Key words for business

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Over Draft
This occurs if a business pays more out of its bank account than it has (goes below £0)
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Payment terms
Businesses will agree a number of days in which to pay the invoice for the goods they receive
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costs of sales
this is the direct cost to a business of producing a product
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Gross profit
The money made from selling a product after the costs of producing it have been taken away
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Net profit
The money made from selling a product after all overheads have been taken away from the gross profit
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Capital
Money spent by the business on items that should last a long time
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Assets
rights owned by the business e.g premises, equipment as well as money owed by other people (Debtors)
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Fixed Assets
items the business must keep to be able to trade such as a van or computer that can last a long time.
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Current Assets
Are items that can be changed into cash quickly and will change with every transaction
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Debtor/ Trade receivables
people who owe money to a business for goods or services they have received
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Current Liabilities
Money that needs to be paid back within a year, such as trade payable and a bank overdraft
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Trade payables
Are traders to whom the business owes money because the have supplied goods or services
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Money invested
Put into the business by the owner or through share capital by share holders
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Retrained profit
Profits from previous years.
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Share Capital
The amount of money invested in business by shareholders
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Other cards in this set

Card 2

Front

Businesses will agree a number of days in which to pay the invoice for the goods they receive

Back

Payment terms

Card 3

Front

this is the direct cost to a business of producing a product

Back

Preview of the back of card 3

Card 4

Front

The money made from selling a product after the costs of producing it have been taken away

Back

Preview of the back of card 4

Card 5

Front

The money made from selling a product after all overheads have been taken away from the gross profit

Back

Preview of the back of card 5
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