Unit 3 - Finance

Question 1

What are some sources of finance?

Answer 1

• Bank overdraft
• Hire purchase
• Retained profits
• Bank loan
• Grant

Question 2

what would be some suitable sources of finance for a partnership?

Answer 2

• Bank loans
• overdrafts
• leasing

Question 3

what are the three types of costs?

Answer 3

• fixed
• variable
• total

Question 4

define a fixed cost

Answer 4

• Costs that always stay the same, no matter how many units of a product are made.

Question 5

define a variable cost

Answer 5

• Costs that change depending on how many units of a product are made.

Question 6

define a total cost

Answer 6

• Fixed Costs + Variable Costs

Question 7

what is revenue?

Answer 7

• Revenue is the name given to money that a business receives through selling a product.

Question 8

how do you calculate total revenue?

Answer 8

• selling price x units sold

Question 9

what is the formula used to calculate profit?

Answer 9

• Profit = Total Revenue (TR) – Total Costs (TC)

Question 10

what is a cash budget?

Answer 10

• A list of cash the business expects to receive and the cash expected to be paid out of the business over a period of time.

Question 11

State what types of technology can be used in the finance department of a business

Answer 11

• spreadsheets
• Email
• Internet

Question 12

describe the types of technology that are used in the finance department

Answer 12

• widely used to record and edit numerical information.
• used to circulate information quickly
• used to compare lenders for the best deal. Taxation can be paid on line using the government website.