WorksheetsIGCSE business studies section 5 MCQ
Total questions: 25
Worksheet time: 3600secs
Businesses need finance for:
investment in other businesses
the purchase of non-current assets
improving their bank balance
increasing credit to customers.
Which of the following is an internal source of finance?
Debenture
Share issue
Retained profit
Overdraft
The best source of finance for the purchase of a motor vehicle is:
mortgage
overdraft
leasing
working capital.
Which of the following is a benefit of using internal sources of finance?
Interest rates are low.
It is always available.
It is less costly than external sources.
It is more costly than external sources.
An advantage of equity financing is that:
it is available to all types of business
it does not have to be repaid
it has no cost to the business
interest payments are low.
Micro-finance is usually for:
entrepreneurs in developed economies who are able to borrow from banks
when an entrepreneur needs a large amount of capital at low interest rates
entrepreneurs in developing economies who are unable to borrow from other lenders
established businesses in developing economies.
A cash-flow forecast shows the:
timing of cash inflows and outflows over a period of time
amount of cash a business earns from sales
amount of profit a business earns over a period of time
amount of cash a business has in its bank account
A short-term cash shortage might be financed by:
not paying employees’ wages
reducing dividend payments to shareholders
taking out a bank loan
offering discounts to credit sales customers.
A business can improve its working capital by:
increasing sales
reducing inventories
increasing credit terms to customers
paying trade payables sooner than it needs to
Working capital measures:
business profitability
business efficiency
business liquidity
business productivity
The difference between gross profit and profit is:
costs of sales
taxation
expenses
interest on borrowing
Profit is:
total costs less revenue
revenue less costs of sales
revenue less fixed costs
revenue less total costs.
Profit is important to businesses because:
it improves businesses, cash balances
it can be used to measure business size
it is a measure of businesses, success
businesses need to pay taxes to the government.
The appropriation account of an income statement:
shows how profit is to be distributed between the business and the government
shows how profit is to be distributed between stakeholders
shows how profit is to be distributed between owners and the business
shows how profit is to be distributed between shareholders and stakeholders.
Profit is the reward to the owners/shareholders of a business for:
working hard
lending money to the business
being an entrepreneur
risking their investment in the business.
An asset is something which a business:
owes
owns
borrows
lends
An example of a current asset is:
machinery
buildings
profit
inventories.
Which of the following is not a current liability?
Overdraft
Bank loan
Trade payables
Taxation not yet paid
Current assets and current liabilities can be used to measure:
profitability
productivity
liquidity
business performance.
Shareholders’ funds include:
share capital and taxation
retained profit and dividend payments
share capital and retained profits
retained profit and taxation
The following financial data has been extracted from the income statement and the statement of financial position of a company.
Use the table above to identify the correct value for:
The gross profit margin
1
50%
2
66.6%
The following financial data has been extracted from the income statement and the statement of financial position of a company.
Use the table above to identify the correct value for:
The current ratio
1
50%
2
66.6%
The following financial data has been extracted from the income statement and the statement of financial position of a company.
Use the table above to identify the correct value for:
The return on capital employed
1
50%
2
66.6%
The following financial data has been extracted from the income statement and the statement of financial position of a company.
Use the table above to identify the correct value for:
The acid test ratio
1
50%
2
66.6%
The following financial data has been extracted from the income statement and the statement of financial position of a company.
Use the table above to identify the correct value for:
The profit margin
1
50%
2
66.6%
