Finance & Accounting - Grade 11

Sufficient working capital is needed to prevent a business from becoming illiquid.

• True

• False

The _________ is a measure of liquidity which excludes _______.

• Current ratio, trade receivable

• acid test ratio, trade receivable

• Current ratio, inventory

• acid test ratio, inventory

These are the examples of long term finances, except ______

• bank overdraft

• bank loan

• leasing

• debentures

sale and leaseback of non-current assets is an example of external sources of finance

• True

• False

Issuing share capital is an appropriate way to raise finance for a sole trader

• True

• False

Which one of these ratios is used to measure profitability?

• Gross profit margin

• Current ratio

• Working capital

• Acid test

State the accounting equation

Example of non-current asset is _______

• Cash at bank

• Inventory

• Bank overdraft

• Machineries

The formula of BEP is _____

• Fixed cost / contribution per unit

• Fixed cost / variable cost

• Fixed cost / selling price

• Fixed cost / total contribution

These are the ways to improve current ratio, except _____

• Obtain long term loan

• Sell of fixed assets for cash

• Sell off inventories for cash

• Owner invests more money into the business