Business Year 12 Recap

Which of the following is NOT an external source of finance?

• Bank overdraft
• Personal savings
• Equity financing
• Trade credit

What is the main purpose of a cash flow forecast?

• To assess market trends
• To calculate the break-even point
• To determine profit margins
• To predict cash inflows and outflows

In a partnership, how are profits typically shared?

• According to the partnership agreement
• Equally among all partners
• Based on capital contribution only
• By majority vote

Which of the following is a benefit of using retained earnings as a source of finance?

• No interest payments required
• Guaranteed funding
• Immediate access to cash
• No need for a business plan

What is a common reason for a business to seek external finance?

• To expand operations
• To reduce expenses
• To increase personal savings
• To pay off existing debts

What is a key component of a business plan?

• Financial projections
• Personal hobbies
• Employee names
• Supplier contact details

Which of the following is an internal source of finance?

• Crowdfunding
• Bank loan
• Venture capital
• Retained earnings

What is a characteristic of a sole trader?

• Unlimited liability
• Limited liability
• Partnership agreement
• Share capital

Which document is essential for securing external finance?

• Business plan
• Cash flow statement
• Income statement
• Balance sheet

What is a disadvantage of a partnership?

• Shared resources
• Increased capital
• Limited decision-making
• Shared profits