Chapter 21

Question 1

Start-up capital

Answer 1

The finance required by a new business to pay for the essential fixed assets and current assets so that it can start trading

Question 2

Working capital

Answer 2

Capital available to a business in the short term to pay for day-to-day expenses

Question 3

Capital expenditure

Answer 3

The money spent on non current assests lasting more than one year

Question 4

Revenue expenditure

Answer 4

Money spent on day to day expenses

Question 5

Intrenal finance

Answer 5

Finance from within the business itself

Question 6

Extrenal finance

Answer 6

Finance form sources outside of and separate form the business

Question 7

Micro-finance

Answer 7

This provides financial services to poor people who cannot use traditional banks

Question 8

Short tem source of finance

Answer 8

Finance obtained for a time frame exceeding one year in duration and includes> owners savings/share capital, loans, debentures, mortage, hire purchase or leasing and grants

Question 9

Long term source of finance

Answer 9

Funding obtained for a time frame exceeding one year in duration and oncludes< owners savings/share capital, loans, debentures, mortage, hire purchase or leasing and grants