N5 BM - Finance Quiz

Why do organisations need finance?

• To pay staff, pay their expenses, and to allow them to expand.

• To reduce their taxes.

• To increase their market share.

• To improve their public image.

What is the purpose of using different sources of finance?

• To confuse competitors.

• To use for different reasons.

• To avoid paying taxes.

• To increase the complexity of financial management.

What factor influences whether a business needs short-term funds or long-term investments?

• Amount Required

• Type of Business

• Purpose

• Length of Time Required

What can increase the overall cost of borrowing for a business?

• Lower interest rates

• Higher interest rates

• Smaller business size

• Short-term investments

What type of finance might a business use if they need a large amount to buy a property?

• Overdraft

• Personal loan

• Mortgage

• Credit card

How does the type and size of a business influence its access to finance?

• Larger businesses have fewer finance options

• Smaller businesses have more finance options

• Smaller businesses have fewer finance options

• Type and size of business do not influence finance access

What type of finance is a business more likely to use if they require funds for a short period?

• Mortgage

• Overdraft

• Long-term loan

• Equity finance

What is one advantage of using personal savings to invest in a business?

• It needs to be paid back.

• Full control of the business is maintained.

• It requires external approval.

• It increases business debt.

What is one disadvantage of using personal savings to invest in a business?

• It does not need to be paid back.

• It requires external approval.

• Personal savings may be lost if the business is unsuccessful.

• It increases business debt.

What is a bank loan?

• A fixed amount of money given to a business by the bank that has to be repaid over time with interest, usually in monthly installments.

• A grant given to a business that does not need to be repaid.

• A donation given to a business by the bank.

• A fixed amount of money given to a business by the government without interest.