Finance for unit 2 4.0 / 5 based on 3 ratings ? BusinessfinanceBTEC NationalAQA Created by: Mia 0Created on: 25-11-15 15:25 Start-up Costs The amount of money spent setting up a business before it starts running 1 of 27 Operating costs or running costs Money spent on a regular basis to keep a business running 2 of 27 Income Money which is paid into a business 3 of 27 Fixed costs or indirect costs Expenditure on items which does not change with the number of items sold or produced 4 of 27 Variable costs or direct costs Costs which vary according to the number of iems sold or produced 5 of 27 Total costs the total amount of money spent running a business over a certain period of time 6 of 27 Expenditure Money that a business spends 7 of 27 Overheads The everyday running costs of the business 8 of 27 Profit Occurs when revenue is more than expenditure 9 of 27 Loss Occurs when expenditure is more than revenue 10 of 27 Budgeting Planning future expenditure and revenue targets with the aim of ensuring profit is made 11 of 27 Budgetary control The process of checking which is actually happening comparing this with the plan and taking action if things are not correct 12 of 27 Cash inflows The amounts of money entering a business's bank account 13 of 27 Cash outflows The amounts of money leaving a bussiness's bank account 14 of 27 Net cash flow The difference bewteen the cash inflows and outflow figures over a particular time period 15 of 27 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 16 of 27 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 17 of 27 Capital Money spent by the business on items which should last a long time 18 of 27 Costs of sales The cost of producing a product 19 of 27 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 20 of 27 Net profit The money made from selling a product after all costs (expenditure) have been deductaed from the gross profit 21 of 27 Assests Items that a business buys that normally last a long time, such as a van or a computer or money it is owned 22 of 27 Debtors People who owe money to the business for goods or services they have recieved. 23 of 27 Liabilities Amounts of money which a business owes 24 of 27 Share Capital The amount of money invested in the business by the shareholders 25 of 27 Working Captial or net current assests Money the business can raise quickly which is calculated by deducting current liabilities from current assests 26 of 27 Reserves Money that has been saved from previous profitable years 27 of 27
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