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Question 1

What are the two types of income?

Answer 1

Capital Income
Revenue Income

Question 2

What are the 5 parts of capital income?

Answer 2

Loan, mortgage, Debentures, Shares, Owner’s Capital

Question 3

What are cash sales?

Answer 3

over counter transactions

Question 4

What are credit sales?

Answer 4

sales using method of credit

Question 5

What is Rent recieved?

Answer 5

business rents out its property

Question 6

What is Commission received?

Answer 6

business acts as an agent and recieves percentage of sales

Question 7

What is interest recieved?

Answer 7

money earned from saving or lending

Question 8

What is Discount recieved?

Answer 8

business pays reduced price for goods and services

Question 9

What is a loan?

Answer 9

money lent from a bank or person, charges interest

Question 10

What is a debenture?

Answer 10

type of bond or other form of debt not secured by collaterol.

Question 11

What is an owners capital?

Answer 11

owner invests own savings, may be sole trade or partnership

Question 12

What are shares?

Answer 12

issued by companies to shareholders, investors may recieve dividends.

Question 13

What is a mortgage?

Answer 13

Loan usually for property, property is secured and it will be paid back over 25 years

Question 14

What is Capital expenditure?

Answer 14

assets that a business plans to use over a long period of time

Question 15

What are intangible assets?

Answer 15

not physical items (difficult to sell)
like goodwil - additional value to a business
patents and trademarks too

Question 16

What is depreciation?

Answer 16

asses like machinary + office furniture lose value when used,

Question 17

what is straight line depreciation?

Answer 17

value of an asset loses value by the same amount each year over its life

Question 18

What is reducing balance depreciation?

Answer 18

a method to help you calculate the rate of depreciation of an asset

Question 19

What are non-current assets?

Answer 19

Land, Buildings and premises, machinery and equipment, vehicles, fixtures and fittings

Question 20

What are intangible assets?

Answer 20

Goodwill, Patents, Trademarks and Brand Names

Question 21

What are the 3 types of internal source?

Answer 21

Retained Profit
Net Current Assets
Sale of Assets

Question 22

What is retained profit?

Answer 22

profits that are kept in the business and not distrubted to owners or shareholders.

Question 23

What is sale of assets?

Answer 23

anything that a business owns and sells to get cash (money)

Question 24

What is net of current assets?

Answer 24

money that is immediatley available to a business

Question 25

Positive and negative of retained profit?

Answer 25

+ does not have to be repaid and no interest - not available to new businesses, may not make sufficient profits

Question 26

Positive and negative of Net Current Assets?

Answer 26

+ quick way to raise money, sell of inventory to reduce costs - may ahve to accept to lower price for its inventory

Question 27

What is owners capital?

Answer 27

amount the owner has invested into the business

Question 28

What is loans?

Answer 28

money borrowed by a person from a company paid back at an interest.

Question 29

What is crowd-funding

Answer 29

practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount.

Question 30

What is mortgages

Answer 30

an agreement on an amount of money given by a bank to buy a house paid bank in amounts for a chosen amount of time (typically 25 years)

Question 31

What is venture capital

Answer 31

capital invested in a project that has significant risk

Question 32

What is mortgages?

Answer 32

an agreement on an amount of money given by a bank to buy a house paid bank in amounts for the next 25 years

Question 33

What is debt factoring?

Answer 33

when a business sells its accounts receivables to a third party at a discount, enabling companies to immediately unlock cash tied up in unpaid invoices (like an asset like a building they also take mortgage)

Question 34

What is hire purhcase?

Answer 34

paying for an item in regular installments while being able to use it

Question 35

What is leasing?

Answer 35

paying an owner for using their asset

Question 36

What is trade credit?

Answer 36

an agreement where the buyer doesn't pay for goods upfront but at a later date

Question 37

What is grants?

Answer 37

money given to a public body

Question 38

What is donations?

Answer 38

money given by people typically for a charity or cause

Question 39

What is peer to peer lending?

Answer 39

They bring together people or businesses that want to lend money with those that want a loan.

Question 40

What is invoice discounting?

Answer 40

a financial service in which a provider lends cash to a company up to the value of its unpaid invoices.