Business Studies - Unit 2 vocabulary Flashcards
Retained Profit
The profit that has been made by the business in previous years and is then reinvested back into the company.
Sales of assets
When a business sells an item that is no longer needed, in exchange for cash.
Owner’s Capital
The amount of money and resources an owner invests into their business.
Overdraft
A loan given by the bank that allows the business to ask for more money than they have in their account.
Trade Credit
A source of finance offered by suppliers or distributors that allows a business to purchase goods or services now and pay for them at a later date.
Grants
A fixed amount of money usually awarded by the government, NGO’s or non-profit organisations.
Leasing
Renting an asset that the business requires.
Bank loans
It is a fixed amount of money that is given to a business by the bank that has to be repaid over time with interest.
Venture Capital
Money invested by an individual or group that is willing to take the risk of funding a new business in exchange for an agreed share of the profits.
Share Capital
The money invested in a company by the shareholders.
Crowdfunding
Involves a large number of people investing small amounts of money in a business, usually online.
Sales and lease-back
An agreement in which one person or company sells property to another, who then leases the property back to the seller
Limited liability
The business owners’ liability for debts is restricted to the amount they put into the business.
Unlimited liability
The business owner is personally responsible for any loss the business makes.
Peer-to-peer lending (P2PL)
Where individuals lend to other individuals without prior knowledge of them, or the internet.
