Lesson 2.1.2b
2.1.2b Methods of finance Quiz: Pearson Edexcel Business, Unit 2
20 questions
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Lesson 2.1.2b, Methods of finance: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 2: Managing business activities, written with Revision Ninja.
Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.
The 20 questions
-
What best describes a bank loan as a method of finance?
- Supplier payment delay
- Permanent share purchase
- Fixed sum borrowed
- Unplanned overspending facility
-
What is share capital as a method of business finance?
- Government financial grant
- Selling company equity
- Short-term bank debt
- Supplier payment delay
-
Venture capital is most commonly used to finance which type of business?
- Declining franchises
- High-growth start-ups
- Low-risk sole traders
- Public sector services
-
What is the primary feature of a bank overdraft facility?
- Interest-free capital grant
- Flexible short-term borrowing
- Permanent equity funding
- Long-term asset financing
-
Which agreement allows a business to use an asset without purchasing it outright?
- Venture capital
- Trade credit
- Leasing
- Share issue
-
Which method of finance involves credit from a supplier?
- Grant
- Trade credit
- Share capital
- Venture capital
-
A business leases a delivery van for £400 a month. What is the total cost over one year?
- £4,800
- £1,200
- £9,600
- £400
-
How is interest charged on a bank overdraft facility?
- At fixed rate
- On amount overdrawn
- On full limit
- No interest charged
-
What financial obligation is avoided by issuing share capital?
- Tax liabilities
- Loan repayments
- Dividend payouts
- Interest payments
-
Which feature distinguishes a business grant from a standard bank loan?
- Equity is surrendered
- Daily interest charged
- Collateral is required
- No repayment required
-
Which method of finance best solves a temporary, short-term cash flow deficit?
- Bank loan
- Venture capital
- Bank overdraft
- Share capital
-
What must a business pay on a bank loan regardless of profit?
- Retained profit shares
- Fixed interest repayments
- Trade credit fees
- Variable equity dividends
-
A business needs an asset that will be used for three years but does not want to pay for it all at once. Which method is most suitable?
- Trade credit
- Grant
- Leasing
- Share capital
-
Which method of finance gives the business the benefit of a loan without the owners giving up any shares?
- Share capital
- Bank loan
- Venture capital
- Business angel investment
-
Which source of short-term finance allows a business to buy inventory now and pay later?
- Bank overdraft
- Trade credit
- Hire purchase
- Debt factoring
-
A firm with a long-term project needs finance that will be repaid over five years. Which method is most suitable?
- Sale of stock
- Overdraft
- Bank loan
- Trade credit
-
Which method is most likely to suit a PLC that wants long-term funding without borrowing?
- Trade credit
- Share capital
- Leasing
- Overdraft
-
Why is an overdraft usually more expensive per unit borrowed than a long-term loan?
- Arrangement dividend
- Legal setup costs
- Required equity stake
- Higher interest rate
-
What do venture capitalists take in a business in exchange for funding?
- An equity stake
- Government bonds
- Fixed interest
- Collateral assets
-
What return on investment do shareholders receive from company profits?
- Trade credit
- Capital repayments
- Dividends
- Fixed interest
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