Higher Business - Sources of Finance

Finance can be categorised into which of the following?

• Internal and external

• Profitable and non-profitable

• Domestic and international

• Public and private

What is one of the responsibilities of the finance department in a business?

• To ensure the business has the money it needs to operate effectively

• To hire new employees for the company

• To manage the company's marketing strategies

• To develop new products

Which of the following is NOT a task that a business will have to do to make good financial decisions?

• Monitoring cash flow by producing cash budgets

• Monitor financial performance through preparing financial statements

• Controlling costs

• Ignore sources of finance

What must businesses do to be successful?

• Focus solely on product development

• Make good financial decisions

• Avoid preparing any financial information

• Solely rely on external consultants for financial advice

Why do businesses need to choose appropriate ways to finance their organisation?

• To ensure they can repay their loans quickly

• To maximize their investment returns

• To comply with government regulations

• To suit their needs and situation

Can finance be categorised as internal or external?

• Yes

• No

• Only internal

• Only external

What is interest commonly displayed as?

• A fixed amount

• A percentage

• A variable rate

• An annual fee

What is the purpose of interest for a business when it provides a loan?

• To cover administrative costs only

• To provide a free service

• To cover the risk and make a profit

• To register the business with the government

What do you gain interest on?

• Spending

• Savings

• Borrowing

• Investing in stocks

What does equity represent in a public limited company?

• The total assets of the company

• The company's debt obligations

• The shareholders' stake in the company

• The annual turnover of the company