Which of the following is a current liability?

  • A mortgage
  • Leasing a vehicle
  • Bank loan
  • Staff wages

What financial document summarises a company's revenues, costs, and expenses over a specific period?

  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Statement of Retained Earnings

Which term describes how quickly a business has access to its money?

  • Revenue
  • Assets
  • Liquidity
  • Cash Flow

What is the main purpose of an income statement?

  • To show the financial position of a company at a specific point in time
  • To provide a summary of cash inflows and outflows
  • To measure the profitability of a company over a specific period
  • To detail the changes in equity during a specific period

What is meant by a "dividend"?

  • A portion of profits paid to shareholders
  • Part-ownership of a business
  • The sale of additional shares in a business
  • An annual meeting of shareholders

Which of the following is an advantage of an entrepreneur investing their own savings into a business?

  • The business is limited liability
  • If the business fails, their savings are safe
  • There is no cost to the business
  • The entrepreneur is guaranteed a return on their investment

Which of the following is not a valid business investment?

  • Purchasing a more efficient machine
  • Purchasing a new sign for the shop front
  • Developing a new product
  • Selling unused manufacturing equipment

Which of the following is an advantage of calculating the annual rate of return?

  • Provides a clear and easy to understand percentage value
  • Easy to compare the potential returns of different investments
  • It considers the entire investment period
  • The estimated annual profits from the investment are used

How might a business mitigate short-term negative cash flow?

  • Pay its bills early
  • Use an overdraft
  • Offer shorter trade credit periods to customers
  • Make staff redundant

Which of the following is not a valid start-up cost for a new business?

  • Purchasing stock
  • Advertising on social media
  • Developing new products
  • Implementing an extension strategy