Business Finance

Question 1

2 prepayments for a pizza delivery business

Answer 1

Rent of the shops= normally paid in advance

Insurance = for equipment such as delivery vans

Question 2

2 problems with high trade payable days ratio

Answer 2

-future cash flow problems = a growing amount of money owed to suppliers
-loss of supplier goodwill = the supplier may decide not to supply the business in the future if not being paid

Question 3

Give 2 advantages of crowdfunding

Answer 3

-Access to capital income
- publicity and awareness

Question 4

Trade payable

Answer 4

The amount of money a business owes to its suppliers

Question 5

Trade receivable

Answer 5

Money owed to the business by customers for products or services

Question 6

Discount allowed

Answer 6

Given to customers who pay the outstanding amount within in specific period of time

Question 7

Discount received

Answer 7

Given to the business by suppliers when it pays the amount within a specified period of time