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BTEC Business - Unit 2 Finance - LBO Flashcards | StudBud
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BTEC Business - Unit 2 Finance - LBO
BTEC Business - Unit 2 Finance - LBO
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BTEC Business - Unit 2 - Finance in Business (exam unit)
Flashcards
40 cards
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Practice quiz
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Questions
40
Answers
1
Which of the following is not a golden rule of Cash flow?
A business is is bankrupt when it has a negative flow
Money is only recorded when cash changes hands
Closing balance of 1 month is the opening bal of next month
It tells us NOTHING about profit
2
Businesses use budgets ...
to set targets
to review projects
to forecast sales revenue
to assess performance
3
Net Assets = Capital Employed
True
False
4
A business pays their shareholders in the form of ......
Free products
Dividends
Sale of assets
Gold
5
Something a business owes is known as a .......
asset
liability
capital
net liabilities
6
Gross Profit - ? = Net Profit
Fixed assets
Cost of sales
Loss
Expenses
7
Break even: what would happen if total costs decreases?
margin of safety increases
break even point is higher
margin of safety decreases
break even point is lower
8
A cash flow forecast states how much profit a business is making......
False
True
9
Break even: what would happen if the volume of sales is increased?
The margin of safety increases
Break even point is lower
The margin of safety decreases
Break even point is higher
10
Which term is being defined: 'earned by a business by selling either goods or services'
Turnover
Revenue
Costs
Break Even
11
Examples of cash inflows include:
Grants, Leasing, Wages
Sales of products, Leasing, Grants
Leasing, Grants, Rent
Sales of products, Leasing, Advertising
12
How often are start-up costs usually paid?
monthly
twice
once
never
13
What are the two types of expenditure?
Capital and Cost
Cost and Revenue
Capital and Revenue
Sales and Cost
14
What is at the top of a profit and loss account?
Sales Turnover
Cost of sales
Income from sales
Revenue
15
Businesses use break even analysis .....
to increase profit
because it's a legal requirement
to see how much profit they will make
to assess business propositions
16
Net Current Assets are also known as ........
Grants
Working Capital
Current Liabilities
Capital
17
When a business is owed money by somebody, they are known as a ..........
Creditor
Debtor
18
Put simply, Revenue is the money .......
'leaving' the business
a business has to pay
a business loss
coming 'in' to the business
19
The costs a business has to pay out when setting up are knows as?
Operating costs
Start-up costs
Fixed costs
Variable costs
20
Examples of cash outflows include ...
, Payment to suppliers, Rent, Revenue
Payment to suppliers, Rent, Sale of an asset
Power, Rent, Grants
Rent, Salaries, Power
21
Using a restaurant as an example, which of the following are examples of variable costs?
Food, New cooker
Washing up liquid, napkins, drinks
Phone bill, Cutlery
Food, Phone bill
22
A profit and loss account is usually produced to show business activity over ......
The last month
The last year
The last week
Since the first day of trading
23
Which of the following is not a reason to create a cash flow forecast?
To predict levels of profit
Businesses can plan for the future (expand or shrink)
Banks can see how money is flowing in the business.
Businesses can decide if they need to invest more or less
24
What does the term liquidity mean?
How many liabilities a business has
How much a business spends on utilities
The ability to turn assets into cash
It's a measure of how much capital a shareholder invested
25
Revenue - Cost of Sales = ?
Margin of safety
Net profit
Gross profit
Expenses
26
It is a legal requirement to produce a Balance Sheet for
ALL
businesses
False
True
27
............. is a picture of a company’s financial situation at a moment in time – a snap shot
Balance Sheet
Break even analysis
Cash flow forecast
Profit and loss account
28
An example of an asset would be .....
Bank Loan
Vehicles
Creditor
Cash
29
If Burt sells 50 cans of CocaCola @ 60p per can, how much revenue has he received?
£35.00
£40.00
£30.00
£25.00
30
In terms of expenditure, which of the following is incorrect?
Expenditure can be split into 2 types
Expenditure is all of the money a business spends
Having lots of expenditure will help to make more profit
Businesses have to spend money to succeed
31
Something a business owns, with an expected lifespan longer than 12 months is a ........
Current asset
Current liability
Long term liability
Fixed asset
32
From top to bottom, which is the correct order for a cash flow forecast?
Bank Balance, Inflows, Outflows
Revenue, Cost of sales, Expenses
Outflows, Inflows, Bank Balance
Inflows, Outflows, Net Flows, Bank Balance
33
What is the equation for revenue?
R = P x Q
R = Q x P
Costs - Revenue
R = fixed + variable costs
34
Budgetary control is ...
Workers set their own budgets
Managers set budgets
When vactual results are compared to budgets
Businesses compare budgets to those from other businesses
35
What is the equation to work out total costs?
Fixed Costs + Variable Costs
Fixed Costs X Variable Costs
Fixed Costs / Variable Costs
Fixed Costs - Variable Costs
36
Which of the following is the correct definition for fixed costs?
cost's that change depending on output
stay the same
cost's that don't change with output
remain fixed
37
Which type of costs change depending on output?
Variable
Operating
Fixed
Start-up
38
What is a profit and loss account also known as?
Balance sheet
Cash flow forecast
Income statement
Statement of financial position
39
What are operating costs also known as?
Start-up costs
Fixed Costs
Variable costs
Running costs
40
Which of the following do you not need to know in order to complete a break even analysis?
start-up costs
fixed costs
selling price
variable costs
