Chapter 21 Flashcards

1
Q

Start-up capital

A

The finance required by a new business to pay for the essential fixed assets
and current assets so that it can start trading.

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2
Q

Working capital

A

Capital available to a business in the short term to pay for day-to-day expenses.

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3
Q

Capital expenditure

A

The money spent on non-current assets (fixed assets) lasting more than one year.

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4
Q

Revenue expenditure

A

Money spent on day-to-day expenses, e.g. wages, raw materials.

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5
Q

Internal finance

A

Finance from within the business itself.

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6
Q

External finance

A

Finance from sources outside of and separate from the business.

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7
Q

Micro-finance

A

This provides financial services to poor people who cannot use traditiona
banks, e.g. small loans

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8
Q

Short-term source of finance

A

Finance that must be paid back within a year and includes: overdraft facility,
trade credits, factoring.

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9
Q

Long-term source of finance

A

Funding obtained for a time frame exceeding one year in duration and
includes: owner’s savings/share capital; loans; debentures; a mortgage; hire
purchase or leasing; grants.

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