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Business Studies Edexcel Pearson Unit 3 (Finance) > Business: Finance Exam > Flashcards

Business: Finance Exam Flashcards

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1
Q

Financial Services Compensation Scheme (FSCS)

A
  • Consumer Protection
  • Organisation
  • Pays Compensation to a consumer
  • This happens if the service provider is unable
  • Protects up to £85,000
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2
Q

Office of Fair Trade (OFT)

A
  • Consumer Protection
  • Government Organisation
  • Established to regulate all markets
  • Fair prices
  • Healthy competition
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3
Q

Legislation: Consumer Credit

A
  • Consumer Protection
  • Are laws passed
  • Enforces the regulation of any firm offering credit
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4
Q

Financial Conduct Authority (FCA)

A
  • Consumer Protection
  • Independent Organisation
  • Regulates the actions of providers of financial services
  • Funded by membership fees
  • Focuses of 3 key areas
    1) AUTHORISATION
    2) SUPERVISION
    3) ENFORCEMENT
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5
Q

Financial Ombudsmen Service (FOS)

A
  • Consumer Protection
  • Has compulsory fees
  • Government Interest
  • Consumer disputes with financial service providers
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6
Q

Banks

A

*Handles financial transactions and stores money
*Services offered: holding deposits, making payments and supplying credit
+Has Security
-Savings protected up to £85,000 if the bank goes bankrupt

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7
Q

Types of Income: Investment

A
  • Capital
  • Loans
  • Mortgages
  • Shares
  • Owner’s Capital
  • Debentures
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8
Q

Types of Income: Revenue

A
  • Cash Sales
  • Credit Sales (You don’t get the money immediately)
  • Rent received
  • Commission received
  • Interest Rate
  • Discount received (Goodwill)
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9
Q

Types of Asset: Current Asset

A

-Cash and other company assets that will be turning into cash within 1 year

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10
Q

Types of Assets: Non-Current

A

-Long-term investment where the full value won’t be realised for a full year

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11
Q

Types of Assets: Tangible

A

-Physical item

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12
Q

Types of Asset: Non-tangible

A

-Non physical

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13
Q

Bank Of England

A

*Maintains Finance for all of the UK
+Makes a stable economy
-Not a bank for the members of the public
-Can raise interest rates making borrowing more expensive

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14
Q

Building Societies

A

*Members that are part owners
*Members can vote
*Not on the stock exchange
+Allows higher interest
-Savings on protected up to £85,000
-Lack of business drive

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15
Q

Insurance Companies

A

*Protect against the risk of loss in return for a premium
+Planning is made easier
-Premiums will be charged to ensure share holder needs are met

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16
Q

Current Accounts: Standard

A
  • Direct debit (used for bill payments, etc)

* Standing orders (you have control)

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17
Q

Current Accounts: Basic

A
  • Electron cards which only take money out at a cash point
  • Used for people with a low credit score
  • Could be for under 16s
18
Q

Current Accounts: Student

A

*Interest free overdraft

19
Q

Current Account: Premium

A
  • Pay a monthly fee

* Breakdown

20
Q

Credit Unions

A

-Not-for-profit
-Responsible for supporting a community made up of its members
-Members are the owners and have voting rights
+Offer additional benefits to the community/good cause
-Lack of business drive

21
Q

National Savings and Investments

A

*Government-backed
*Offers a secure saving option
*Options include: ISAs, premium bonds, gilts & bonds
+100% Savings
+No upper limit
+Offers additional services
-Rates are variable
-Not easy access due to a lack of highest presence

22
Q

Pension Companies

A

*Sell policies to individuals to allow them to save now to fund retirement
+Security
+Experts are employed to make investment decisions
-Money already invested in a pension cannot be released

23
Q

Pawnbrokers

A

*Loan money against a personal asset
+Quick way of getting cash
+Amount of money given for the Asset is often substantially lower than its actual worth

24
Q

Payday Loans

A

*Short term
*Bridge the gap
*Small amounts at a high rate
+Quick way of getting cash
-Interest charges are high
-Final sum substantially higher the initial amount

25
Q

Citizens Advice

A

*An Organisation ran by charities that offers advice on both financial/non-financial issues
*Covers: debt, benefits, banking, pensions and insurance
+Free service
+Wide range covered
-Not professional

26
Q

Independent Financial Advisor (IFA)

A

*Professionals that offer independent advice on financial matters
+Services are regulated
-There’s no unbiased guarantee

27
Q

Price Comparison Websites

A 
*They’re websites that collate prices for similar goods/services 
\+24/7 access 
\+Free service 
-Not 100% up-to-date
-Not unbiased
28
Q

Money Advice Service

A 
*Government Organisation 
\+Government funded
\+Impartial
-No physical presence 
-Advice can be generic rather than personal
28
Q

Individual Voluntary Arrangements

A

*Government Organisation that allows an individual to declare themselves bankrupt
+Helps manage debt payment
-Negative side is it will affect their future credit ratings
-“Setup” And “Handling Fees” are charged for

29
Q

Debt Councellors

A

*Professionals who offer independent advice on how to manage your debts
+Specialised professional
-Services will be charged for

30
Q

Creditor

A
  • These are the people your business owes money to

- “Trade Payables”

30
Q

Profit

A

-Surplus achieved when total revenue is than total costs

30
Q

Creditors

A

-Who owe your business money

31
Q

Debitor

A
  • These are the people who owe your business money

- “Trade Recievables”

32
Q

Loss

A

-Shortfall suffered when total revenue is lower than total costs

33
Q

Gross Profit

A

-Sales revenue - costs of goods sold

34
Q

Sales Revenue

A

-Quantity sold x Selling Price

35
Q

Net Profit

A
  • Gross Profit - Expenses

- E.g. rent, advertising,etc…

36
Q

Economic Factors

A
  • Gross Domestic Product (GDP)-income in circulation
  • Inflation- value of money coming in
  • Minimum Living Wage
  • Interest Rates
  • Supply/Demand
  • Exchange Rate
37
Q

Social Factor

A
  • Life stages

- Risk spending (borrowing credit)

38
Q

PEA|RLS

A
  • “PEARLS” is a acronym for remembering what is “Debit” and what is “Credit”
  • “PEA” stands for: Purchases, Expenses and Assets which are all forms of Debit
  • “RLS” stands for: Revenue, Liabilities and Sales
39
Q

Double Entry

A
  • Money has to be seen twice
  • Assets = Liabilities (accounts have to balance)
  • Debits (gains value) = Credits (gives value)

Business Studies Edexcel Pearson Unit 3 (Finance) (1 decks)

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