Key Words

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  • Favourable Variance - actual figures are better than the budgeted figures
  • Adverse Variance - actual figures are worse than budgeted figures
  • Budgets - a budget is a financial plan for the future concerning revenues and costs
  • Comprehensive Income Statement - record of revenues and costs over a time period
  • Statement of financial position - summary of the assets and liabilities
  • Liquidity - a measure of the firms ability to meet the day-to-day expenditure, concerning the liquid assets
  • Sales Forecasting - an estimate of future sales, done month by month
  • Internal finance - money generated by the business owners, doesn't increase debts
  • External finance - money gained from sources outside of the business
  • Limited liability - all debts belong to the corporation and not the shareholders
  • Unlimited liability - all debts of the business are legally those of the owners
  • Semi-variable Costs - costs having both a fixed and variable nature about them
  • Variable Costs - costs that vary directly with output
  • Fixed Costs - costs that do not vary with output in the short-term
  • Cash flow forecast - an estimate of when and how much money the business will recieve and pay
  • Slump: period of deep and long fall in output
  • Recession: period where growth and output becomes negative for 2 consequtive quarters
  • Recovery: movement in the economy taking it from below it's productivite potential to reaching its pp
  • Boom: period of strong economy, around it's pp
  • Automation: machienery controlled by computers
  • Mechanisation: machienery controlled by workers
  • CAD: computer-aided design
  • CAM: computer-aided manufacture
  • CIM: computer-intergrated manufacture

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