Worksheetssources of finance
Total questions: 42
Worksheet time: 21mins
What does internal source of finance mean?
A source from within the business
A source from outside the business
What does external source of finance mean?
A source from within the business
A source from outside the business
Which is an example of an internal source of finance?
Owner's Capital
Venture Capitalist
Overdraft
Trade credit
Which is an example of an external source of finance?
Owner's capital
Hire Purchase
Retained profits
Sale of assets
Which is an example of an external source of finance?
Owners' Funds
Sale of assets
Retained profits
Bank loan
What is an advantage of owner's capital?
There will be interest
You can pay in smaller installments
They take a long time to arrange
You don't have to pay it back
What is an advantage of an overdraft?
There is never interest
You can pay in smaller installments
Useful for relatively small sums and short term finance
You don't have to pay it back
Which of these facts about venture capitalists is NOT true?
Venture capitalists tend to operate in fairly risky markets
Venture capitalists would be paid a share of the profits
Venture capitalists usually provide money only and have no interest in running the business
Venture capitalists usually invest large sums of money
Which of the following are DISADVANTAGES of selling shares as a source of finance? (select as many as appropriate)
It means limited liability for the owners
Dividends need to be paid to shareholders
Large sums of money can be raised
Does not apply to Partnerships or Sole Traders
Which of the following would be the most appropriate source of finance for a new business (which is just launching) that makes mobile phone accessories?
Retained Profit
Sale of Assets
Share Capital
Friends and family
This is the cash that is generated by the business when it operates successfully
Retained profits
Share capital
Angel investor
Owner savings
An amount of money that is paid back within an agreed amount of time, with interest
Bank loan
Angel investment
Overdraft
Retained profit
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
This is the cash that is generated by the business when it operates successfully
Retained profits
Share capital
Angel investor
Owner savings
An amount of money that is paid back within an agreed amount of time, with interest
Bank loan
Angel investment
Overdraft
Retained profit
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
Funds that are required to purchase fixed assets like land and building, plant and machinery, and furniture and fixtures is known as
fixed capital
working capital
Select the working capital examples
cash
receivables
inventory
land and building
Name the investors who get priority over equity shareholders while paying dividend and repayment of capital
preference shareholders
debentureholders
retained earnings
This is the cash that is generated by the business when it operates successfully
Retained profits
Share capital
Angel investor
Owner savings
Explain the word in the image
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
