Business (9609) AS Level - Unit 5 Flashcards

is any item owned by a business that can generate an income for the enterprise.

is the money invested into a business either by its owners or by organisations such as banks.

are assets that a business expects to hold for one year or more. Examples include property and vehicles.

are needed for a limited period of time, normally less than one year.

are those that are needed over a longer period of time, usually over a year.

exists when a business’ debts (or liabilities) exceed the assets available to pay them.

refers to the money owed by a business to individuals, suppliers, banks and others.

occurs when an individual, a sole trader or a partnership is judged unable to pay its debts by a court of law.

is the dissolution of a company by selling its assets to settle its liabilities.

is a process available to a company to protect itself while it attempts to pay its debts and to escape insolvency.

is the cash a business has for its day-to-day spending. Current Assets - Current Liabilities.

are items owned by a business that can be readily turned into cash. Examples include cash, money owed by customers (trade receivables) and inventories (stocks).

is the amount of money owed by a business to its suppliers for goods and services that have been received but which have not been paid for.

is the amount owed by a business’ customers for products that have been supplied but for which payment has not yet been made.

refers to the purchase of items such as fuel and raw materials that will be used up within a short space of time.

is the spending by a business on noncurrent assets such as premises, production equipment and vehicles.

is a financial statement that records the assets (possessions) and liabilities (debts) of a business on a particular day at the end of an accounting period. It was previously called a balance sheet.

is a financial statement showing a business’ sales revenue over a trading period and all the relevant costs incurred to generate that revenue.

is one that exists within the business.

is an injection of funds into the business from individuals, other businesses or financial institutions.

is a period of time offered by suppliers of goods and services before payment is to be made.

is an amount of money provided to a business for a stated purpose in return for a payment in the form of interest charges.

is funds (in the form of a mix of share and loan capital) that is advanced to businesses which are thought to be relatively high-risk.

takes place when banks provide up to 80 per cent of the value of a business’ debts immediately to provide an instant inflow of cash.

is the provision of financial services for poor and low-income clients.

is a source of finance that entails collecting relatively small amounts of money from a large number of supporters (the ‘crowd’).

is a sum of money given to entrepreneurs or businesses for a specific purpose.

is a business’ most liquid asset – it is notes and coins as well as funds held in the business’ bank accounts.

is a document that records a business’ anticipated inflows and outflows of cash over some future period, frequently one year.

are expenses that a business has to pay to engage in its trading activities.

is the income a business receives from selling its goods or services.

can be related to the production of a particular product and vary directly with the level of output.

are overheads that cannot be allocated to the production of a particular product and relate to the business as a whole.

allocates all the costs of production for the whole business. Therefore, these costs are absorbed into each output unit. This is also known as absorption costing.

can be defined as the difference between sales revenue and variable costs of production.

is the level of production or output at which a business’ sales or total revenue is exactly equal to its total costs of production.

are the amount by which revenue exceeds total costs, although there are several different measures of profit.

calculates the cost of a product solely on the basis of variable costs, thus avoiding the need to allocate fixed costs.

are the total cost of production divided by the number of units produced.

is the extra cost resulting from producing one additional unit of output. In most situations the marginal cost of an additional unit of a product is the variable cost of its production.

is the process of establishing the price of a product by calculating its cost of production and then adding an amount which is profit.

is based on the notion that any price set that is higher than the variable cost of producing a product is making a payment towards fixed costs.

occur when a business’ managers have to decide whether or not to accept unusual customer orders.

measures the quantity by which a firm’s current level of sales exceeds the level of output necessary to break even.

is a process where budget figures are minor changes from the preceding period’s budgeted or actual data.

is a budget that is designed to change along with the sales volume or production levels.

is responsible for the use and management of a particular budget.

exist when budgets are automatically set at zero and budget holders have to argue their case to receive any funds.