Question 1

What is left after costs have been deduced from revenue. Profit = Total revenue – total costs.

Accepted Answer

Profit

Question 2

These are expenditures made by a business as part of its trading operations.

Accepted Answer

Costs

Question 3

The value of sales made during a trading period. Total revenue = selling price x number of items sold.

Accepted Answer

Revenue

Question 4

Costs that do not change with the level of output or sales.

Accepted Answer

Fixed Costs

Question 5

Costs that change directly with the level of output or sales.

Accepted Answer

Variable Costs

Question 6

Fixed costs + variable costs.

Accepted Answer

Total Costs

Question 7

This is the difference between sales revenue and variable costs of production.

Accepted Answer

Contribution

Question 8

This is the difference between the selling price of one unit and the variable cost of producing one unit.

Accepted Answer

Contribution per Unit

Question 9

Unit contribution x no. of units sold.

Accepted Answer

Total Contribution

Question 10

This is the level of output or the number of customers that earns enough revenue to cover total costs of production.

Accepted Answer

Break-even Level of Output

Question 11

This is the amount by which the existing level of output is greater than the break-even point.

Accepted Answer

Margin of Safety

Question 12

The total cash payments (inflows) into a business minus the total cash payments (outflows).

Accepted Answer

Cash Flow

Question 13

This is turning assets into cash and may be insisted on by courts if suppliers have not been paid.

Accepted Answer

Liquidation

Question 14

When a business cannot meet its short-term debts.

Accepted Answer

Insolvent

Question 15

Payments in cash received by a business such as those from customers or from the bank e.g. receiving a loan.

Accepted Answer

Cash Inflows

Question 16

Payments in cash made by a business such as those to suppliers and workers.

Accepted Answer

Cash Outflows

Question 17

These are customers who have bought products on credit and will pay cash at an agreed date in the future.

Accepted Answer

Debtors

Question 18

Value of goods sold to customers who do not pay cash immediately.

Accepted Answer

Credit Sales

Question 19

An estimate of the firm’s future cash inflows and outflows.

Accepted Answer

Cash Flow Forecast

Question 20

The estimated difference between monthly cash inflows and outflows.

Accepted Answer

Net Monthly Cash Flow

Question 21

Cash held by the business at the start of the month.

Accepted Answer

Opening Balance

Question 22

Cash held at the end of the month – becomes next month’s opening balance.

Accepted Answer

Closing Balance

Question 23

Financial targets for the future covering revenue (income) and expenditure over a certain time period.

Accepted Answer

Budgets

Question 24

A fixed sum of money to be spent in a given time period by a department.

Accepted Answer

Expenditure Budgets

Question 25

A person who is accountable for seeing that a budget is kept to.

Accepted Answer

Budget Holder

Question 26

The sales revenue target for a department or the whole business.

Accepted Answer

Income Budget

Question 27

Giving some control in the setting and spending of budgets to departments or individuals.

Accepted Answer

Delegated Budgets

Question 28

The target profit for the business over a given time period.

Accepted Answer

Profit Budget

Question 29

Keeping a check on progress towards achieving targets during the budget period.

Accepted Answer

Monitoring Budgets

Question 30

Clearly defined targets for a business to achieve over a certain time period.

Accepted Answer

Business Objectives

Question 31