Chapter 11 Flashcards Preview

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Flashcards in Chapter 11 Deck (25)
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1
Q

Risk management

A

Identifying key business risks, their likely effect on the business and putting plans in place to minimize them from happening

2
Q

Methods of Risk Reduction

A
Fireproof Materials
Security devices
Security systems
Contingency plans
Copies of valuable documents
3
Q

Business insurance

A
Property insurance 
Key person insurance 
Public liability insurance 
Product liability insurance 
Fidelity guarantee insurance
4
Q

Fidelity guarantee insurance

A

Dishonesty and fraud by an employee

5
Q

Principles of insurance

A
Insurable interest
Utmost good faith
Indemnity - average clause
Contribution
Subrogation
6
Q

Similarities between households and business insurance

A

Identify and manage possible risks
Insure against all reasonable risks
Fill out proposal form
Insurance policy

7
Q

Taxes businesses pay

A

Corporation tax - profits by companies
Value added tax
Custom duties - imports from outside EU
PRSI

8
Q

Form P21

A

Tax rebate

9
Q

Form P45

A

When leaving a job

10
Q

Form P60

A

Amount of pay, income tax and PRSI paid by an employe

11
Q

Tax evasion

A

Tax payers illegally evade paying the full amount of tax owed

12
Q

Tax Avoidance

A

Taxpayers take advantage of the tax system to legally reduce the amount of tax they owe

13
Q

Insurance

A

A contract where the insured pays a premium to the insurer for a promise to compensate the insured in the event of a financial loss occurring

14
Q

Importance of Insurance

A
Business survival is protected
Improves cash flow 
Can save money
Makes exporting easier
Greater financial security and peace of mind
15
Q

How to be Insured

A

Contact insurance company
Proposal form (applying for insurance cover)
Risk is assessed and premium is calculated
Policy is issued
Claim is made

16
Q

Insurable Interest

A

The person must benefit from the continued existence of the item being insured and suffer financially from its loss

17
Q

Utmost Good Faith

A

The insured must give truthful information and disclose all relevant facts when applying for insurance

18
Q

Indemnity

A

You cannot profit from insurance
The insurer compensates for the actual financial loss suffered
Over-insurance and under-insurance

19
Q

Average Clause Formula

A

Sum insured
——————- X Loss
True Value

20
Q

Contribution

A

When two or more insurers are involved

they will divide the total cost of the claim between them

21
Q

Subrogation

A

Insurers can sue the third party who caused the loss of an item to occur after paying full compensation

22
Q

How does Taxation affect Business

A

Lower profits
Higher costs
Higher prices
Locate to take advantage of incentives

23
Q

Tax Audit

A

A detailed examination by the Revenue Commissioners

In the event of out of work

24
Q

Capital Acquisitions Tax

A

Tax on money as a gift inheritance

25
Q

Tax Credit

A

Amount of money one can earn tax-free

Reduces the amount of tax owned