3.1 Introduction to finance

Capital Expenditure

Money spend to acquire fixed assets in a business.

Revenue Expenditure

Money used in the day-to-day running of a business.

Fixed assets

Assets that will last for more than a year and be used over and over again. Needed for the purpose of generating ioncome for the business over the longer term.

Collateral

In the acquisition of a fixed assets, financial institutions may demand some form of financial security pledged for repayment.