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BTEC Business - Unit 2 Finance Flashcards | StudBud
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BTEC Business - Unit 2 Finance
BTEC Business - Unit 2 Finance
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BTEC Business - Unit 2 - Finance in Business (exam unit)
Flashcards
26 cards
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Practice quiz
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Questions
26
Answers
1
In terms of expenditure, which of the following is incorrect?
Expenditure can be split into 2 types
Having lots of expenditure will help to make more profit
Businesses have to spend money to succeed
Expenditure is all of the money a business spends
2
Businesses use budgets ...
to forecast sales revenue
to assess performance
to review projects
to set targets
3
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
4
Which type of costs change depending on output?
Operating
Variable
Start-up
Fixed
5
Which of the following do you not need to know in order to complete a break even analysis?
start-up costs
fixed costs
variable costs
selling price
6
What is the equation for revenue?
R = Q x P
R = P x Q
R = fixed + variable costs
Costs - Revenue
7
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
8
Which of the following is not a reason to create a cash flow forecast?
Businesses can decide if they need to invest more or less
Banks can see how money is flowing in the business.
Businesses can plan for the future (expand or shrink)
To predict levels of profit
9
Using a restaurant as an example, which of the following are examples of variable costs?
Food, Phone bill
Food, New cooker
Phone bill, Cutlery
Washing up liquid, napkins, drinks
10
Break even: what would happen if total costs decreases?
margin of safety increases
margin of safety decreases
break even point is lower
break even point is higher
11
Put simply, Revenue is the money .......
coming 'in' to the business
a business loss
a business has to pay
'leaving' the business
12
A cash flow forecast states how much profit a business is making......
False
True
13
Examples of cash outflows include ...
Power, Rent, Grants
Rent, Salaries, Power
, Payment to suppliers, Rent, Revenue
Payment to suppliers, Rent, Sale of an asset
14
What are operating costs also known as?
Running costs
Start-up costs
Fixed Costs
Variable costs
15
The costs a business has to pay out when setting up are knows as?
Fixed costs
Start-up costs
Operating costs
Variable costs
16
Examples of cash inflows include:
Leasing, Grants, Rent
Sales of products, Leasing, Advertising
Sales of products, Leasing, Grants
Grants, Leasing, Wages
17
From top to bottom, which is the correct order for a cash flow forecast?
Bank Balance, Inflows, Outflows
Outflows, Inflows, Bank Balance
Revenue, Cost of sales, Expenses
Inflows, Outflows, Net Flows, Bank Balance
18
Budgetary control is ...
Workers set their own budgets
Managers set budgets
Businesses compare budgets to those from other businesses
When vactual results are compared to budgets
19
Revenue - Cost of Sales = ?
Margin of safety
Gross profit
Net profit
Expenses
20
Which term is being defined: 'earned by a business by selling either goods or services'
Revenue
Break Even
Costs
Turnover
21
Break even: what would happen if the volume of sales is increased?
Break even point is lower
The margin of safety decreases
The margin of safety increases
Break even point is higher
22
If Burt sells 50 cans of CocaCola @ 60p per can, how much revenue has he received?
£35.00
£25.00
£40.00
£30.00
23
What is the equation to work out total costs?
Fixed Costs / Variable Costs
Fixed Costs - Variable Costs
Fixed Costs + Variable Costs
Fixed Costs X Variable Costs
24
What are the two types of expenditure?
Sales and Cost
Capital and Cost
Cost and Revenue
Capital and Revenue
25
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
26
How often are start-up costs usually paid?
once
twice
monthly
never
