IB Bus

What is the primary role of finance for businesses?

• To manage employee relations
• To fund capital and revenue expenditure
• To design marketing strategies
• To oversee production processes

Which of the following is an example of capital expenditure?

• Paying employee wages
• Purchasing raw materials
• Buying machinery for long-term use
• Paying utility bills

What is recorded on the statement of financial position (balance sheet)?

• Revenue expenditure
• Capital expenditure
• Non-current assets
• Day-to-day expenses

Which of the following is an example of revenue expenditure?

• Purchasing a new building
• Paying for raw materials
• Buying a delivery van
• Investing in new technology

What is the main purpose of revenue expenditure?

• To fund long-term investments
• To cover day-to-day operational costs
• To purchase non-current assets
• To expand the business

Which of the following is a source of internal finance?

• Share capital
• Retained profit
• Bank loan
• Crowdfunding

What is the main disadvantage of using personal funds as a source of finance?

• High interest rates
• Limited availability of funds
• Loss of ownership control
• Requires collateral

Which of the following is an external source of finance?

• Retained profit
• Sale of assets
• Overdraft
• Personal funds

What is the main advantage of using retained profit as a source of finance?

• No interest charges
• No dilution of ownership
• No need for repayment
• All of the above

Which of the following is a long-term source of finance?

• Overdraft
• Trade credit
• Share capital
• Crowdfunding