Business BTEC Finance Flashcards
all the key terms that i will need for the BTEC finance test (54 cards)
Example of start-up costs
painting, equipment and decoration
Example of operating costs
stock, wages and utilities
Definition of costs
money out of a business
Definition of start-up costs
one off costs for items businesses need to start up
Definition of operating costs
ongoing costs businesses have to pay on a day to day basis
Definition of fixed costs
costs that do not change with output
Definition of variable costs
costs that change with output
Definition of direct costs
costs that are directly linked to the production of a product or service
Definition of indirect costs
costs that aren’t directly linked to the production of a product or service
Equation for total costs
fixed costs + variable costs
Definition of revenue
money that is going into a business
Equation for revenue
quantity sold x price per product
Definition of expenditure
money that a business pays out
Definition of overheads
everyday running costs
Definition of profit
when revenue is greater than expenditure
Definition of loss
when expenditure is greater than revenue
Definition of break-even
when a business makes no profit and no loss and the revenue and costs are equal
Definition of margin of safety
the difference between the break-even point and the actual units sold
Definition of budget
a plan of inflows and outflows in an organisation
Definition of revenue budget
a plan of expected inflows
Definition of expenditure budget
a plan of expected outflows
Definition of cash flow forecast
a prediction of inflows and outflows of money in an organisation
Definition of opening balance
money carried from the previous months closing balance
Definition of closing balance
the figure in the bank at the end of the month
