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WorksheetsNational 5 Business - Finance Quiz
Total questions: 40
Worksheet time: 21mins
What is the finance department responsible for?
looking after employees
communicating with customers
manufacturing the products
managing the business finances
What is a bank overdraft?
plastic card which authorises payments
sum of money borrowed for a property
limit placed on your bank account which allows you to take out more that you have in it
money kept back every year from profits and reinvested in the business
Which of the following is not an advantage of a bank loan?
interest charged
repaid in instalments
arranged relatively quickly
repaid over a period of time
Which of the following is not a disadvantage of a grant?
doesn't need to be repaid
may not be awarded it
need to meet criteria
not the largest amount of money
Which source of finance is only for limited companies?
bank loan
share issue
mortgage
venture capital
Which source of finance is best for high potential start up businesses?
bank loan
loan from family and friends
venture capital
savings
Mark is needing to purchase a new van, which source of finance would you suggest?
bank loan
mortgage
hire purchase
debenture
Aimee has just received an unexpected bill, which source of finance would you suggest?
savings
retained profits
bank loan
bank overdraft
What is a cash budget?
shows the profit made by a business
shows at which point the business covers its costs
forecast of future receipts and payments
shows the value of the business at a particular date
Which of the following is a cause of cash flow problems?
increasing sales
taking out a bank loan
purchasing new computers for all employees
choosing a cheaper supplier
One months closing balance is the next months what?
money in
sales receipts
cash out
opening balance
What is the ideal situation for a business to be in?
cash in = cash out
cash in < cash out
cash in > cash out
Why prepare a cash budget?
calculate cost of sales
highlight periods of a negative balance
calculate profit
set targets
If you know you were about to experience cash flow problems what would you arrange?
source of finance
increase sales
cut costs
fire employees
Cost of supplies are increasing month on month - how could you solve this problem?
hold a sale and get rid of stock
take out a bank loan to cover increasing costs
look for a cheaper supplier
offer customers discounts
Sales have been decreasing for several months now - what would you advise the business does?
look for a cheaper supplier
hold a sale to encourage customers to shop
take out a bank loan
open up a new shop
What is the break even point?
point at which sales > costs
point at which sales < costs
point at which sale = costs
What are fixed costs?
costs which vary in line with production
costs which stay the same regardless of production levels
costs incurred by the customer
Which of the following is an example of variable costs?
rent
loan repayments
salaries
electricity
How are total costs calculated?
Fixed Costs + Variable Costs
Fixed Costs - Variable Costs
Sales - Fixed Costs
Sales - Variable Costs
Prior to the break even point, is the business making a profit or a loss?
profit
loss
What is a disadvantage of breakeven analysis?
allows the business to see how many products it needs to sell to make a profit
allows the business to calculate its costs
allows the business to make decisions to improve its profitability
allows the business to only see such calculations for one product at a time.
A line which starts from 0 and goes diagonally across a breakeven chart would likely be?
fixed costs
total costs
sales revenue
What is the variable cost per unit if at 100 units the variable costs = £1000?
1000
100
10
1
What is an income statement?
shows the businesses cash flow
shows how much money the business has borrowed
shows the value of the business
shows the profit or loss made by a business
How are cost of sales calculated?
(opening inventory - closing inventory) + purchases
(opening inventory + purchases) - closing inventory
(purchases + closing inventory) - opening inventory
(closing inventory - opening inventory) + purchases
What is the gross profit?
overall profit made
money from sales
profit from selling goods
Which of the following is an example of an expense?
purchases
sales
inventory
wages
The title for the final line of an income statement should read...
Net Profit
Gross Profit
Total Profit
Profit for the Year
Which of the following is not a reason for preparing an income statement?
calculate profit
calculate expenses
tax reasons
to make corrective action
Which of the following businesses are legally required to publish their income statement?
sole trader
partnership
limited companies
charities
How is profit calculated?
Sales - Expenses
Gross Profit - Expenses
Cost of Sales - Expenses
Sales - Cost of Sales
What technology would be used to remind customers to pay bills?
word processing
powerpoint
spreadsheets
What technology allows businesses to present their financial information in a meeting?
database
word processing
powerpoint
What would be stored on a database?
customer details
suppliers details
employee details
stock information
Word processing would be likely used to...
create a businesses annual reports
create income statements
create charts and graphs
store customer information
What would the finance department use the internet for?
creating charts
presenting information
online banking
calculating profits
Which software is best for preparing income statements?
database
word processing
powerpoint
spreadsheets
Which of the following is not a benefit of using spreadsheets?
calculations automatically done for you
replicate cells
save and edit later
software can be expensive
Why might finance departments increasingly use technology?
saves paper copies
confidentiality/privacy
reduces errors
saves time and workload
