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New junior cycle business complete not clickbait > Topic 23 - Topic 26 > Flashcards

Topic 23 - Topic 26 Flashcards

1
Q

What is a letter of enquiry?

A

A letter of enquiry is where a buyer makes enquiries by email, phone or via an online enquiry form to find out:
• If goods are available when they are required.
• The best prices on offer.
• How long delivery will take
• How payment should be made (on credit, COD or CWO)
COD = Cash on delivery
CWO = Cash with order

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2
Q

What is a quotation?

A

A quotation is a written document showing the prices available from a supplier for goods or services.

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3
Q

What is effective purchasing?

A

Effective purchasing means obtaining quotations from a number of different suppliers and then choosing the supplier that offers the best deal inn terms of price, quality, delivery and terms of sale.

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4
Q

What is a order?

A

An order is a written request to a supplier to supply particular goods or services to the person named on the order.

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5
Q

What is creditworthiness?

A

Creditworthiness is a measurement of how likely it is that a person will pay a debt in full and on time.

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6
Q

What is a delivery docket?

A

A delivery docket is a document that acts as proof that the buyer received the goods.

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7
Q

What is an invoice?

A

An invoice contains details of the goods supplied, the quantity, price and terms of sale.

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8
Q

What is a trade discount?

A

A trade discount is a reduction in the price of goods that is given by the seller to trade buyers (someone who intends to resell the goods to another person).

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9
Q

What is a credit note?

A

A credit note is a document that indicates the amount that has been deducted from a bill as an allowance for goods that were returned.

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10
Q

What is a debit note?

A

A debit note is a document that shows the extra amount that needs to be paid when a customer has been undercharged.

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11
Q

What is a statement document?

A

A statement is a document that lists all the transactions between a buyer and seller over a period of time and the amount that is still due at the end of the period.

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12
Q

What is a receipt?

A

A receipt is a written document signed by the seller of goods stating that they have received a certain amount of money in payment for the goods.

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13
Q

What is a cash flow?

A

A cashflow statement is a plan that shows all the expected cash receipts and cash payments over a period of time.

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14
Q

What are fixed costs?

A

Fixed costs are business costs that remain the same each time they are paid. For example, rent and mortgage payments.

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15
Q

What are variable costs?

A

Variable costs are business costs that change each time they are paid. For example, wages, materials and electricity.

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16
Q

List reasons for preparing a cash flow statement

A
  • It shows the organisation if they will have enough cash to be able to pay their bills in a particular month.
  • It shows the months there may be a cash deficit.
  • It shows the months when extra cash will be available.
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17
Q

What is short term finance!

A

Finance that should be repaid within one year.

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18
Q

What is medium term finance?

A

Finance that should be repaid between one and five years.

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19
Q

What is long term finance?

A

Finance that should be repaid over a period greater than five years.

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20
Q

What is a trade creditor?

A

A trade creditor is a person or firm to whom a business owes money because they purchased goods or materials from them.

21
Q

What is a bank overdraft?

A

A bank overdraft is when the bank gives an individual or business permission to withdraw more money from their account than is in the account.

22
Q

What are accrued expenses?

A

Accrued expenses are expenses owed by a business, such as insurance, electricity etc. Using accrued expenses as a source of finance involves the business delaying payment of their business expenses for as long as possible and instead, outing the money in the bank where it will earn interest.

23
Q

What is a lease?

A

A lease is an agreement to rent land, buildings, equipment or vehicles.

24
Q

What is a hire purchase?

A

Hire purchase involves three parties: the buyer, seller and a finance company. The finance company pays the seller in full for the asset (equipment, vehicle), then collects the repayments in instalment from the buyer over an agreed period of time.

25
Q

What is equity finance?

A

Equity finance is personal money invested in a new or existing business by its owners.

26
Q

What are grants?

A

Grants are non-repayable sources of finance available from the government and the EU to help people who want to start a new business or expand an existing business. Grants are available from:
• Enterprise Ireland
• Local Enterprise Office
• European Union

27
Q

What is a transaction?

A

A transaction is any agreement between two people to carry out a business activity.

28
Q

What is a trial balance?

A

A trial balance is a list of balances brought down from all the ledger accounts and analysed cash book.

29
Q

What is a income statement?

A

An income statement is an accounting document made up of a firm’s trading account and profit, loss and appropriation account.

30
Q

What is stock control?

A

Stock control is described as having a system in place to make sure that there is neither too much nor too little stock available for sale at any particular time.

31
Q

What is Net Loss?

A

gross profit minus expenses plus gains

32
Q

What is a statement of financial position?

A

A statement of financial position is a list of the assets, liabilities and capital of a company on a particular date.

33
Q

What is deprecation?

A

Depreciation is the reduction in value of a fixed asset due to age and
wear and tear.

34
Q

What are reserves?

A

Reserves is the term used to describe retained profit that is kept for expanding the business.

35
Q

Gross profit percentage

A

Gross Profit x 100

Sales 1

36
Q

What is net profit percentage?

A

Net Profit x 100

Sales 1

37
Q

Calculate return on capital employed (total investment)

A

Net Profit x 100

Capital Employed 1

38
Q

Calculate working capital ratio

A

Current assets: current liabilities

39
Q

Calculate acid test ratio

A

Current assets minus closing stock: current liabilities

40
Q

What is gearing?

A

Gearing looks at how the capital of a business is split between money that has been borrowed from lenders, such as a bank and has to be repaid, and money that has been invested, and does not have to be repaid.
Funds that are borrowed are referred to as debt capital, while funds that have been invested are referred to as equity capital.

41
Q

Calculate gearing

A

Debt capital: Equity capital

42
Q

What is a firm solvent?

A

A firm is solvent if its total assets are greater in value than its external liabilities.

43
Q

What is economics?

A

Economics is the study of how people and businesses with a limited income make decisions about what to spend their money on in order to satisfy their needs and wants.

44
Q

What is the factors of production?

A

The factors of production are the economic resources necessary to produce goods and services. They can be divided into four categories: land, labour, capital and enterprise.

45
Q

What is land (economics)

A

Land refers to all the natural resources available in a country that can be used to produce goods and services. For example, farm-land.

46
Q

What is labour(economics)

A

Labour refers to the people available in a country to help produce goods and services and to the qualifications and skills that they have, for example, plumbers, pilots teachers etc.

47
Q

What is capital (economics)

A

Capital refers to all the man-made things that are available to help in the production of goods and services, for example machinery, vehicles and buildings.

48
Q

What is enterprise?(economics)

A

Enterprise is the act of bringing together land, labour, capital and enterprise to set up a business to produce a product or supply a service at a profit. Foe example, an entrepreneur sets up a furniture manufacturing business and uses wood from the forests (land), the skills of the carpenter (labour) and the necessary equipment (capital) to design, manufacture and sell furniture.

49
Q

List each factor of production

A
  • Land gives rent.
  • Labour gives wages.
  • Capital earns interest.
  • Enterprise makes profit (hopefully!)

New junior cycle business complete not clickbait (15 decks)

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