Business Key Terms

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Revenue
The money earned from selling, based on the level of output and selling price per unit
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Net Cash Flow
The difference between money coming in and out of a business
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Profit
The surplus left over from revenue after paying total costs
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Cash Flow
The movement of money into and out of the business
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Loss
The deficit of revenue after paying total costs
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Insolvent
When a business is unable to pay its debts
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Opportunity Cost
A benefit, profit or other advantage that must be given up to acquire or achieve something else
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Costs
The expenses a business incurs when producing and supplying products and services to customers
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Depreciation
The cost of an asset consumed over its useful life due the wear and tear
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Break even
The point at which the level of sales allows total costs to equal the revenue, at the break even point a business makes no profit or loss
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Margin of Safety
The amount a business sells in excess of its break-even point
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Cost of sales
The total amount a business has paid to create a product or service that has been sold
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Assets
Resources that the business owns
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Cash Flow Forecast
An accounting report that outlines predicted future inflows and outflows of cash per month over a given time
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Cash Flow Statement
Records the actual inflows and outflows of cash per month over a given time
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Income (profit and loss) Statement
Shows the revenue and expenses for a business over a period of time, also shows the profit the business has made
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Statement of Financial Position (Balance Sheet)
A snapshot of the businesses financial health at a particular time, total assets must equal the total liabilities and owners equity
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Equity
How much a business is worth
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Current Liabilities
Debts due within 12 months
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Long-Term Liabilities
Debts that will last longer than 12 months
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Liabilities
Debts owed by an organisation
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Other cards in this set

Card 2

Front

The difference between money coming in and out of a business

Back

Net Cash Flow

Card 3

Front

The surplus left over from revenue after paying total costs

Back

Preview of the back of card 3

Card 4

Front

The movement of money into and out of the business

Back

Preview of the back of card 4

Card 5

Front

The deficit of revenue after paying total costs

Back

Preview of the back of card 5
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