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Worksheetssource of finance
Total questions: 18
Worksheet time: 9mins
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
What is an advantage of a business using owner's capital as a source of finance?
Very low rate of interest
It will bring new skills to the business
It doesn't need repaying
Repayment is always spread over a period time
What type of finance involves less profit going to the owners?
Retained profit
Sale of assets
Overdraft
Owner's capital
What source of finance could lead to an unwanted takeover of the business?
Sale of assets
Owner's capital
Trade credit
Share issue
Who are known as residual owners?
preference shareholders
equity shareholders
Name the investors who get priority over equity shareholders while paying dividend and repayment of capital
preference shareholders
debentureholders
retained earnings
Which capital is known as risk capital?
Preference share capital
equity share capital
Funds can be raised through equity issue without creating any charge on the assets of the company.
true
false
Select that is not an example of working capital.
cash
receivables
inventory
land and building
Which of the statements about retained profits is false?
You do not have to pay interest
Ideal for new businesses
Shareholders and employees could be frustrated because there is less profit to be 'shared out'
You are free to use it for any purpose
What is an advantage of Retained profit
satisfaction
No financial cost
Shareholders can get more dividend
You need to pay interest
Q.2 Which of the following is true?
(a) Retained Earnings are cheaper than External Equity
(b) Retained Earnings are costlier than External Equity
(c) Equity Retained earnings are cost free
(d) External Equity is cheaper than Internal Equity
Retained earnings in business are
owner's fund
creditor's fund
borrowed fund
Which source of finance leads to dilution of management's control over the business?
Retained earnings
Preference shares
Debentures
Equity shares
public deposits are raised directly from
the public
the owners
the directors
the auditors
funds raised through debentures and loans are called
owner's capital
borrowed capital
retained earnings
share capital
Expand GDR
Global domestic receipt
Government Direct Receipt
Global Depository Receipt
