Edexcel AS/A Level Business - Theme 2 Exam Questions and Answers

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