Finance

Question 1

Installment

Answer 1

One of a series of regular payments made until all the money owed has been repaid

Question 2

Short term finance

Answer 2

Money borrowed for one year or less

Question 3

Long term finance

Answer 3

Money borrowed for one year or more

Question 4

Capital

Answer 4

Finance provided by the owners of a business

Question 5

Internal finance

Answer 5

Finance generated by the business from its own means

Question 6

Retained profit

Answer 6

Profit held by a business rather than returning it to the owners and which may be used in the future

Question 7

Assets

Answer 7

Recourses which are used or on d by a business, such as cash, stock, or machinery

Question 8

External finance

Answer 8

Finance obtained from outside the business

Question 9

Bank overdraft

Answer 9

Agreement with a bank where a business spends more money than it has in its account

Question 10

Trade payables

Answer 10

Buying resources from suppliers, such as raw materials and paying for them later

Question 11

Mortgage

Answer 11

Long term loan for a property

Question 12

Repossess

Answer 12

To take back cars, furniture, property from people who had agreed to pay back loans but no longer can

Question 13

Debenture

Answer 13

Long term security yielding a fixed rate of interest, issued by a company and secured against assets

Question 14

Hire purchase

Answer 14

Buying specific goods with with a loan

Question 15

Rights issue

Answer 15

Selling new share to existing shareholders at discount

Question 16

Crowd funding

Answer 16

Where are a large number of individuals invest in a business using and online platform

Question 17

Liquid

Answer 17

Asset that is easily changes into cash

Question 18

Overheads

Answer 18

Money spent regularly on rent, insuance etc

Question 19

Insolvent

Answer 19

Inability to meet debts

Question 20

Cash flow forecast

Answer 20

Prediction of all expected receipts and expenses of a business over a future period

Question 21

Cash inflow

Answer 21

Flow of money into a business

Question 22

Cash outflow

Answer 22

Flow of money outside of business

Question 23

Drawings

Answer 23

Money taken out of a business by the owner for personal use

Question 24

Closing cash balance

Answer 24

Amount of cash at hat the business expects to have at the end of each month

Question 25

Costs

Answer 25

Expense that must be met when starting and running a business

Question 26

Fixed costs

Answer 26

Costs that do not vary with the level of output

Question 27

Variable costs

Answer 27

Costs that change with the level of output

Question 28

Total costs

Answer 28

Fixed costs and variable cost added together

Question 29

Total revenue

Answer 29

Money generated form the sale of output. It is price x quantity

Question 30

Break even point

Answer 30

Level of output where total costs and total revenue are exactly the same, neither profit or loss

Question 31

Break even chart

Answer 31

Chart that shows total cost and total revenue.

Question 32

Margin of safety

Answer 32

Amount of output available to be sold above the break even point where the business makes profit

Question 33

Bulk buying

Answer 33

Buying goods in large quantities

Question 34

Stockpile

Answer 34

Large supply of goods held for the future

Question 35

Statement of comprehensive income

Answer 35

Financial document showing a firms income and expenditure

Question 36

Profit

Answer 36

Money left over after all costs have been subtracted from revenue

Question 37

Gross profit

Answer 37

Sales revenue - costs of sales

Question 38

Operating profit

Answer 38

Gross profit - expenses

Question 39

Distributed profit

Answer 39

Profit that is returned to the owners of a business

Question 40

Retained profit

Answer 40

Profit held by a business rather than returning it to the owners

Question 41

Dividend

Answer 41

Share of profit paid to shareholders in a company

Question 42

Normal profit

Answer 42

Minimum profit a business need to retain the interest of the owners

Question 43

Statement of financial position

Answer 43

Summary at a point in time of a businesses assets, liabilities and capital

Question 44

Liabilities

Answer 44

Debts of a business, which provide a source of funds

Question 45

Capital

Answer 45

Finance provided by the owners of the business

Question 46

Non current assets

Answer 46

Assets that last for more than one year

Question 47

Current assets

Answer 47

Assets that likely to be changed into cash within a year

Question 48

Liquidity

Answer 48

Speed at which assets can be sold for cash

Question 49

Trade receivables

Answer 49

Amounts of money that are owed to a company by its customers

Question 50

Current liabilities

Answer 50

Debts that have to be repaid within a year

Question 51

Net current assets

Answer 51

Current assets - current liabilities

Question 52

Non current liabilities

Answer 52

Debts that are paid after more than a year

Question 53

Net assets

Answer 53

Value of all assets - value of liabilities

Question 54

Goodwill

Answer 54

Value that a company has because it has a good relationship with its customers and suppliers

Question 55

Ratio analysis

Answer 55

Mathematical approach to investigating accounts by comparing 2 related figures

Question 56

Quantitive info

Answer 56

Info expressed in numbers

Question 57

Excise duties

Answer 57

Taxes on selected goods, such as petrol and tabaco

Question 58

Auditing

Answer 58

Accounting procedure that checks thoroughly the accuracy of a company accounts