What is a liquid asset?

As asset that can easily be changed into cash

Money paid to shareholders when profit is distributed

Which of the following is not true about hire purchase?

The goods are legally yours when the first payment is made

Which of the following are factors that affect which source of finance is suitable?

Cost, use of funds, risk and size

What is share capital?

Money raised by limited companies from selling shares

Does government finance ever have to be repaid?

Yes, sometimes low rate loans are given that must be repaid

How are Net Assets calculated?

Total Assets - Total Liabilities

How is Working Capital calculated?

Current Assets - Current Liabilities

In a balance sheet, what are Drawings?

Money taken from the business by the owner to spend

Which figures balance in a balance sheet?

Net Assets and Capital Employed, Net Assets and Closing Capital

Which of the following does not lead to problems with working capital?

Getting an overdraft or short term loan

What is a balance sheet used for?

To summarise at a point in time assets liabilities & capital, To show how things bought balance with things owed, To provide a snap shot of a firm's financial position, All of these

What is the definition of retained profit?

Profit held by a firm at the end of the year, not by owners

What is trade credit?

Buying resources now and paying for them later

Capital raised from loans in relation to raised from shares

What is short term finance?

Money borrowed for one year or less

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IGCSE BS FINANCE KEY TERMS

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Key terms quiz for IGCSE Business Studies Section 3, Accounting & Finance.

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Questions 25

Answers

1
What is a liquid asset?
As asset that can easily be changed into cash
A fixed asset that cannot easily be changed into cash
2
Sales Revenue - Cost of Sales = what?
Net Profit
Net profit after tax
Gross Profit
Retained Profit
3
What is a dividend?
When profits are shared between partners
Money paid to shareholders when profit is distributed
Money paid to a franchisor by a franchisee
Money paid to stakeholders when profit is distributed
4
Which of the following is not true about hire purchase?
A down payment/deposit is usually made
The balance is paid in monthly installments
The goods are legally yours when the first payment is made
It can be short and long term
5
Which of the following are factors that affect which source of finance is suitable?
Risk, size, day of the week
Cost, use of funds, risk and size
Cost, use of funds, personal preference
None of these answers
6
What is special about a mortgage?
All of these
It is used to buy land
It is used to buy property
It is taken out over a very long period of time
7
What is share capital?
Money raised by limited companies from selling shares
Money raised by sole traders from selling shares
8
Which of the following is not an Internal Source of Finance?
Working Capital
Bank Loan
Retained Profit
Sale of Assets
9
Does government finance ever have to be repaid?
Yes, sometimes low rate loans are given that must be repaid
No, it is always free money
10
How is Net Cash Flow calculated?
Cash Inflows - Cash Outflows
Working Capital + Starting Balance
Working Capital + cash outflows
Cash Inflows + Cash Outflows
11
How are Net Assets calculated?
Current Assets - Current Liabilities
Total Assets + Total Liabilities
Total Assets - Total Liabilities
Current Assets + Current Liabilities
12
Which of the following is NOT a fixed cost?
Rent
Machinery
Insurance
Raw materials
13
How is Working Capital calculated?
Current Liabilities x Current Assets
Current Assets + Current Liabilities
Current Assets - Current Liabilities
Current Liabilities - Current Assets
14
In a balance sheet, what are Drawings?
Annotations by the auditor
Money owed
Money taken from the business by the owner to spend
Tables of data
15
Which figures balance in a balance sheet?
Working Capital and Closing Capital
Current Assets and Current Liabilities
Net Assets and Capital Employed
Net Assets and Closing Capital
16
Which of the following are short term sources of finance?
Venture capitalist
Debentures
None of these
Mortgage
17
Which of the following does not lead to problems with working capital?
Buying more fixed assets
Unexpected tax bill
Getting an overdraft or short term loan
Drop in sales
18
Breakeven is the point at which....
Total Revenue = Fixed Costs
Total Revenue = Variable Costs
Total Revenue = Total Costs
None of these
19
What is a balance sheet used for?
To summarise at a point in time assets liabilities & capital
To show how things bought balance with things owed
To provide a snap shot of a firm's financial position
All of these
20
Which of the following is not an advantage of budgeting?
Efficiency improvements
Motivation for employees
Guaranteed profits
Reduction in fraud
21
What is the definition of retained profit?
Profit held by a firm at the end of the year, not by owners
Profit returned to owners at the end of the year
A negative profit figure
Profit made by a business at the end of the year
22
Is an overhead an example of a direct or indirect cost?
Indirect Cost
Direct Cost
23
What is trade credit?
Buying resources now and paying for them later
Buying resources on a credit card
Giving a trader a compliment
A compliment from a trader
24
What is gearing?
Capital raised from loans in relation to raised from shares
Capital raised from selling vehicles
How fast a source of finance is approved
Using specialists to invest in your business
25
What is short term finance?
Money borrowed for one year or less
Money borrowed for more than one year

IGCSE BS FINANCE KEY TERMS Flashcards | StudBud