Theme 2 - 2.1-2.4 Revision Qs

Which of the following is NOT a source of external finance for businesses?

• Family and friends

• Retained profit

• Business angels

• Banks

What type of finance involves obtaining funds from investors in exchange for a share of the company?

• Loans

• Overdrafts

• Share capital

• Leasing

Which of the following is considered a method of internal finance?

• Venture capital

• Trade credit

• Sale of assets

• Crowdfunding

What is a potential implication of having unlimited liability in a business?

• Increased investment from venture capitalists

• Personal assets are at risk

• Easier access to trade credits

• Lower interest rates on loans

Which of the following is NOT a use of a cash-flow forecast?

• Planning business expenditures

• Determining dividend payments

• Predicting future financial positions

• Calculating exact profit margins

What is the primary purpose of sales forecasts in business?

• To determine employee performance metrics

• To predict future sales based on various factors

• To calculate the total cost of goods sold

• To set up company policies

What does the break-even point represent in financial planning?

• The point where total fixed costs exceed total revenue

• The point where total variable costs are minimized

• The point where total fixed costs plus total variable costs equal total revenue

• The point where profit begins to decrease

Which type of budget involves starting from a base of zero and justifying every expense?

• Incremental budget

• Historical figures budget

• Zero-based budget

• Flexible budget

What is the purpose of variance analysis in budgeting?

• To determine the accuracy of sales forecasts

• To compare budgeted amounts to actual amounts

• To calculate the total revenue

• To set financial goals for future periods

Which of the following is NOT a component of a profit calculation?

• Gross profit

• Operating profit

• Net profit

• Revenue growth