Finance

Question 1

Short term sources of finance

Answer 1

Overdraft
Trade credit
Debt factoring
Government grant

Question 2

Over draft means

Answer 2

Taking more money out that you have

Question 3

Trade credit

Answer 3

Buying something then paying later

Question 4

Debt factoring

Answer 4

Selling debts to another firm

Question 5

Government grand

Answer 5

Get money from government that doesn’t need to be paid back

Question 6

Sources of finance

Answer 6

Short term
Medium term
Long term

Question 7

Medium sources of finance

Answer 7

Bank loan
Leasing
Hire purchase

Question 8

Hire purchase

Answer 8

Used to buy equipment or vehicles

Question 9

Bank loan

Answer 9

Borrowing money which is paid back

Question 10

Leasing

Answer 10

Renting equipment or vehicles

Question 11

Long term

Answer 11

Mortgages 
Share issue 
Debentures 
Sales and leaseback agreements 
Venture capital

Question 12

What is cash budgeting

Answer 12

Is a method of planning and ensures there’s enough money to meet commitments

Question 13

What causes cash flow

Answer 13

Purchasing capital equipment 
Low sales 
High expenses 
Too much borrowing 
Debtors not paying in time

Question 14

Resolving cash flow problems

Answer 14

Discounts and promotion to encourage sales
Sell any unnecessary fixed assets
Arrange credit with supplier
Sale and leaseback