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Financial transactions

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Finance

1st

34 Terms

1

Financial transactions

an agreement which is carried between buyer and a seller to exchange asset of payment.

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2

(HMRC) Her Majesty's Revenue and Customs

is a non-ministerial department of the UK government responsible for the collection of tax

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3

Fraud

Is a criminal deception intended to result in financial or personal gain

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4

Profit

sales revenue - total costs

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5

Loss

Is the amount of money lost in a business or organization

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6

Gross profit

sales - the cost of sales

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7

Sales Revenue

quantity sold x the selling price

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8

Net profit

Is the actual profit after the working expenses gross profit - other expenses

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9

Trade payables

The money the business owes from supplies purchased but not yet paid for. THE BUSINESS OWES

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10

Trade receivables

The money owed to the business from sales made but not yet paid for. THEY OWE THE BUSINESS

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11

Capital income

capital income is the money used to set up a business. it is a long term investment.

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12

Fixed assets

Items of value owned by a business that are really likely to stay in business for more than one year. For example machinery. Also known as non-current assets.

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13

Revenue income

This is income received by the business on sales of its goods and services.

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14

expenditure

money spent by the business

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15

Capital expenditure

These are assets - capital items - that the business plans to use over a long period of time. there are 2 types of assets - non-current (tangible) and intangible.

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16

Revenue expenditure

the day-to-day costs incurred in running a business

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17

Capital items

assets bought from capital expenditure such as machinery and vehicle that will stay in the business for more than a year.

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18

Statement of financial position

a financial document that shows the net worth of a business by balancing its assets against its liabilities. It is often called a balance sheet

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19

Trademarks

is a symbol or word that represent a company

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20

Goodwill

it's represents the business

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21

patents

t's a license that you can sell your products for a certain number of years

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22

Brand name

is name given by the marker for the product

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23

capital expenditure

Is used to buy capital items which are long term asset.

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24

inventory

a list of items such as property, and goods in stock. revenue expenditure

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25

Discount allowed

when the seller grants discount to buyers. revenue income

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26

rent

regular payment to a landlord. revenue expenditure

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27

Administration

the activity of running the company. revenue expenditure

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28

depreciation

the value of the asset reduces

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29

types of revenue expenditure

water insurance administration- paperwork required to run a business telephone - administrative cost postage - administrative cost stationery and printing- administrative cost salaries - annual sum of money marketing - reducing-balance depreciation straight-line depreciation wages bank charges interest paid (on mortgages/loans) discount allowed inventory rent rates heating and lighting.

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30

capital expenditure non current assets/ tangible

land buildings and premises machinery and equipment vehicles fixtures and fittings

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31

capital expenditures intangible assets

Goodwill patents trademarks brand names

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32

revenue income

credit sales - through sales using a method of credit

rent received - when a business rents out a property it owns

commissions received - when a business acts as an agent for another business and receives a percentage of every sale

interest received - money owned on saving or lending

discount received - when a business pays a reduced price for goods and services

cash sales - through over the counter sales

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33

capital income

mortgage shares loan debentures - a type of bond issued by large companies to raise money. owners capital

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34

net current assets

current assets - current liabilities

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