BTEC Business Finance
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
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Financial transaction | Actions by a business that involve money going into or out of a business e.g. paying a bill.
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HMRC | Her Majesty's Revenue & Custom is government department responsible for the collection of taxes.
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Profit | Surplus achieved when total revenue from sales is higher than the total costs of a business.
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Loss | Shortfall suffered when total revenue from sales is lower than the total costs of a business.
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Gross profit | Is sales revenue minus the costs of goods sold.
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Net profit | Is gross profit minus other expenses.
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Revenue | Quantity sold multiplied by the selling price per unit.
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Trade receivables | This is money owed to the business from sales made on credit (debtors).
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Trade payables | This is money the business owes from purchases bought on credit (creditors).
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Capital income | Money invested by the owners or other investors that is used to set up or expand the business,
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Non current assets | Assets owned by the business that have value and will last for more that one year. Also known as fixed assets.
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Assets | Any item of value owned by the firm.
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Loan | A source of capital income, it is an amount of money lent to the business from bank/financial institution for the short-medium term.
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Interest repayment | Paid back with loan repayments as this is the cost of borrowing the money.
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Shares | When you invest in a company you get part-ownership in the business.
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Shareholders | Owners of a business that contribute towards capital income.
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Dividends | The reward shareholders receive from investing in the company.
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Sole trader | A person who sets up and owns their own business.
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Debentures | A medium-long term source of capital income, it is repaid in a lump sum and is secured against an asset.
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Revenue income | Money that comes into the business from its day to day activities e.g. sales.
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Cash sales | The customer pays there and then, sales are immediate.
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Credit sales | The customer buys but then pays at a later date.
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Commission | A fee received based on a percentage of sales made.
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Capital expenditure | This is money spent by the business to buy capital items/non current assets.
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Intangible asset | Owned by the business and adds value but it cannot be touched e.g. trademark.
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Statement of financial position | A document that shows the assets and liabilities and the net worth of the business (balance sheet).
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Revenue expenditure | This is money spent on a day-to-day or regular basis by the business.
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Inventory | This is raw materials purchased, finished goods to be sold - it is also known as stock.
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Rates | These are paid to the local council for services and are based on the size and location of the business.
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Salary | Annual figure paid to an employee divided into equal amounts.
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Wage | An hourly rate paid to an employee based on the work they do.
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Depreciation | An accounting technique used to spread the cost of an asset over its useful life.
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Straight line method depreciation | Asset is depreciated by a set amount each year.
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Reducing balance depreciation | Asset is depreciated by a set percentage each year based on reducing balance.
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Internal sources of finance | Money available to fund expenditure from within business.
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