Factors Affecting The Sources Of Finance - Pt 2
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- 1.
Which of the following are features of a Sole Trader? (Select 3)
- A.
The owner has unlimited liability
- B.
The business is owned by one person
- C.
The owner keeps all of the profits
- D.
The owner has limited liability
- E.
The business's accounts need to be made public
- F.
There are no employees
Correct Answer(s)
A. The owner has unlimited liability
B. The business is owned by one person
C. The owner keeps all of the profits -
- 2.
If forming a Partnership, it is a legal requirement to draw up a Partnership Agreement? (True or False)
- A.
True
- B.
False
Correct Answer
B. False -
- 3.
Which of the following is NOT true for a Private Limited Company? (Select 1)
- A.
Shareholders have limited liability
- B.
Shares can be sold to the general public
- C.
The word Limited or Ltd. is displayed after the company name
- D.
The Memorandum and Articles of Association have to be sent to Companies House
Correct Answer
B. Shares can be sold to the general public -
- 4.
Which of the following business forms has to pay Corporation Tax on profits? (Select 1)
- A.
Sole Trader
- B.
Private Limited Company
- C.
Limited Liability Partnership
- D.
Partnership
Correct Answer
B. Private Limited Company -
- 5.
Which of the following statements correctly summarizes the key characteristics of a sole trader's business?
- A.
Liability is limited to the providers of loan finance and only the trader takes an active part in managing the business
- B.
The trader has unlimited liability and runs the business in conjunction with the providers of loan finance
- C.
The trader has unlimited liability and must have the business accounts audited
- D.
The trader has unlimited liability, takes sole responsibility for management of the business and no audit is needed
Correct Answer
D. The trader has unlimited liability, takes sole responsibility for management of the business and no audit is needed -
- 6.
Which of the following could explain why a business might choose to organise as a Private Limited Company rather than as a Sole Proprietorship or a Partnership? (Select 2)
- A.
Private Limited Companies generally face fewer regulations
- B.
Private Limited Companies generally face lower taxes
- C.
Private Limited Companies generally find it easier to raise capital
- D.
Private Limited Companies enjoy limited liability
Correct Answer(s)
C. Private Limited Companies generally find it easier to raise capital
D. Private Limited Companies enjoy limited liability -
- 7.
The cost of borrowing is usually expressed in terms of the A.P.R. What does A.P.R. stand for? (Select 1)
- A.
Annual Percentage Rate
- B.
Average Percentage Rate
- C.
Additional Percentage Rate
- D.
Accumulative Percentage Rate
Correct Answer
A. Annual Percentage Rate -
- 8.
Opportunity Cost is....? (Select 1)
- A.
The cost associated with investing in one course of action rather than another
- B.
The cost associated with developing a new business opportunity
- C.
The cost associated with one failing to take advantage of an opportunity
- D.
The cost associated with increasing the number of available opportunities
Correct Answer
A. The cost associated with investing in one course of action rather than another -
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Current Version
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Apr 23, 2020Quiz Edited by
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Nov 20, 2015Quiz Created by
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