Sources of Finance Multiple Choice Questions – Highlight the Correct Answer

1. Define ‘owner’s funds’.

a. Mortgage
b. Savings
c. Bank Loan
d. Trade Credit
2. What is meant by retained profit?
a. Profit put in a big container
b. Profit left over after all taxes, wages and salaries have been paid
c. Profit before all taxes, wages and salaries have been paid
d. Money that can be used for braces put on by the dentist
3. What is meant by the term “security” in financial terms?
a. When big men in black suits defend you and your business
b. When you sign a contract with a creditor that he can repossess one
of your assets should you be unable to pay them
c. When you have enough money you feel safe and securely in profit
d. When you take your money to the bank and deposit it in a secure
safe
4. What is a mortgage?
a. A long term loan of usually over 25 years that is unsecured
b. A long term loan of usually over 25 years that is secured but you
pay no interest
c. A long term loan of usually over 25 years that is secured with
interest payments
d. A short term loan of that is secured on your house
5. What is meant by trade credit?
a. When you pay for a good, they need payment before they let you
take the goods
b. When you pay for a good, they do not require payment until much
later
c. It’s when your business has lots of cash in the bank
d. It’s when your business has a good name, or in other words
creditability is high