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Start up ________ (finance needed by new businesses to pay for non- current and current assets before it can begin trading)
Income statement
________: shows if the business is making a PROFIT or LOSS.
Statement
________ of financial position: a financial account which shows what the business is worth at any given period of time.
Cash
________: the actual money the business has in its bank account.
Gross profit
________= revenue-cost of sales.
Reward
________ for risk taking- profits ________ entrepreneurs for taking risks and allowing payments to be made.
Revenue expenditure
________ (money spent on day- to- day expenses* do not involve the purchases of long- term assets)
Capital expenditure
________ (money spent on non- current assets which will last for more than a year)
Source of finance
________- profits after payments to owners are a very important source of finance for businesses.
Indicator of success
________- if some businesses are profitable, profit can be an indicator for other businesses as to whether producing similar goods or services would be profitable.
Profit
________ can be increased by increasing total revenue or decreasing total costs.
Capital
________: money invested into the business by the owners.
Accounts
the financial records of a firms transactions
Income statements
a financial statement that records the income of a business and all costs incurred
Profit = Total revenue
Total costs
Cash
the actual money the business has in its bank account
Trading account
shows the information at the top of a cashflow forecast (revenue and cost of sales), and how to calculate gross profit
Revenue/sales/sales revenue/total revenue
the amount earned from the sales of products
Cost of sales
the cost of purchasing the goods used to make the products sold
Cost of sales = cost per unit x number of sales Gross profit
the difference between revenue and cost of sales
Gross profit = revenue
cost of sales
Expenses
the day-to-day costs of running a business
Net profit
the actual profit after expenses (not including gross profit) have been paid
Net profit = gross profit
expenses/overheads
Reward for enterprise
entrepreneurs may have important qualities and characteristics and profit rewards them for this)
Reward for risk taking
profits rewards entrepreneurs for taking risks and allowing payments to be made
Source of finance
profits after payments to owners are a very important source of finance for businesses
Indicator of success
if some businesses are profitable, profit can be an indicator for other businesses as to whether producing similar goods or services would be profitable
Statement of financial position
a financial account which shows what the business is worth at any given period of time
Business assets
something owned by the business
Liabilities
something owed by the business
Capital
money invested into the business by the owners
Income statement
shows if the business is making a PROFIT or LOSS
Assets
Inventories, Van/truck, Debtors, Cash
Liabilities
Overdrafts, Mortgages, Trade creditors
capital
Start up ________ (finance needed by new businesses to pay for non- current and current assets before it can begin trading)
Accounts
________: the financial records of a firms transactions.
Profit
________ can be increased by increasing total revenue or decreasing total costs.
Accounts
the financial records of a firms transactions
Income statements
a financial statement that records the income of a business and all costs incurred
Note
Flashcard