Sources Of Corporate Finance! Trivia Quiz

7 Questions | Total Attempts: 61

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Sources Of Corporate Finance! Trivia Quiz

Sources of corporate finance trivia quiz. A business needs some capital in order to function or start up and this capital can either be in the form of equity of debt. Long terms loans are a go to for many businesses. The quiz below is perfect for testing out just how well you know the different sources of capital and how they differ from each other. Do give it a shot!


Questions and Answers
  • 1. 
    Which of the following is NOT a source of short term finance:
    • A. 

      Trade Credit

    • B. 

      Accounts Receivable

    • C. 

      Accrued Wages

    • D. 

      Commercial Bills

    • E. 

      Factoring of Accounts Receivable

  • 2. 
    Which of the following would be classified as a finance decision:
    • A. 

      Spending money on revenue expenditure.

    • B. 

      Raising equity finance or long term borrowings to buy non-current assets.

    • C. 

      Selling off a segment of the business because it is unprofitable.

    • D. 

      Raising short term finance to improve working capital.

    • E. 

      Determining what proportion of profits will be retained by the company.

  • 3. 
    A long term borrowing NOT backed by a legal charge over the assets of the borrower is called a(n):
    • A. 

      Debenture.

    • B. 

      Mortgage.

    • C. 

      Unsecured Note.

    • D. 

      Bank Bill.

    • E. 

      None of the above.

  • 4. 
    Long term debt can be obtained with ALL BUT which of the following:
    • A. 

      Term Loan

    • B. 

      Convertible Notes

    • C. 

      Mortgage Debentures

    • D. 

      Preference Shares

    • E. 

      Commercial Bills

  • 5. 
    Which of the following describe the characteristics of short term liabilities:
    • A. 

      Represent contractual claims on a firms income and assets.

    • B. 

      Can arise spontaneously from a firm's operations.

    • C. 

      Are sources of funds for a firm.

    • D. 

      Grow in line with an increase in trading operations.

    • E. 

      Should be used to finance temporary movements in current assets.

  • 6. 
    Credit extended in connection with goods purchased for resale is called:
    • A. 

      Bank Overdraft.

    • B. 

      Mortgage Finance.

    • C. 

      Commercial Bills.

    • D. 

      Trade Credit.

    • E. 

      Unsecured Notes.

  • 7. 
    Which of the following best describe trade credit:
    • A. 

      Trade credit has an implicit interest cost.

    • B. 

      Large firms tend to use trade credit more than small firms.

    • C. 

      The total trade creit owed by a company at any point of time is termed "accounts receivable".

    • D. 

      Trade credit arises from the time differential between receipt and payment for goods purchased by the business.

    • E. 

      Trade credit is usually secured by a floating charge over the company's assets.

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