Unit 5 : Finance And Accounting

Question 1

Start up capital

Answer 1

Capital required ; set up business 👩‍💼

Question 2

Working capital

Answer 2

Used to pay for day to day expenses

Question 3

Capital expenditure

Answer 3

Purchasing assets that last longer than a year

Question 4

Revenue expenditure

Answer 4

Spending on all costs and assets

Question 5

Liquidity

Answer 5

Ability to pay its short term debts

Question 6

Liquidation

Answer 6

When a firm ceased trading and its assets are sold for cash to pay suppliers and other creditors

Question 7

Overdraft

Answer 7

Bank agrees to borrow a business money to an agreed limit as when required

Question 8

Factoring

Answer 8

Selling claims over trade receivables to a debt factor in exchange for immediate liquidity. Only a proportion of the value of the debts will be received as cash

Question 9

Hire purchase🚙

Answer 9

An asset sold
Company pays fixed payments
Over and agreed time period

Question 10

Leasing ✨

Answer 10

Allowed to use equipment from other firm

Pay rental over a fixed period

Question 11

Equity finance 💵

Answer 11

Permanent finance

From sale of shares

Question 12

Long term loans

Answer 12

Can be repaid after a year

Question 13

Debenture’s 🏣💸

Answer 13

Bonds issued to companies (investor)

To raise debt finance

Question 14

Rights issue ✨💃🏽

Answer 14

Existing shareholders
Additional shares
at discounted price

Question 15

Venture Capital 📲

Answer 15

Risk capital invested in business start ups

Question 16

Crowd funding 👯‍♀️👯

Answer 16

Acquiring small amounts of capital from a large # of individuals

Question 17

Micro finance 💸💸

Answer 17

Offers financial services to those who lack access to banking services

Question 18

Business plan📑📑

Answer 18

Detailed document that helps businesses get finance from banks or investors