Edexcel AS/A Level Business - Theme 2 Questions With Correct Answers Graded to Pass

Capital - The money provided by the owners in a business Capital expenditure - Spending on business resources that can be used repeatedly over a period of time Internal finance - Money generated by the business or its current owners Retained profit - Profit after tax that is 'ploughed back' into the business Revenue expenditure - Spending on business resources that have already been consumed or will be very shortly Sale and leaseback - The practice of selling assets, such as property or machinery, and leasing them back from the buyer Authorised share capital - The maximum amount that can be legally raised Bank overdraft - An agreement between a business and a bank that means a business can spend more money that it has in its account (going 'overdrawn'). The overdraft limit is agreed and interest is only charged when the business goes overdrawn Capital gain - The profit made from selling a share for more than it was bought Crowd funding - Where a large number of individuals invest in a business or project on the internet, avoiding the use of a bank Debenture - A long-term loan to a business Equities - Another name for an ordinary share External finance - Money raised from outside the business Issued share capital - Amount of current share capital arising from the sale of shares Lease - A contract to acquire the use of resources such as property or equipment Peer-to-peer lending (P2PL) - Where individuals lend to other individuals without prior knowledge of them, on the internet Permanent capital - Share capital that is never repaid by the company Secured loans - A loan where the lender requires security, such as property, to provide protection in case the borrower defaults