Unit 3 Business Studies Revision

  • Created by: roxy1499
  • Created on: 26-02-17 13:54
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  • Unit 3
    • Types of help organisations
      • Individual Voluntary Arrangement (IVAss) and bankruptcy
        • IVA is an agreement that an individual undertakes with their creditors to pay off all or part of their debts.
        • The individuals assets can be used to pay off debts and there will be bankruptcy restrictions.
      • The money advice service
        • Independent organisation, set up by the government, offers a free and impartial advice to help people manage their money.
      • Independent financial adviser (IFAs)
        • Professional individuals who give independent advice an guidance on a range of financial products e.g. mortgages, pensions and investment
      • Debt counsellors
        • Charity National Debtline provide free debt advice and information on a wide variety of debt related topics, e.g. council tax, loans, hire purchase
          • Hire Purchase- making payments overtime while still using it.
      • Price Comparison Websites
        • These help consumers find the best deal on a range of financial products e.g. mortgages, savings, insurance.
          • Price comparisson is free and can be accessed any time
      • Citizen Advice
        • Charitable organisation which provides "free, confidential and impartial advice" on a variety of financial and non financial issues.
    • Cash Flow
      • Gross Profit
        • Gross profit= total revenue-cost of goods sold
      • Outflows/ Payments
        • The money spent by the business/ the expenses made by the business.
      • Cash flow forecast- a document that shows the predicted flow of cash in and out of the business.
      • Inflows/ Receipts
        • The money made/ the money coming in to the business.
    • Tangible- Can touch
    • Functions of money
      • Unit of account
        • The value of the goods or services
      • Store Value
        • Money has a value,it also can be stored in the bank
      • Means of exchange
        • Trading
      • Legal Tender
        • The legal payment for goods and services
    • Financial Institutions
      • Credit Union
        • Not for profit organisation that handles financial transactions
        • Owned by members and also run.
        • More limited funds and opportunities than commercial banks and building societies.
        • Savings only protected up to £75,000
      • Pension Companies
        • Poor investment decisions by the pension company may result in a disappointing returm
        • Provides a structure o help plan for financial security after retirement.
        • Sells policies to individuals
      • National Savings and Investment
        • Government backed, therefore offering security on 100% of savings with no upper limit.
        • Not easy to access due to lack of high streets.
        • Government backed organisation a secure saving.
      • Insurance companies
        • Protects from unexpected loses or financial expenses.
        • Protects risk of loss in return for a premium
        • Profit making organisation therefore Premium will be charged to ensure shareholder needs are met.
      • Payday loan
        • Businesses that offer short term loans to people requiring cash between paydays.
        • A quick way of acquiring cash needed for a short period of time.
        • Interest rate charges may be very high.
      • Banks
        • Organisation handles financial transactions behalf of its customer.
        • Offers a range of services
        • Savings are protected up to £75,000 and so if the bank goes bankrupt the money can be lost if over £75,000
      • Pawnbraker
        • The asset may be sold if the repayment wont be paid on time.
        • Interest is not charged.
        • Loan money against the security of a personal asset.
      • Building societies
        • Handles financial transactions behalf its members.
        • May lack the business drive of a commercial banks.
        • Owned by members and therefore cost can be kept down allowing for higher interest rates payments.
    • Intangible- Cant touch

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