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6. What is an advantage of credit cards?

  • allows a business to spread payment after a deposit is payed
  • interest free
  • convenient and flexible
  • cheap way of raising finance

7. What is an overdraft?

  • money given to you by the bank
  • profit that has not been returned to the bank
  • the ability to withdraw more money from a bank account than you actually have
  • when you are granted money from the bank

8. What is a disadvantage of a bank loan?

  • Interest has to be paid on the amount borrowed
  • a business will know exactly what it has to pay each month
  • more expensive than a hire purchase
  • its an internal source of finance

9. What is an example of short term finance?

  • bank overdrafts
  • venture capitalist
  • mortgages
  • debentures

10. What is hire purchase?

  • money that can be used to run day to day wages
  • buying specific goods with a loan, often provided by a finance house
  • profit that has not been returned to the owners
  • a set amount of money borrowed from the bank and paid back over a period of time

11. What is sales of assets?

  • selling the businesses assets to raise finance
  • money that can be used to meet day to day wages
  • profit that has not been returned to the owners
  • buying specific goods with a loan