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iGCSE Business Studies > Section 3 – Accounting and Finance... > Flashcards

Section 3 – Accounting and Finance... Flashcards

1
Q

Hire Purchase.

A

Buying specific goods with a loan, often provided by a finance house.

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2
Q

Leasing.

A

Renting or hiring equipment or property.

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3
Q

Retained Profit.

A

The profit held by a business rather than returning it to the owners.

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4
Q

Short-Term Finance.

A

Money borrowed for one year or less.

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5
Q

Debenture.

A

A long-term loan to a business.

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6
Q

Gearing.

A

The amount of capital raised from loans in relation to the amount raised from the sales of shares.

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7
Q

Long-Term Finance.

A

Money borrowed for more than one year.

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8
Q

Mortgage.

A

Long-term loan secured with property.

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9
Q

Share Capital.

A

Money raised from the sale of shares in a limited company.

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10
Q

Venture Capitalists.

A

Specialists (individuals or financial institutions), which provide funds for businesses, usually in exchange for an equity stake.

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11
Q

Working Capital Cycle.

A

The flow of liquid resources into and out of a business.

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12
Q

Cash Outflows.

A

The flow of money out of a business.

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13
Q

Working Capital.

A

The funds left over to meet day-to- day expenses after current debts have been paid. It is calculated by current assets minus current liabilities.

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14
Q

Budget.

A

A plan that shows how much money a business expects to spend or receive in a specified period.

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15
Q

Cash Flow.

A

he flow of money into and out of a business.



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16
Q

Cash Flow Forecast.

A

The prediction of all expected receipts and expenses of a business over a future time period which shows the expected cash balance at the end of each month.

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17
Q

Cash Inflows.

A

The flow of money into a business.



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18
Q

Liquid Asset.

A

An asset, which is easily changed into cash.

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19
Q

Net Cash Flow.

A

The difference between the cash flowing in and the cash flowing out of a business in a given time period.

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20
Q

Costs.

A

Expenses that must be met when setting up and running a business.

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21
Q

Direct Cost.

A

A cost which can be clearly identified with a particular unit of output.

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22
Q

Fixed Costs.

A

Costs that do not vary with the level of output.

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23
Q

Indirect Cost or Overhead.

A

A cost, which cannot be identified with a particular unit of output. It is incurred by the whole organisation or department.

24
Q

Total Costs.

A

Fixed cost and variable cost added together.

25
Q

Total Revenue.

A

The money generated from the sale of output. It is price multiplied by quantity.

26
Q

Variable Costs.

A

Costs, which rise as output levels are increased.

27
Q

Break Even.

A

The level of output where total costs & total revenue are exactly the same. Neither a profit nor a loss is made.

28
Q

Break-Even Chart.

A

A graph, which shows total cost and total revenue. The break-even pint is where total cost and total revenue intersect.

29
Q

Margin of Safety.

A

The amount of output available to be sold above the break-even point where the business makes a profit.

30
Q

Distributed Profit.

A

Profit that is returned to the owners of a business.

31
Q

Dividend.

A

Money paid to shareholders (owners of the business) when profit is distributed.

32
Q

Gross Profit.

A

Sales revenue less cost of sales.

33
Q

Net profit.

A

Gross profit less expenses.

34
Q

Profit.

A

The money left over after all costs have been subtracted from revenue.

35
Q

Profit and Loss Account or Income Statement.

A

A financial document showing a firm’s income and expenditure in a particular time period.

36
Q

Profit and Loss Account.

A

Shows how net profit is calculated by subtracting expenses from gross profit.

37
Q

Profit and Loss Appropriation Account.

A

Shows how the profit after tax is distributed between owners and the business.

38
Q

Retained Profit.

A

Profit that is kept by the business and may be used in the future.

39
Q

Trading Account.

A

Shows how gross profit is calculated by subtracting cost of sales from turnover.

40
Q

Assets.

A

Resources used or owned by the business in production.

41
Q

Balance Sheet.

A

A summary at a point in time of business assets, liabilities and capital.

42
Q

Capital.

A

A source of funds provided by the owners of the business used to buy assets.

43
Q

Current Assets.

A

Assets likely to be changed into cash within a year.

44
Q

Current Liabilities.

A

Debts that have to be repaid within a year.

45
Q

Drawings.

A

The money taken from the business by the owner for personal use.

46
Q

Fixed Assets.

A

Assets with a life span of more than one year.

47
Q

Liabilities.

A

The debts of the business, which provide a source of funds.

48
Q

Long-Term Liabilities.

A

Debts that are payable after 12 months.

49
Q

Net Assets.

A

The total at the bottom of the first part of the balance sheet. It is the value of all assets less the value of all liabilities.

50
Q

Net Current Assets.

A

Current assets minus current liabilities. Also, known as working capital.

51
Q

Auditing.

A

An accounting procedure, which checks thoroughly the accuracy of a company’s accounts.

52
Q

Acid Test Ratio.

A

Similar to the current ratio but excludes sticks from current assets. Sometimes called the quick ratio.

53
Q

Current Ratio.

A

Assesses the firm’s liquidity by dividing current liabilities into current assets.

54
Q

Gross Profit Margin or Mark-Up.

A

Grossed profit expressed as a percentage of turnover.

55
Q

Return on Capital Employed (ROCE).

A

The profit of a business as a percentage of the total amount of money used to generate it.

56
Q

Net Profit Margin.

A

Net profit expressed as a percentage of turnover.

57
Q

Ratio Analysis.

A

A numerical approach to investigating accounts by comparing two related figures.

iGCSE Business Studies (5 decks)

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