Chapter 14 (Introduction to finance)

Question 1

Capital expenditure

Answer 1

Money spent on fixed (non-current) assets *machinery, equipment, land

Question 2

Collateral

Answer 2

Financial guarantee for securing loan capital (the loaners will take these assets if the loan isn’t paid back)

Question 3

Fixed assets

Answer 3

Items of monetary value that have a long-term function for businesses so it can be used repeatedly for production

Question 4

Revenue expenditure

Answer 4

Money spent on the day-to-day running of a business *rent, wages/salaries, utility bills