Accounting 13/11/24

Which of the following is a primary characteristic of a sole trader?

• Shared ownership

• Limited liability

• Ownership by one person

• Separate legal entity

A major disadvantage of a sole trader business is:

• Unlimited liability

• Complex financial statements

• Limited capital requirement

• Low control by the owner

Which of these is an advantage of a partnership?

• Full control for each partner

• Unlimited liability

• Shared decision-making

• Limited access to capital

The key difference between a private limited company and a public limited company (plc) is:

• The number of owners allowed

• The ability to trade shares on a stock exchange

• Limited liability status

• The type of products they can sell

In a limited company, the liability of shareholders is:

• Limited to their personal assets

• Limited to their unpaid shares

• Unlimited

• Limited to the company's total assets

Which of the following types of finance is most likely to be available to sole traders and partnerships?

• Issue of shares

• Secured loans

• Trade credit

• Bond issuance

Which of the following would be considered a secured loan?

• Personal loan

• Loan backed by collateral

• Bank overdraft

• Trade credit

A business takes out a bank overdraft. This means:

• It can withdraw more money than it has in its account

• It borrows a fixed amount at a set interest rate

• It receives payment in installments

• It leases equipment instead of purchasing it

Trade credit is typically used by businesses for:

• Short-term financing for buying goods or services

• Buying machinery

• Long-term expansion projects

• Paying employees

Which of the following is NOT an advantage of limited companies?

• Access to wider sources of finance

• Limited liability

• Shared profits among all stakeholders

• Ability to raise capital through shares