5.1 Business Finance Flashcards
1
Q
Start-up capital
A
Investment required by an entrepreneur or business person to build up their business.
2
Q
Working capital
A
The capital needed to pay for raw materials, day-to-day running costs and credit offered to customers.
3
Q
Capital expenditure
A
Involves the purchase of assets that are expected to last for more than one year, such as building and machinery.
4
Q
Revenue expenditure
A
Is spending on all costs and assets other than fixed assets and includes wages and salaries and materials bought for stock.
5
Q
Liquidity
A
The ability of a firm to be able to pay its short-term debts.
6
Q
Liquidation
A
When a firm ceases trading and its assets are sold for cash to pay suppliers and other creditors.
