Fincance

Question 1

Fixed costs

Answer 1

Costs that do not change with output

Question 2

variable costs

Answer 2

Vary directly with output

Question 3

Break even point

Answer 3

Fixed costs
____________________
Price - variable costs

Question 4

Contribution

Answer 4

Price - variable costs

Question 5

Margin of safety

Answer 5

how much output or sales level can fall before a business reaches break-even point

Question 6

Gross profit

Answer 6

Revenue - cost of sales

Question 7

Net profit

Answer 7

What business keeps. Total revenue - total expenses

Question 8

Dividends

Answer 8

Payments made to shareholders as a reward for investing in the company

Question 9

Non current assets

Answer 9

Assets that are intended to remain in the business to help it carry out its day to day operations. E.g-vehicles

Question 10

Net cash flow

Answer 10

Difference between cash inflow and cash outflow

Question 11

Retained profit

Answer 11

Amount of profit not distributed to owners, put back into the business

Question 12

Net book value

Answer 12

Value of a non current asset at the present time

Question 13

Trade receivables

Answer 13

Money owed to business by debtors

Question 14

Trade payables

Answer 14

Money business owes to creditors, usually for purchase if stock

Question 15

Net assets

Answer 15

All of business’s assets minus all liabilities

Question 16

Accruals

Answer 16

Expenses for this accounting period which have yet to be paid for