Business Flashcards
How do you work out the opening balance?
The closing balance from the month before
What is inflows?
All the money that goes into a business
What is outflows?
All the money that comes out if a business
What is the break even point?
When a business makes neither a profit or a loss
What is a running cost?
Money that a business spends to keep the business running
What is a start up cost?
The amount of money a business spends when setting up the business
What is a fixed cost?
A fixed cost is the money That never changes no matter how many products are sold
What variables would a cake business have ?
They have to buy ingredients if they they run out
What is an income?
The money that is paid into a business
What is the formula for the total cost
Total costs= fixed costs + variable costs
Give 4 examples of inflows?
💜sales of products
Give 4 examples of outflows?
💜payments for stock or raw materials
💜payments for equipment
💜loan repayments
💜wages and bills
What is budgeting?
An estimation of how much the business will spend
What is margin of safety?
The difference between the target or actual sales and break even point
What is budgetary control?
When the budget figures are compared with the actual figures
What’s the forming or sales revenue?
Revenue = price x quantity
What does a cash flow forecast do?
Identifies all the money that will be coming in and out of a business over a money at a time.
Why is a cash flow forecast useful to a business?
It is a way of predicting if a business will have enough money to pay its debts
When is adverse variance achieved?
An adverse variance is achieved when the actual performance is worse than the expected results.
What does opening balance mean?
The amount of funds in a company’s account at the beginning of a new financial period
How do you work out the net profit?
Net profit= gross profit - expenses
What is closing balance?
The amount remaining in an account within your chart at the end of an accounting period
How do you calculate profit?
Profit/loss= revenue- expenditure
How do you work out gross profit?
Gross profit= sales- cost of sales
