Chapter 26: Internal Finance Flashcards
1
Q
What is finance?
A
Financing is the process of providing funds for business activities, making purchases, or investing.
2
Q
What two catergories of expenditure are there?
A
Capital expenditure: spending on items that will be used over and over again.
Revenue Expenditure: refers to payments for goods and servies that have already been consumed or will be consumed.
3
Q
What is owner’s capital?
A
The money provided by owners in the business This is a risk taken by them as it comes from personal savings.
4
Q
What is retained profit?
A
the profit after tax thatis put back into the business and not returned to the owners.
