BTEC Level 3 Business (Finance) | Exam QUESTIONS
with Verified 100% Correct Answers
Historic cost - ✔✔The cost of an asset when it is purchased
Expected Life - ✔✔How long an asset is expected to be used within a business
Residual Value - ✔✔The value of an asset when it is disposed of by the business, for
example resale value
Current Assets - ✔✔items owned by the business that change in value on a regular
basis, such as stock
Current Assets - ✔✔Assets which you do not plan to get rid of within a year
Current Liabilities - ✔✔Liabilities which have to be payed off within a year
Capital Employed - ✔✔The total amount of capital tied up in a business at a point in
time
Interfirm - ✔✔between different firms, for example, comparing the performance of
two different house builders
Intrafirm - ✔✔within the firm, for example comparing this years results with last
years or the performance of the .... branch with the ... branch of a retail store
,Stakeholder - ✔✔Anyone with an interest in the activities of a business, whether
directly or indirectly involved
Illiquid - ✔✔Not easily converted into cash
Retained Profit - ✔✔(Internal) This is the profit that has been made after tax that has
not been returned to the owners. It is the most important source of finance for a
business.
Invoice Discounting - ✔✔(External) This is when a business lends money against their
unpaid sales. Once the business receive payment from customers, the money goes to
the lender -- an invoice financier
Net Current Assets - ✔✔(Internal) The amount of money that a business has on hand
in a given year, or what they will have. Also known as working capital, it is calculated by
subtracting current liabilities from current assets.
Debt Factoring - ✔✔(External) This is when an invoice financier will buy a debt owed
to a business by a customer and collect the money themselves. They pay the business
around 85% of the money owed by the customer. Once they receive the money from
the customer they pay the business the remaining balance - with the business paying
fees.
Hire Purchase - ✔✔(External) Often used by small businesses as a way of buying
machinery. A down payment may be required and then the business would repay the
remainder of the price on instalments over a period of time
Peer to Peer Lending - ✔✔(External) This method allows individuals to gain money
without having to go through a bank or financial institution. Many websites have been
set up to match individuals lenders and borrowers online
, Sale of assets - ✔✔(Internal) a business may be able to sell certain assets within the
business in order to raise finance. for example, machinery, land and buildings.
Loans - ✔✔(External) This is borrowed from a bank and must be repaid over a set
amount of time in regular instalments
Crowd Funding - ✔✔(External)A large number of people to raise money in order to
fund a project
Leasing - ✔✔(External) a business will gain the use of particular resources such as,
property, machinery in return doe regular payments. The business never owns the
resource
Donations - ✔✔(External) Money or goods that are given to help an organisation
Trade Credit - ✔✔(External) A business will buy raw materials or fuel and pay for
them at a later date, usually within 30-90 days
Grants - ✔✔(External) An amount of money that is given to an individual or a
business for a specific project or purpose
Mortgages - ✔✔(External) Usually a long term loan from a bank. The lender would
need to use land or property as security on the loan
Venture Capital - ✔✔(External) A type of funding for new or growing businesses. This
type of funding is provided by private investors
with Verified 100% Correct Answers
Historic cost - ✔✔The cost of an asset when it is purchased
Expected Life - ✔✔How long an asset is expected to be used within a business
Residual Value - ✔✔The value of an asset when it is disposed of by the business, for
example resale value
Current Assets - ✔✔items owned by the business that change in value on a regular
basis, such as stock
Current Assets - ✔✔Assets which you do not plan to get rid of within a year
Current Liabilities - ✔✔Liabilities which have to be payed off within a year
Capital Employed - ✔✔The total amount of capital tied up in a business at a point in
time
Interfirm - ✔✔between different firms, for example, comparing the performance of
two different house builders
Intrafirm - ✔✔within the firm, for example comparing this years results with last
years or the performance of the .... branch with the ... branch of a retail store
,Stakeholder - ✔✔Anyone with an interest in the activities of a business, whether
directly or indirectly involved
Illiquid - ✔✔Not easily converted into cash
Retained Profit - ✔✔(Internal) This is the profit that has been made after tax that has
not been returned to the owners. It is the most important source of finance for a
business.
Invoice Discounting - ✔✔(External) This is when a business lends money against their
unpaid sales. Once the business receive payment from customers, the money goes to
the lender -- an invoice financier
Net Current Assets - ✔✔(Internal) The amount of money that a business has on hand
in a given year, or what they will have. Also known as working capital, it is calculated by
subtracting current liabilities from current assets.
Debt Factoring - ✔✔(External) This is when an invoice financier will buy a debt owed
to a business by a customer and collect the money themselves. They pay the business
around 85% of the money owed by the customer. Once they receive the money from
the customer they pay the business the remaining balance - with the business paying
fees.
Hire Purchase - ✔✔(External) Often used by small businesses as a way of buying
machinery. A down payment may be required and then the business would repay the
remainder of the price on instalments over a period of time
Peer to Peer Lending - ✔✔(External) This method allows individuals to gain money
without having to go through a bank or financial institution. Many websites have been
set up to match individuals lenders and borrowers online
, Sale of assets - ✔✔(Internal) a business may be able to sell certain assets within the
business in order to raise finance. for example, machinery, land and buildings.
Loans - ✔✔(External) This is borrowed from a bank and must be repaid over a set
amount of time in regular instalments
Crowd Funding - ✔✔(External)A large number of people to raise money in order to
fund a project
Leasing - ✔✔(External) a business will gain the use of particular resources such as,
property, machinery in return doe regular payments. The business never owns the
resource
Donations - ✔✔(External) Money or goods that are given to help an organisation
Trade Credit - ✔✔(External) A business will buy raw materials or fuel and pay for
them at a later date, usually within 30-90 days
Grants - ✔✔(External) An amount of money that is given to an individual or a
business for a specific project or purpose
Mortgages - ✔✔(External) Usually a long term loan from a bank. The lender would
need to use land or property as security on the loan
Venture Capital - ✔✔(External) A type of funding for new or growing businesses. This
type of funding is provided by private investors
