Learning Aim E Key Words

Question 1

Definition of cash flow forecast

Answer 1

Document that shows the predicted flow of cash into and out of a business

Question 2

Definition of opening balance

Answer 2

Amount of cash available in a business at the start of a set period of time

Question 3

Definition of closing balance

Answer 3

Cash available in a business at the end of a set period of time

Question 4

Definition of credit period

Answer 4

The length of time given to customers to pay for goods and services

Question 5

Definition of liquidity

Answer 5

Measures a firms ability to meet short term cash payments

Question 6

Definition of insolvent

Answer 6

When a grim is unable to meet day to day expenditure short term cash payments

Question 7

Definition for variable cost

Answer 7

Vary with level of output it increases when business increases

Question 8

Definition of semi variable

Answer 8

Part of cost stays the some other varies due to business

Question 9

Definition for fixed cost

Answer 9

Do not vary with output stays the same

Question 10

Definition for total revenue

Answer 10

Total amount of money coming in from sales

Question 11

Definition of total sales

Answer 11

Sales made in set time period

Question 12

Definition selling price per unit

Answer 12

The amount a customer pays for each item bought

Question 13

Definition for sales in value

Answer 13

Expressed in monetary value

Question 14

Definition of sales in volume

Answer 14

Expressed as a quantity

Question 15

Definition of cash sales

Answer 15

Pays at the time of purchase

Question 16

Definition of credit sales

Answer 16

Pay pre agreed period 30 days after

Question 17

Definition of loans

Answer 17

Fund purchase of asset money borrowed

Question 18

Definition of capital introduced

Answer 18

Money invested when business setup or looking to expand by own or shareholder

Question 19

Definition sales of assets

Answer 19

Items owned by business which is received from selling

Question 20

Definition of bank interest received

Answer 20

Interest paid by back

Question 21

Definition of cash purchases

Answer 21

Items purchased by business paid at that time

Question 22

Definition of credit purchase

Answer 22

Paid at later date

Question 23

Definition of purchase of asset

Answer 23

Non current asset which business keeps for more than 1 year like vehicle

Question 24

Definition of VAT

Answer 24

Pay VAT to HMRC if registered business adds VAT when buying items

Question 25

Definition of rent rates salaries…

Answer 25

Regular outflows much cash to cover it