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Sources of finance

Total questions: 16

Worksheet time: 10mins

Name
Class
Date
1.

This is the cash that is generated by the business when it operates successfully

a)

Retained profits

b)

Share capital

c)

Angel investor

d)

Owner savings

2.

Which is an example of an internal source of finance?

a)

Owners' Funds

b)

Trade credit

c)

Leasing

d)

Grants

3.
Which is an example of an external source of finance?
a)
Owners' Funds
b)
Sale of assets
c)
Retained profits
d)
Bank loan
4.
What is an advantage of owners' funds?
a)
There will be little or no interest
b)
You can pay in smaller installments
c)
They take a long time to arrange
d)
You don't have to pay it back
5.

The money that is necessary to pay for the daily running of the business.

(a)  

6.

What is the most likely source of finance for a small firm?

a)

A debenture

b)

Issuing shares

c)

A bank loan

7.

Which of the following statements about bank loans is not true?

a)

Preferable for short time duration

b)

Interest rates make the loan more expensive

c)

Easy to get

d)

Usually cheaper than consistently using a bank overdraft

8.

Case study: Apple plans to develop a prototype for an iPhones with a flexible display. Which of the following sources of finance would be most appropriate?

a)

Retained profits

b)

Selling shares

c)

Bank loan

9.

This is the cash that is generated by the business when it operates successfully

a)

Retained profits

b)

Share capital

c)

Angel investor

d)

Owner savings

10.

Select that is not an example of working capital.

a)

cash

b)

receivables

c)

inventory

d)

land and building

11.

A firm with slow sales turnover, credit sales or a firm during peak season will require ___ working capital

a)

more

b)

less

12.

Which of the following is not a feasible source of finance for a sole trader.

a)

Trade Credit

b)

Share capital

c)

Leasing

d)

Loan

13.

The original sales of a company's shares on a listed stock exchange.

(a)  

14.

Which is not an external source of finance for a public limited company?

a)

Bonds

b)

Overdraft

c)

Retained Profits

d)

Share Capital

15.

Which is best described as loan capital?

a)

Debentures

b)

Debt factoring

c)

Equity finance

d)

Ordinary share capital

16.

Wealth entrepreneurs who risk their own money by investing in small to medium sized businesses that have high growth potential.

(a)