2.1

Question 1

Economic variable

Answer 1

Features of an economy which have effects on consumers e.g unemployment, inflation, exchange rates

Question 2

Internal finance

Answer 2

Raising of capital or cash from within the business

Question 3

Personal savings

Answer 3

Internal finance of personal finance from the owner

Question 4

Retained profit

Answer 4

Internal finance through profit which can be re invested into business or kept by business

Question 5

Sale of Assets

Answer 5

Internal finance where assets are sold to generate cash

Question 6

Bank loan

Answer 6

Money borrowed from bank paid back with interest over time

Question 7

Business Angels

Answer 7

Individuals who invest in a business in exchange for shares in a business

Question 8

Crowd funding

Answer 8

Large number of individuals provide funding for a business or project in return for shares

Question 9

External Finance

Answer 9

Money raised from outside the business

Question 10

Grant

Answer 10

Sum of money given by the government or another organisation

Question 11

Leasing

Answer 11

A contract to acquire the use of resources such as property or equipment

Question 12

Loan

Answer 12

An amount of money borrowed but usually repayable after fixed term of more then 12 months

Question 13

Overdraft

Answer 13

Business has negative bank balance in bank account because amount withdrawn is greater than current balance

Question 14

Peer to Peer funding

Answer 14

Person lends money to other individuals or businesses via online transactions

Question 15

Share Capital

Answer 15

The finance raised by a business selling new shares

Question 16

Trade Credit

Answer 16

Where a firm receives stock inventory or raw materials from a supplier in which they do not have to pay for until later date

Question 17

Venture Capital

Answer 17

Business issues shares to a small number of investors in return for capital for the company

Question 18

Liability

Answer 18

Obligation to pay another person, lender or supplier

Question 19

Limited Liability

Question 20

Unlimited Liability

Question 21

Business Plan

Answer 21

Document giving details of variety of aspects about business to provide strategic look at business to attract investors

Question 22

Cash Flow

Answer 22

Movement of cash in and out of a business over a period of time

Question 23

Cash Inflow

Answer 23

The flow of cash into a business

Question 24

Cash Outflow

Answer 24

The flow of cash out of a business

Question 25

Cash Flow Forecast

Answer 25

Predicted flow of cash into and out of a business over a period of time

Question 26

Closing balance

Answer 26

Cash left in account at the end of the month

Question 27

Net cash flow

Answer 27

Difference between cash flowing in and out of a business over a period of time

Question 28

Opening Balance

Answer 28

Cash in the bank on the first day of the month