MANAGING BUSINESS ACTIVITIES
COMPLETE STUDY GUIDE PRACTICE
QUESTIONS AND ANSWERS
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Updated 2026 Questions and Answers
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Rationales Included
, Internal source of finance A source of finance that comes from within a business
Personal funds An internal source of finance where the business owner's personal wealth is used
in the business
Retained profit An internal source of finance where the profits from the previous year are used in
the business
Sale of assets An internal source of finance where the business sells assets that they own
(buildings, vehicles, equipment) to raise money
External source of finance A source of finance that comes from outside of the business
Loan capital An external source of finance where the business borrows money for an agreed
length of time
Overdraft An external source of finance (loan capital) where a business is able to go into an
agreed negative balance on their current account. This is a short term measure
Bank loan An external source of finance (loan capital) where a business borrows an agreed
amount of money from a bank, but must pay back interest
Share capital An external source of finance where a business sells a share in the business in
exchange for money
Venture capitalist An investor or business specialist who seeks to invest in businesses they feel can
make them a profit
Leasing Where a business rents the use of something (buildings, vehicles, equipment) for a
monthly fee for a fixed period of time