3.1 - Introduction to Finance Flashcards
1
Q
what is finance and accounts?
A
the department of the business that is responsible for managing its financial position
2
Q
what is finance and accounts responsible for?
A
- acquiring money for the business
- managing the money of the business
- cash flow management
- profit and loss management
- budgeting
3
Q
why is finance important for businesses?
A
- to pay employees
- to pay shareholders dividends
- to buying inputs for the production process
- to buying new machinery
- Investing in research and development
4
Q
what is capital?
A
the money invested into a business in return for a range of assets
5
Q
what is capital expenditure
A
the spending on fixed assets that can be used for a long period of time
- Non current assets that will be owned and last for more than one year
- The main purpose is to drive growth in the business
6
Q
what is revenue expenditure
A
the day to day spendings of a business
* may be paid daily, weekly or monthly
* when a business can no longer pay for these - it can be considered bankrupt
