Business Finance Flashcards
What is Break even Point?
The break-even point (BEP) or break-even level represents the sales amount—in either unit (quantity) or revenue (sales) terms
What is Profit?
A Profit is when you buy something and sell it for more than you got it for which means you have gained a Profit.
What is a Loss?
A Loss is when you buy something maybe list it up and not gain a Profit so they would have got a Loss on money.
What is a Variable cost?
A periodic cost that varies in step with the output or the sales revenue of a company.
What is a Fixed cost?
A periodic cost that remains more or less unchanged irrespective of the output level or sales revenue, such as depreciation, insurance, interest, rent, salaries, and wages.
What is a Total costs?
Fixed costs (FC) are costs that don’t change from month to month and don’t vary based on activities or the number of goods used.
What is a Total Revenue?
Multiply the selling price of each unit by the total number of units sold. For example, a company that sells 100 aluminium screws at $1 per screw generates $100 in sales revenue. This calculation indicates the revenue generated by each product sold by a company.
What is Margin of Safety?
Margin of safety (safety margin) is the difference between the intrinsic value of a stock and its market price.
What is an Inflow?
The movement of a large number of people or things or a large amount of money into a place.
What is an Outflow?
A large amount of money that moves or is transferred out of a place.
What is an Opening Balance?
The opening balance is the amount of funds in a company’s account at the beginning of a new financial period.
What is a Closing Balance?
A closing balance is the amount remaining in an account within your chart of accounts, positive or negative, at the end of an accounting period or year end.
What is an Overdraft?
A deficit in a bank account caused by drawing more money than the account holds.
What are Credit periods?
The credit period is the number of days that a customer is allowed to wait before paying an invoice. The concept is important because it indicates the amount of working capital that a business is willing to invest in its accounts receivable in order to generate sales
What are Debtors?
A person, country, or organisation that owes money.
