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CTEC Unit 1 Flashcards | StudBud
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CTEC Unit 1
CTEC Unit 1
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CTEC
Flashcards
40 cards
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Practice quiz
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Questions
40
Answers
1
What is the equation to work out total costs?
Fixed Costs / Variable Costs
Fixed Costs - Variable Costs
Fixed Costs X Variable Costs
Fixed Costs + Variable Costs
2
Examples of cash inflows include:
Sales of products, Leasing, Grants
Sales of products, Leasing, Advertising
Leasing, Grants, Rent
Grants, Leasing, Wages
3
Businesses use break even analysis .....
because it's a legal requirement
to increase profit
to see how much profit they will make
to assess business propositions
4
A cash flow forecast states how much profit a business is making......
False
True
5
What is at the top of a profit and loss account?
Revenue
Cost of sales
Sales Turnover
Income from sales
6
Examples of cash outflows include ...
Payment to suppliers, Rent, Sale of an asset
Rent, Salaries, Power
, Payment to suppliers, Rent, Revenue
Power, Rent, Grants
7
Which type of costs change depending on output?
Operating
Start-up
Variable
Fixed
8
Net Assets = Capital Employed
False
True
9
What are the two types of expenditure?
Capital and Cost
Cost and Revenue
Sales and Cost
Capital and Revenue
10
An example of an asset would be .....
Bank Loan
Cash
Vehicles
Creditor
11
How often are start-up costs usually paid?
twice
monthly
never
once
12
What are operating costs also known as?
Fixed Costs
Variable costs
Start-up costs
Running costs
13
The costs a business has to pay out when setting up are knows as?
Start-up costs
Fixed costs
Variable costs
Operating costs
14
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
15
It is a legal requirement to produce a Balance Sheet for
ALL
businesses
False
True
16
............. 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
17
If Burt sells 50 cans of CocaCola @ 60p per can, how much revenue has he received?
£35.00
£25.00
£40.00
£30.00
18
Put simply, Revenue is the money .......
coming 'in' to the business
a business loss
a business has to pay
'leaving' the business
19
Gross Profit - ? = Net Profit
Fixed assets
Expenses
Cost of sales
Loss
20
What is the equation for revenue?
R = fixed + variable costs
R = Q x P
R = P x Q
Costs - Revenue
21
Revenue - Cost of Sales = ?
Gross profit
Margin of safety
Expenses
Net profit
22
In terms of expenditure, which of the following is incorrect?
Expenditure can be split into 2 types
Businesses have to spend money to succeed
Expenditure is all of the money a business spends
Having lots of expenditure will help to make more profit
23
Something a business owns, with an expected lifespan longer than 12 months is a ........
Current liability
Fixed asset
Long term liability
Current asset
24
A business pays their shareholders in the form of ......
Sale of assets
Dividends
Gold
Free products
25
What does the term liquidity mean?
It's a measure of how much capital a shareholder invested
How many liabilities a business has
The ability to turn assets into cash
How much a business spends on utilities
26
Break even: what would happen if the volume of sales is increased?
The margin of safety decreases
Break even point is lower
The margin of safety increases
Break even point is higher
27
Which term is being defined: 'earned by a business by selling either goods or services'
Revenue
Turnover
Costs
Break Even
28
Break even: what would happen if total costs decreases?
break even point is lower
margin of safety increases
break even point is higher
margin of safety decreases
29
Using a restaurant as an example, which of the following are examples of variable costs?
Food, New cooker
Phone bill, Cutlery
Washing up liquid, napkins, drinks
Food, Phone bill
30
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
31
Budgetary control is ...
Workers set their own budgets
When vactual results are compared to budgets
Businesses compare budgets to those from other businesses
Managers set budgets
32
Which of the following is the correct definition for fixed costs?
cost's that don't change with output
remain fixed
stay the same
cost's that change depending on output
33
Something a business owes is known as a .......
liability
asset
capital
net liabilities
34
Businesses use budgets ...
to review projects
to forecast sales revenue
to set targets
to assess performance
35
Which of the following do you not need to know in order to complete a break even analysis?
selling price
variable costs
start-up costs
fixed costs
36
From top to bottom, which is the correct order for a cash flow forecast?
Bank Balance, Inflows, Outflows
Inflows, Outflows, Net Flows, Bank Balance
Outflows, Inflows, Bank Balance
Revenue, Cost of sales, Expenses
37
When a business is owed money by somebody, they are known as a ..........
Creditor
Debtor
38
What is a profit and loss account also known as?
Statement of financial position
Income statement
Balance sheet
Cash flow forecast
39
Which of the following is not a reason to create a cash flow forecast?
Businesses can plan for the future (expand or shrink)
Businesses can decide if they need to invest more or less
To predict levels of profit
Banks can see how money is flowing in the business.
40
Net Current Assets are also known as ........
Working Capital
Grants
Current Liabilities
Capital
