2024 EXAM PRACTICE QUESTIONS
Name:
Unit Specification: Unit 3 – Personal and Business Finance
Method of assessment
Externally marked exam (80 marks – 2 hours)
Unit in brief
Learners study the purpose and importance of personal and business finance. They
will develop the skills and knowledge needed to understand, analyse and prepare
financial information.
Unit introduction
This unit includes aspects of both personal and business finance. Personal finance
involves the understanding of why money is important and how managing your
money can help prevent future financial difficulties. It is vital you understand the
financial decisions you will need to take throughout your life and how risk can affect
you and your choices. This unit will also give you an insight into where you can get
financial advice and support.
The business finance aspects of the unit introduce you to accounting terminology,
the purpose and importance of business accounts and the different sources of
finance available to businesses. Planning tools, such as cash flow forecasts and
break-even, will be prepared and analysed. Measuring the financial performance of a
business will require you to prepare and analyse statements of comprehensive
income and statements of financial position.
This unit will provide a foundation for a number of other finance and business units
and will help you to analyse profitability, liquidity and business efficiency. It will give
you the knowledge and understanding to manage your personal finances and will
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,give you a background to business finance and accounting as you progress to
employment or further training.
Summary of assessment
This unit is assessed by a written examination set by Pearson. The examination will
be two hours in length. The number of marks for the examination is 80. (Section A
contains questions on the personal finance unit content and approximately one-third
of the marks, and Section B contains questions on the business finance unit content
and approximately two-thirds of the marks).
Assessment outcomes
AO1 Demonstrate knowledge and understanding of business and personal finance
principles, concepts, key terms, functions and theories. Command words: describe,
explain, give, identify, outline Marks: ranges from 1 to 4 marks.
AO2 Apply knowledge and understanding of financial issues and accounting
processes to real-life business and personal scenarios Command words: analyse,
assess, calculate, describe, discuss, evaluate, explain Marks: ranges from 2 to 12
marks.
AO3 Analyse business and personal financial information and data, demonstrating
the ability to interpret the potential impact and outcome in context Command words:
analyse, assess, discuss, evaluate Marks: ranges from 6 to 12 marks.
AO4 Evaluate how financial information and data can be used, and interrelate, in
order to justify conclusions related to business and personal finance Command
words: analyse, assess, discuss, evaluate Marks: ranges from 6 to 12 marks.
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, Learning Outcome D - Select and Evaluate Different Sources of
Business Finance
Activity 1 – Internal Sources of Finance
As we go through each source of internal finance take down what that source of
finance is and, in the table, write the advantages and disadvantages of using that
source of finance.
Internal source Explain the source Advantages Disadvantages
of finance
Retained Profit
Net Current
Assets
Sale of Assets
Activity 2 – Internal Source Scenario
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