Business

Question 1

How do you work out the opening balance?

Answer 1

The closing balance from the month before

Question 2

What is inflows?

Answer 2

All the money that goes into a business

Question 3

What is outflows?

Answer 3

All the money that comes out if a business

Question 4

What is the break even point?

Answer 4

When a business makes neither a profit or a loss

Question 5

What is a running cost?

Answer 5

Money that a business spends to keep the business running

Question 6

What is a start up cost?

Answer 6

The amount of money a business spends when setting up the business

Question 7

What is a fixed cost?

Answer 7

A fixed cost is the money That never changes no matter how many products are sold

Question 8

What variables would a cake business have ?

Answer 8

They have to buy ingredients if they they run out

Question 9

What is an income?

Answer 9

The money that is paid into a business

Question 10

What is the formula for the total cost

Answer 10

Total costs= fixed costs + variable costs

Question 11

Give 4 examples of inflows?

Answer 11

💜sales of products

Question 12

Give 4 examples of outflows?

Answer 12

💜payments for stock or raw materials
💜payments for equipment
💜loan repayments
💜wages and bills

Question 13

What is budgeting?

Answer 13

An estimation of how much the business will spend

Question 14

What is margin of safety?

Answer 14

The difference between the target or actual sales and break even point

Question 15

What is budgetary control?

Answer 15

When the budget figures are compared with the actual figures

Question 16

What’s the forming or sales revenue?

Answer 16

Revenue = price x quantity

Question 17

What does a cash flow forecast do?

Answer 17

Identifies all the money that will be coming in and out of a business over a money at a time.

Question 18

Why is a cash flow forecast useful to a business?

Answer 18

It is a way of predicting if a business will have enough money to pay its debts

Question 19

When is adverse variance achieved?

Answer 19

An adverse variance is achieved when the actual performance is worse than the expected results.

Question 20

What does opening balance mean?

Answer 20

The amount of funds in a company’s account at the beginning of a new financial period

Question 21

How do you work out the net profit?

Answer 21

Net profit= gross profit - expenses

Question 22

What is closing balance?

Answer 22

The amount remaining in an account within your chart at the end of an accounting period

Question 23

How do you calculate profit?

Answer 23

Profit/loss= revenue- expenditure

Question 24

How do you work out gross profit?

Answer 24

Gross profit= sales- cost of sales