Business Finance Quiz

What type of expenditure is money spent on day-to-day expenses?

• Capital expenditure

• Revenue expenditure

• Fixed expenditure

• Variable expenditure

Which of the following is an advantage of using retained profit?

• It is available for new businesses

• It increases debts

• No interest to pay

• It must be repaid

What is a disadvantage of selling existing assets?

• It increases debts

• It may take time to sell

• It is not available for new businesses

• It reduces capital

Which of the following is a source of internal finance?

• Crowdfunding

• Venture capital

• Retained profit

• Bank loans

What is a key advantage of issuing shares as a long-term finance option?

• It must be repaid

• It requires collateral

• It is a permanent source of capital

• Dividends are paid before tax

What is a disadvantage of bank loans?

• They are available only to large companies

• They are always interest-free

• Interest must be paid

• They do not need to be repaid

What is one advantage of crowdfunding?

• It is only for established businesses

• It guarantees success

• It can be a fast way to raise funds

• It requires a large initial investment

What is a disadvantage of using a bank overdraft?

• It is always interest-free

• It cannot be used for wages

• Interest rates are variable

• It is a fixed form of borrowing

What should a business have to increase the likelihood of getting a loan from a bank?

• A cash flow forecast

• A large inventory

• A high number of employees

• A low gearing ratio

What is the purpose of trade credit?

• To provide immediate cash

• To secure a loan

• To increase inventory

• To delay payment without interest