Learning Aim E

Question 1

Cash flow forecast

Answer 1

A financial estimate that predicts the inflow and outflow of cash in a business over a specific period, such as weekly, monthly, or quarterly.

Question 2

Inflows

Answer 2

Refers to the incoming cash or financial resources a business or individual receives.

Question 3

Cash sales

Answer 3

Refer to transactions where payment is made immediately, typically in the form of cash, debit, or credit card, at the point of sale.

Question 4

Credit sales

Answer 4

These occur when a business sells goods or services and allows the customer to pay at a later date.

Question 5

Loans

Answer 5

Sums of money borrowed from a bank or financial institution with an agreement to repay the principle amount along with interest over a specific period.

Question 6

Capital introduced

Answer 6

Refers to the initial or additional funds invested into a business by its owners or shareholders.

Question 7

Sale of assets

Answer 7

Refers to the transaction in which a business or individual sells physical or intangible assets.

Question 8

Bank interest received

Answer 8

Refers to the income earned by a business or individual from the interest paid on their bank deposits.

Question 9

Outflows

Answer 9

Refers to the cash or financial resources that leave a business, typically due to expenses, payments, or investments.

Question 10

Cash purchases

Answer 10

Refers to transactions where a business or individual buys goods or services and pays for them immediately, typically with cash, debit card, or credit card.

Question 11

Credit purchases

Answer 11

Refer to the practice of buying goods or services and agreeing to pay for them at a later date, rather than paying up front.

Question 12

Rent

Answer 12

Refers to the payment made by a tenant to a property owner or landowner for the use of property, land, or equipment.

Question 13

Rates

Answer 13

Refers to fixed charges or fees that are applied to goods, services, or financial transactions, often set by authorities or organisations.

Question 14

Salaries

Answer 14

Refer to regular, fixed payments made by an employer to an employee in exchange for their work or services.

Question 15

Wages

Answer 15

Refer to the payment an employee receives for the work they perform, typically calculated as an hourly, daily, or weekly basis.

Question 16

Utilities

Answer 16

Refer to essential services provided to households and businesses for daily living and operational needs.

Question 17

Purchase of assets

Answer 17

Refers to the acquisition of physical or intangible items by an individual or business for the purpose of investment, use in operations, or to generate future economic benefits.

Question 18

VAT

Answer 18

A consumption tax levied on the value added to goods and services at each stage of production or distribution.

Question 19

Bank interest paid

Answer 19

Refers to the amount of money a borrower (individual or business) pays to a bank or financial institution for the use of borrowed funds.

Question 20

Break-even

Answer 20

Refers to the point at which a business’s total revenues exactly equal its total costs, resulting in neither profit nor loss

Question 21

Costs

Answer 21

Refer to the expenses incurred by a business or individual in the production of goods or services, or in carrying out activities to operate a business.

Question 22

Variable costs

Answer 22

Expenses that change in direct proportion to the level of production or sales volume.

Question 23

Semi-variable

Answer 23

Costs that have both a fixed and a variable component.

Question 24

Fixed costs

Answer 24

Expenses that remain constant regardless of the level of production or business activity.

Question 25

Total costs

Answer 25

Refer to the sum of all expenses incurred by a business in the production of goods or services. It includes both fixed and variable costs over a given period.

Question 26

Sales revenue

Answer 26

Refers to the total amount of money generated by a business from selling goods or services during a specific period.

Question 27

Total sales

Answer 27

Refers to the overall amount of revenue a business earns from selling its goods or services within a specific period.

Question 28

Selling price per unit

Answer 28

Refers to the amount of money a business charges for each individual unit of a product or service it sells.

Question 29

Sales value

Answer 29

Refers to the total monetary worth of the goods or services sold by a business during a specific period.

Question 30

Contribution

Answer 30

Refers to the amount of revenue from sales that is available to cover fixed costs and contribute to the business’s profits.

Question 31

Margin of safety

Answer 31

Refers to the difference between the actual sales level and the break-even sales level. It measures how much sales can drop before a business reaches its break-even point, where it starts making a loss.