3.1 Intro to Finance

Question 1

procurement

Answer 1

purchasing goods and services for a business to produce its products

Question 2

capital expenditure

Answer 2

aka investment

spending in a company’s fixed assets

(ie. factories, delivery vehicles, technology, production equipment)

business grows in the future, in the long-term

Question 3

fixed asset

Answer 3

item/ property with value and is owned by a person/ business which plans on using it for over a year

Question 4

finance in capital expenditure

Answer 4

long-term

Question 5

Revenue expenditure

Answer 5

spending on a company’s general operational costs

enable businesses to generate ongoing revenue

(day-to-day running costs of a company)

(ie. utility bills, paying salaries, paying suppliers, repaying debts)

Question 6

insolvency

Answer 6

situation in which a business is unable to pay its debts