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WorksheetsBusiness 1.3 & 1.4 - Revision
Total questions: 70
Worksheet time: 41mins
What is the most likely source of finance for a small firm?
A debenture
Issuing shares
A bank loan
What is the most likely source of finance for buying property?
Mortgage
Factoring
A bank loan
What is the most likely source of finance for buying a new IT system?
Mortgage
Factoring
A bank loan
What of the following is a source of internal finance?
Selling assets
Trade credit
A bank loan
This is the cash that is generated by the business when it operates successfully
Retained profits
Share capital
Angel investor
Owner savings
Which of the statements about retained profits is false?
You have unlimited amounts of money available
Shareholders and employees could be frustrated because there is less profit to be 'shared out'
You do not have to pay interest
You are free to use it for any purpose
Which of the following is NOT usually considered a personal source of finance.
Savings
Redundancy payments
Crowdfunding
Credit card
Which of the following statements about personal sources of finance is false?
Often cheaper in the long-term
Less 'red tape' or delay in getting the cash
Less personal financial risk for the entrepreneur
May be harder to raise large amounts
An amount of money that is paid back within an agreed amount of time, with interest
Bank loan
Angel investment
Overdraft
Retained profit
Which of the following statements about bank loans is not true?
Usually used for large amounts of money that need to be paid back over a longer time-frame
Interest rates make the loan more expensive
Easy to get
Usually cheaper than consistently using a bank overdraft
A short-term source of finance from a bank that usually is only used in an emergency/when needed
Overdraft
Loan
Share capital
Credit card
Which of the following statements about overdrafts is not true?
Short term source of finance
It's really a small, short term loan
It's flexible, in that it can be used whenever it is needed
Cheap - the interest rate is usually lower than that of a long-term bank loan
Case study: after years of success and growth, Shark Tank success story Lumibowl (a clip-on light that illuminates your toilet bowl so you 'hit your target' in dark of night!) is ready to grow extensively into other countries. It needs huge amounts of money in order to do so. Which source of finance would be a good fit?
Raising share capital by transforming from a partnership to a public corporation
Taking advantage of the agreed overdraft with the bank
Retained profits of $80,000
Crowdfunding
Cash flow is a planning tool.
True
False
What does cash flow measure?
Inflows and Outflows
How much is in your bank account each month
Profit
Break Even point
Net Cash Flow is...
the difference between outflows and inflows
the difference between opening balance and closing balance
the difference between fixed and variable costs
Inflows - Outflows
To work out the closing balance of each month we must...
Opening balance + Net Cash Flow
Closing balance + Net Cash Flow
Opening balance + Inflows
Opening balance + (Inflows - Outflows)
Which of the following are considered inflows?
Revenue
Rent from owned properties
Wages
Electricity
What number should go where the blue box is?
-10
-20
20
10
What number should go where the blue box is?
-10
-20
20
10
A builder may experience what affects on cash outflows?
Business only needs to settle bills once a month
Can't delay full staff wages
Money for materials and labour is needed regularly
Payment will out be received at the end of the project
If you have a negative bank balance which of the following could be a solutions?
overdraft
small loan
pay more outflows
increase your inflows
Disadvantage of a Sole trader:
Expensive to create
Hard to employ people
Doesn't generate much profit
Unlimited liability
An advantage of operating as a sole trader...
Owner receives all profit
No need to pay tax
Investment from shareholders
Cheaper advertising
Business ownership in which 2 or more people share assets, liabilities, and profit
Sole Trader
Partnership
Public limited company
Private limted company
A company with limited liability
Sole Trader
Partnership
Public limited company
Private limited company
True or false: If a business has unlimited liability, the owners personal possessions are at risk if the business falls into debt.
True
False
Target customers can be
grouped in interests
grouped in religion
grouped in income
all of the above
Packaging is part of what P?
Product
Place
Promotion
Price
Tick the boxes that are market segments
Age
Location
Promotion
Income
Hair and eye colour
Which P is not in the Marketing MIx?
place
people
price
promotion
General impression of a produce held by consumers (?)
brand image
brand
product
customer loyalty
The marketing mix can also be called ...
the 4 C's
the 4 P's
the 4 E's
Price refers to ...
how much people will pay for the product.
where the product will be sold.
how the business tells people about the product.
£10,000 in sales revenue, £5,000 in expenses....how much profit did we make?
£0.00
£2,500
£5,000
£10,000
Which of the following statements is true about business plans?
Every business that produces a business plan will be successful
Producing a business plan can help an entrepreneur secure finance from a bank
Business plans are always fully accurate
Once produced, business plans should be rarely referred to by the business owner
Which two of the following are features of a private limited company?
It has unlimited liability
Its shares can be sold to the general public
Shareholders own the business
Accounts are kept fully private
A new business start-up has produced a business plan and estimates that its profit in March
will equal £500. Its total costs are expected to amount to 45% of its profit.
725
800
700
715
