C Flashcards
What are the two types of income?
Capital Income
Revenue Income
What are the 5 parts of capital income?
Loan, mortgage, Debentures, Shares, Owner’s Capital
What are cash sales?
over counter transactions
What are credit sales?
sales using method of credit
What is Rent recieved?
business rents out its property
What is Commission received?
business acts as an agent and recieves percentage of sales
What is interest recieved?
money earned from saving or lending
What is Discount recieved?
business pays reduced price for goods and services
What is a loan?
money lent from a bank or person, charges interest
What is a debenture?
type of bond or other form of debt not secured by collaterol.
What is an owners capital?
owner invests own savings, may be sole trade or partnership
What are shares?
issued by companies to shareholders, investors may recieve dividends.
What is a mortgage?
Loan usually for property, property is secured and it will be paid back over 25 years
What is Capital expenditure?
assets that a business plans to use over a long period of time
What are intangible assets?
not physical items (difficult to sell)
like goodwil - additional value to a business
patents and trademarks too
What is depreciation?
asses like machinary + office furniture lose value when used,
what is straight line depreciation?
value of an asset loses value by the same amount each year over its life
What is reducing balance depreciation?
a method to help you calculate the rate of depreciation of an asset
What are non-current assets?
Land, Buildings and premises, machinery and equipment, vehicles, fixtures and fittings
What are intangible assets?
Goodwill, Patents, Trademarks and Brand Names
What are the 3 types of internal source?
Retained Profit
Net Current Assets
Sale of Assets
What is retained profit?
profits that are kept in the business and not distrubted to owners or shareholders.
What is sale of assets?
anything that a business owns and sells to get cash (money)
What is net of current assets?
money that is immediatley available to a business
Positive and negative of retained profit?
+ does not have to be repaid and no interest
- not available to new businesses, may not make sufficient profits
Positive and negative of Net Current Assets?
+ quick way to raise money, sell of inventory to reduce costs
- may ahve to accept to lower price for its inventory
What is owners capital?
amount the owner has invested into the business
What is loans?
money borrowed by a person from a company paid back at an interest.
What is crowd-funding
practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount.
What is mortgages
an agreement on an amount of money given by a bank to buy a house paid bank in amounts for a chosen amount of time (typically 25 years)
What is venture capital
capital invested in a project that has significant risk
What is mortgages?
an agreement on an amount of money given by a bank to buy a house paid bank in amounts for the next 25 years
What is debt factoring?
when a business sells its accounts receivables to a third party at a discount, enabling companies to immediately unlock cash tied up in unpaid invoices (like an asset like a building they also take mortgage)
What is hire purhcase?
paying for an item in regular installments while being able to use it
What is leasing?
paying an owner for using their asset
What is trade credit?
an agreement where the buyer doesn’t pay for goods upfront but at a later date
What is grants?
money given to a public body
What is donations?
money given by people typically for a charity or cause
What is peer to peer lending?
They bring together people or businesses that want to lend money with those that want a loan.
What is invoice discounting?
a financial service in which a provider lends cash to a company up to the value of its unpaid invoices.
