topic 3 - finance and accounting

Question 1

capital expenditure

Answer 1

long-term expenses, provides long-term benefits
- non-recurring expenditure
- add to the firm’s non-current assets
- expenditure reflects on the balance sheet

Question 2

revenue expenditure

Answer 2

• short-term expenses, provides short-term benefits
• regular expenditures for the operations of the business
• doesn’t add to the value of a firm’s fixed assets
• expenditures reflect on the profit and loss account

Question 3

internal sources of finance

Answer 3

personal funds
retained profit
sale of assets

Question 4

external sources of finance

Answer 4

equity finance:
- business angels
- venture capital
- Share capital

debt finance:
- loan capital
- overdraft
- trade credit
- microfinance

other sources:
- leasing
- crowdfunding