Quiz: Business students – how well do you know your business terms?

22 May 2019

Are you a business student?

There’s no denying that you’re constantly learning as you master the business ropes, but reading voraciously – and not just limiting yourself to your college textbooks – and keeping abreast of business-related news will not only help with your understanding of things but will also expand your knowledge in the field.

So, if you’re dreaming of becoming the next Richard Branson or Jack Ma, it sure would help to know your business terms.

Regardless whether you’re in your first or final year, try to guess the meaning of these common business terms:

1. What is ‘accounts payable’?

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An accounting entry that represents a company's obligation to pay off a short-term debt to its creditors or suppliers.

Money a company owes the vendors for inventory-related goods, such as business supplies or materials that are part of the inventory.

Correct! Wrong!

2. What is ‘cash flow’?

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The excess of your revenues over your expenses.

The net amount of cash and cash-equivalents being transferred in and out of a business.

Correct! Wrong!

3. What is ‘asset-based lending’?

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The unused portion of a line of credit.

The business of loaning money in an agreement that is secured by collateral.

Correct! Wrong!

4. What is ‘cosigner’?

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A person who signs on to guarantee a loan’s repayment and increase the odds of a borrower’s approval.

A person who borrows money with you and shares equal responsibility in repaying the loan.

Correct! Wrong!

5. What is ‘credit rating’?

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A statistical analysis performed by lenders and financial institutions to access a person's creditworthiness.

A quantified assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation.

Correct! Wrong!

6. What does ‘refinance’ mean?

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When an individual or business revises the interest rate, payment schedule and terms of a previous credit agreement.

Restructuring the terms of an existing loan or bond to extend the repayment period.