Unit 5 Finance Flashcards
(51 cards)
What is Start-up capital?
The finance needed by a new business to pay for essential fixed and current assets before it can begin trading
What is working-capital?
The finance needed by a business to pay its day-to-day costs.
What is capital expenditure
The money spent on fixed assets which will last for more than one year
What is revenue expenditure
The money spent on day-to-day expenses which do not involve the purchase of a long-term asset, for example wages or rent
What is internal finance?
The fincance obtained from within the business itself
What is external finance?
The obtained from sources outside of and separate from the business
What is Micro-finance?
The providing financial services including small loans to poor people not served by traditional banks
What is cash flow?
The cash flow of a business is the cash inflows and outflows over a period of time
What is cash inflows?
The sums of money received by a business during a period of timeWh
What is cash outflows?
The sums of money paid out by a business during a period of time
What is a cash flow cycle?
The stages between paying out cash for labour, materials etc. and receiving cash from the sale of goods
What is profit?
The surplus after total costs have been subtracted from sales revenue
What is a cash flow forecast?
The estimate of future cash inflows and outflows of a business, usually on a month-by-month basis. This then shows the expected cash balance at the end of each month
What is an opening cash balance?
The amount of cash held by the business at the start of the month
What is the net cash flow?
The differences between inflows and outflows.
What is closing cash balance?
The amount of cash held by the business at the end of each month. This becomes next month’s opening cash balance.
What is working capital?
The capital available to a business in the short term to pay for day-to-day expenses
What are accounts?
The financial records of a firm’s transactions
What are accountants
The professionally qualified people who have responsibility for keeping accurate accounts and the producing the final accounts
What are final accounts
The produced at the end of the financial ear and give details of the profit or loss made over the ear and the worth of the business
What is an income statement?
A document that records the income of a business and all costs incurred to earn that income over a period of time. It is also known as a profit and loss account
What is gross profit?
When sales revenue is greater than the costs of goods sold
What is sales revenue?
The income to a business during a period of time from the sale of goods or services
