Finance for unit 2

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  • Created by: Mia 0
  • Created on: 25-11-15 15:25
Start-up Costs
The amount of money spent setting up a business before it starts running
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Operating costs or running costs
Money spent on a regular basis to keep a business running
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Income
Money which is paid into a business
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Fixed costs or indirect costs
Expenditure on items which does not change with the number of items sold or produced
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Variable costs or direct costs
Costs which vary according to the number of iems sold or produced
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Total costs
the total amount of money spent running a business over a certain period of time
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Expenditure
Money that a business spends
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Overheads
The everyday running costs of the business
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Profit
Occurs when revenue is more than expenditure
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Loss
Occurs when expenditure is more than revenue
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Budgeting
Planning future expenditure and revenue targets with the aim of ensuring profit is made
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Budgetary control
The process of checking which is actually happening comparing this with the plan and taking action if things are not correct
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Cash inflows
The amounts of money entering a business's bank account
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Cash outflows
The amounts of money leaving a bussiness's bank account
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Net cash flow
The difference bewteen the cash inflows and outflow figures over a particular time period
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Cash Balance
The amount of money forcast to be in the bank account after the net cash flow figure has been added or subtracted from the existing bank balance
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Overdraft
This occurs if a business pays more out of its bank account than it has in credit. the bank may allow this but will make an extra charge
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Capital
Money spent by the business on items which should last a long time
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Costs of sales
The cost of producing a product
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Gross Profit
The money made from selling a product (the sale revenue) after the cost of producting a product (costs of sales) has been deducted
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Net profit
The money made from selling a product after all costs (expenditure) have been deductaed from the gross profit
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Assests
Items that a business buys that normally last a long time, such as a van or a computer or money it is owned
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Debtors
People who owe money to the business for goods or services they have recieved.
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Liabilities
Amounts of money which a business owes
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Share Capital
The amount of money invested in the business by the shareholders
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Working Captial or net current assests
Money the business can raise quickly which is calculated by deducting current liabilities from current assests
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Reserves
Money that has been saved from previous profitable years
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Other cards in this set

Card 2

Front

Money spent on a regular basis to keep a business running

Back

Operating costs or running costs

Card 3

Front

Money which is paid into a business

Back

Preview of the back of card 3

Card 4

Front

Expenditure on items which does not change with the number of items sold or produced

Back

Preview of the back of card 4

Card 5

Front

Costs which vary according to the number of iems sold or produced

Back

Preview of the back of card 5
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