own capital

• Sale of fixed assets

• Debt collection

• Retained profits