WorksheetsS5 Review Materials - Finals
Total questions: 30
Worksheet time: 15mins
What factors influence the choice of finance when businesses with existing borrowings find it difficult to secure additional loans due to the increased perceived risk?
Size and legal form of business
Amount required
Length of time
Existing borrowing
What factors influence the choice of finance, indicating that the longer the borrowing period, the higher the cost due to accrued interest payments?
Size and legal form of business
Amount required
Length of time
Existing borrowing
What factors influence the choice of finance, making it more challenging for sole traders and partnerships to borrow from banks and other lenders because they are perceived as being at a higher risk of not being able to repay the borrowed money?
Size and legal form of business
Amount required
Length of time
Existing borrowing
What factors influence the choice of finance, with businesses needing large capital amounts opting for share issues and debentures? In contrast, are those requiring smaller capital amounts better suited for bank loans, leasing, and hire purchases?
Size and legal form of business
Amount required
Length of time
Existing borrowing
A financing alternative involves large corporations and affluent individuals supporting a business concept by securing modest capital contributions from a broad audience, typically facilitated through online platforms and social media networks.
Microfinance
Government Grants
An alternative source of finance where small amounts of capital loaned to entrepreneurs in countries where business finance is often difficult to obtain.
Microfinance
Government Grants
An external source of finance where the government support business in their country by providing grants and other financial assistance.
Microfinance
Government Grants
Which of the following is NOT a benefit of Equity Financing?
Money has never been repaid.
Does not change the ownership of the company.
There is no ongoing cost.
If the business makes a loss, it does not have to pay dividend to shareholders.
Which of the following is considered a limitation of debt financing?
Interest is changed on the amount borrowed and this increases business costs.
The amount borrowed must be repaid.
Interest must be paid even if the business makes a loss.
All of these
A long-term loan used for the purchase of land or buildings.
Bank Loan
Mortgage
Debenture
Hire Purchase
A bond issued by a company to raise long-term finance usually at a fixed rate of interest.
Bank Loan
Mortgage
Debenture
Hire Purchase
Provision of finance by a bank which the business will repay with interest over an agreed period of time
Bank Loan
Mortgage
Debenture
Hire Purchase
The purchase of an asset by paying a fixed repayment amount per time period over an agreed period of time.
Bank Loan
Mortgage
Debenture
Hire Purchase
Obtaining the use of non-current asset by paying a fixed amount per time period for a fixed period of time. This is usually paid quarterly.
Leasing
Share Issue
Debenture
Hire Purchase
A source of permanent capital available to limited liability companies. No interest has to be paid.
Leasing
Share Issue
Debenture
Hire Purchase
A short-term external finance source which involves enhancing business liquidity by selling trade receivables.
Debt Factoring
Trade Credits
Overdraft
Breakeven
A financing source where the supplier effectively extends credit by providing funds for the cost of goods throughout the agreed credit period.
Debt Factoring
Trade Credits
Overdraft
Breakeven
It is an agreement with the bank that allows a business to spend more money than it has in its account up to an agreed limit.
Debt Factoring
Trade Credits
Overdraft
Breakeven
An example of internal source of finance which is represented by the company's liquidity, which pertains to the funds available in its bank account or readily accessible at any given moment.
Retained Profit
Use of Work Capital
Sales of Non-current Assets
Owner's Savings
An example of internal source of finance where a sole trader or members of a partnership can put their savings into their unincorporated businesses.
Retained Profit
Use of Work Capital
Sales of Non-current Assets
Owner's Savings
These are profits remaining after all expenses, tax, and dividends have been paid.
Retained Profit
Use of Work Capital
Sales of Non-current Assets
Owner's Savings
Which type of production are single specialist units produced?
Flow production
Job production
Lean production
Which type of production are several identical products completed at each production stage?
Flow production
Job production
Lean production
Workers' salary is an example of ___________.
Variable Cost
Fixed Cost
Average Cost
Total Cost
Raw materials are example of ___________.
Variable Cost
Fixed Cost
Average Cost
Total Cost
What is the formula in finding the total cost?
Total Cost = Fixed Cost / Variable Cost
Total Cost = Fixed Cost + Variable Cost
Total Cost = Fixed Cost - Variable Cost
Total Cost = Fixed Cost * Variable Cost
Which of the following is NOT the reason why businesses relocate their operations?
Reduce the production cost
Avoid legal barriers
Achieve growth
Locate production closer to the market
What is the difference between capital expenditures and revenue expenditures?
Which of the following is a task of quality control supervisor?
What is the definition of production?
