Finance Quiz

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

• Bank overdraft

• Leasing

• Retained earnings

• Debentures

What is the typical repayment period for short-term finance?

• Less than 1 year

• 1–5 years

• 5–10 years

• Over 10 years

Which source of finance allows a business to spend more than it has in its current account?

• Bank loan

• Trade credit

• Bank overdraft

• Hire purchase

Trade credit means:

• Buying goods and paying immediately

• Buying goods now and paying later

• Selling goods on discount

• Receiving early payment

One disadvantage of a bank overdraft is:

• High interest rates

• Low flexibility

• Long repayment period

• No collateral required

A business that delays paying its suppliers is using:

• Hire purchase

• Trade credit

• Leasing

• Factoring

Factoring is:

• Selling debts to a finance company for immediate cash

• Borrowing from a bank

• Selling shares

• Renting equipment

A key advantage of short-term finance is:

• It’s quick to access

• It’s interest-free

• It’s suitable for expansion projects

• It requires long-term collateral

What is the usual time frame for medium-term finance?

• Less than 1 year

• 1–5 years

• 5–10 years

• Over 10 years

Which of these is a medium-term source of finance?

• Hire purchase

• Bank overdraft

• Retained profits

• Debentures