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Question 1

Management

Answer 1

monitoring, controlling, protecting, and reporting on a company’s financial resources

Question 2

Compliance

Answer 2

the regulation and enforcement of the laws and rules in finance and the capital markets.

Question 3

Measuring performance

Answer 3

a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues

Question 4

Control

Answer 4

the procedures, policies, and means by which an organization monitors and controls the direction, allocation, and usage of its financial resources

Question 5

Income

Answer 5

the money earned by an individual or business through various sources, including wages, profits, interest, and investments

Question 6

Capital income

Answer 6

income received from the sale of non-current assets of the business,

Question 7

Loan

Answer 7

a sum of money that one or more individuals or companies borrow from banks or other financial institutions so as to financially manage planned or unplanned events.

Question 8

Mortgage

Answer 8

an agreement between you and a lender that gives the lender the right to take your property if you don’t repay the money you’ve borrowed plus interest.

Question 9

Shares

Answer 9

units of stocks issued by a corporation that represent ownership.

Question 10

Owners capital

Answer 10

the amount the owner of a business has invested in it

Question 11

Debenture

Answer 11

a loan agreement in writing between a borrower and a lender that is registered at Companies House

Question 12

Revenue income

Answer 12

the money generated from normal business operations, calculated as the average sales price times the number of units sold

Question 13

Cash sales

Answer 13

a business transaction in which the buyer pays for goods or services at the time of the purchase.

Question 14

Credit sales

Answer 14

a sale in which the amount owed will be paid at a later date.

Question 15

Rent received

Answer 15

the rent excluding the reimbursement of expenses directly related to the temporary letting of the house

Question 16

Commission received

Answer 16

When a business receives an extra amount from any person for any services rendered which benefitted the business.

Question 17

Interest received

Answer 17

the charge for borrowing money

Question 18

Discount received

Answer 18

the reduction in price that a buyer gets from a seller

Question 19

Capital expenditure

Answer 19

money invested by a company to acquire or upgrade fixed, physical or nonconsumable assets

Question 20

Non-current assets

Answer 20

a company’s long-term investments, and cannot be converted to cash easily within a year.

Question 21

Intangible

Answer 21

a non-physical asset such as a patent, brand, trademark, or copyright

Question 22

Revenue expenditure

Answer 22

short-term business expenses usually used immediately or within one year

Question 23

Inventory

Answer 23

all the items, goods, merchandise, and materials held by a business for selling in the market to earn a profit

Question 24

Rent

Answer 24

an amount of money earned that exceeds that which is economically or socially necessary

Question 25

Rates

Answer 25

the amount a lender charges a borrower and is a percentage of the principal—the amount loaned.

Question 26

Heating and lighting

Answer 26

Considered as direct expenses

Question 27

Marketing

Answer 27

the process of helping to plan, deliver and promote financial products and services to a chosen audience

Question 28

Insurance

Answer 28

a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury.

Question 29

Administration

Answer 29

the job of managing financial tasks for a company or organization

Question 30

Bank charges

Answer 30

fees banks deduct for the services they provide

Question 31

Interest paid

Answer 31

the periodic payments made by borrowers to lenders as compensation for the use of borrowed money.

Question 32

Straight line depreciation

Answer 32

a common method of depreciation where the value of a fixed asset is reduced over its useful life. Formula: Straight line depreciation = (cost of the asset – estimated salvage value) ÷ estimated useful life of an asset.

Question 33

Reducing balance depreciation

Answer 33

an accelerated depreciation system of recording larger depreciation expenses during the earlier years of an asset's useful life

Question 34

Discount allowed

Answer 34

the reduction in price a seller gives to a buyer as an incentive or concession in sales.