Finance questions

Question 1

What is sales revenue

Answer 1

income received from customers

Question 2

What is cost of sales

Answer 2

the amount spent on inventory

Question 3

What is gross profit

Answer 3

The profit made from buying and selling inventory

Question 4

Define expenses

Answer 4

money spent by the busienss eg rent

Question 5

explain the reasons for preparing a cash budget

Answer 5

a cash surplus can be predicted. therefore it allows time to plan to spend it wisely
a cash deficit can be predicted. this means a business is able to arrange a source of finance
it can promote better decision making. this means the business is able to plan furture direction of the business

Question 6

Describe ways in which a business can deal with a cash budget deficit

Answer 6

find cheaper suppliers
increase the sellig price of products
reducing the number of staff to reduce wages
Switch to cheaper methods of advertising

Question 7

Outline the benefits of budgeting to an organisation

Answer 7

budgets cna be used to plan for the future
can be used to idenitfy a cash deficit
to allow the organisation to make better decisions

Question 8

Outline the purpose of a cash budget

Answer 8

to make decisions
to plan for future large purchases
to identify and predicted cash deficits
to identify potential cash surplus

Question 9

Describe the use of technology in the finance department

Answer 9

database can be used to store customers information
emails can be used to inform customers when payment is due
spreadsheets can be used to create financial documents
powerpoint cane be used to prepare a presentation to show shareholders on profit levels

Question 10

Outline a benefit of online banking

Answer 10

It can be accessed anywhere at anytime