business finance Flashcards
two example of non current assets
land
vehicles
examples of current assets
stock
account receivables
payday loan advantage
get the money straight away so will be able to go away on develop
payday loan disadvantage
high interest rates
payday loan advantage
anyone qualifies so can receive them easily
impact on debt factoring on a small business
money receive is less then owed which lowers cash infows for a business
purposes of accounting
record transaction
planning
management of business
measuring performance
what is capital income?
it is the income that comes from capital invested in the business by the investors/ owners of the business. it is not money that comes from any production or work.
capital income is usually used to buy assets for the business that are within the business for the medium to long term such as premises or equipment.
sources of capital income
owners capital
loans
mortgages
shares
debentures
what are debentures?
medium to long term sources of finance. large companies use them to secure income. these debt instruments pay an interest rate and are redeemable or repayable on a fixed date.
a company typically makes scheduled debt interest payments before they pay stock dividends to shareholders.
debentures are advantageous for company’s since they carry lower interest rates and longer repayment dates compared to other types of loans and debt instruments
what is owners capital?
when the owner funds the business by their own personal savings.
what is revenue income?
revenue income is the money flowing into the business via day to day operation of the business.
sources of revenue income
rent received
commission
sales
interest received
discount received
whats venture capital
comesfgroman experienced entrpreneur and wil claim some owner ship in the business in return. dragons den an example of
what’s crowdfunding
gathering small levels of investment from a large number of people whichadd up to a
