Exam Flashcards
(52 cards)
What is payola?
Giving gifts or money to facilitate radio play
How long does a business need to retain financial records?
7 years (5 for employee records)
What records does the business need to retain?
Invoices Receipts Bank statements Cash till receipts Payslips Interviews Position description Reports Tax returns
What information can be used for the basis of a personal budget?
What you spent last year plus inflation
What are the two tax rates for businesses?
30% for companies
Income - expenses = taxable income for sole traders and partnerships
What are the differences between employees and contractors?
Employee = super, tax, insurance, equipment, holiday leave, employer retains intellectual property, paid per hour usually
Contractor = responsible for own insurance, equipment, tax, can delegate to someone else, paid per job.
List all expenses for a sole trader
Rent, commodities (gas, water, electricity), kitchen supplies, equipment, furniture, stationery, phone, internet, postage, marketing, travel, per diems, tax, accountants, lawyers, staff, engineers, venue hire, session musicians
List potential income streams for a band
Royalties, music sales, merchandise sales, ticket sales, synchronisation
What role does ethics play in finance?
CSR (corporate responsibility)
Supply chain management
T-shirt economy
What does BAS stand for? How often do you need to complete one?
Business activity statement
Quarterly
Name four types of business structures
Sole trader
Partnership
Company
NFP
What is the ATO and what does it do?
Australian tax office, collects tax, issues tax return
Describe potential problems am established rock band might have if they don’t hold good financial records
Poor budgeting
May be audited
May be sued
Can a sole trader use personal assets to pay off a business? Briefly explain your answer.
Yes. Sole trader is not separate from the business.
In partnership business structure, how does the Australian government see the partners?
A court will usually decide that unless there is an agreement to the contrary, all partners are presumed equal
If the balance of intellectual property, investment and input is different amongst the band members, what contract could you use to avoid unfair situations?
Band agreement
What does pty and ltd mean? Answer separately and combined.
Pty = unlimited proprietary (private) company
Ltd = publicly limited company
Pty ltd = proprietary limited company, private company with at least one share holder with limited number of shares.
In relation to budgeting, how does the 60/20/20 break down and why?
60% expenses
20% savings
20% entertainment
Covers living costs, allows you to save and allows you to reward yourself so you don’t binge spend
Explain how you would register a business name and how much it would cost for one year.
ASIC
$34 for 1 year
$78 for 3 years
If a not for profit org makes a profit, where does the money get reinvested? Explain with brief example
Reinvested into next years budget.
Eg. APRA may choose to give more grants (give back to members)
Which business structure is best for an independent band - explain how it would function
Sole trader for lead songwriter or main investor with band members as employees
Or partnership (partnership agreement with percentages of share)
Which business structure is not a legal entity of its own
Trust (not a business structure)
Provide examples of good and bad debt
Good = Anything that appreciates in value, assets, property, shares, education
Bad = when you spend more money that what it’s worth, car loan, credit card load
When band becomes successful or someone starts purchasing assets, what business structure should band change to?
Company, so they are not personally viable if something goes wrong and better for tax reasons
