For exam!! Flashcards Preview

Business studies exam > For exam!! > Flashcards

Flashcards in For exam!! Deck (20):
1

What is a fixed asset?

A fixed asset is anything that you own as a business that can be useful to your business for longer than one year.

2

What are two examples of fixed assets?

Premises
Transport (van)

3

What is a current asset?

A current asset lasts less than 12 months. Once you use them they then they have gone and need to be replaced.

4

What are two examples of current assets?

Materials
Debtors

5

What is a current liability?

Current liabilities are things that a business will need to pay out for within 12 months.

6

What are two examples of current liabilities?

Rent
Overdraft

7

What is a long term liability?

A long term liability is something that you owe that can be payed back after a year.

8

What are two examples of long term liabilities?

Loans
Mortgages

9

What is working capital (net current assets formula)?

Current assets - current liabilities

10

What is the formula for net assets?

Total assets - total liabilities.

11

What is the margin of safety?

Difference between your break even point and the number of units you sell.

12

What is an income statement?

Statement of income and expenditure - usually produced every 12 months.

13

How do you calculate revenue?

selling price x number of products sold

14

How do you calculate profit?

revenue - total costs

15

How do you calculate gross profit?

revenue- cost of sales

16

How do you calculate net profit?

gross profit - expenses

17

2 examples of fixed costs?

Rent and salaries

18

2 examples of variable costs

Materials and tax.

19

2 sources of external finance

Loan from family and friends + loan from bank.

20

2 examples of internal finance

Revenue + sell fixed assets