A LEVEL EDEXCEL BUSINESS PAPER 2
Capital - (ANSWER)The money provided by the owners in a business
Capital expenditure - (ANSWER)Spending on business resources that can be used repeatedly
over a period of time
Internal finance - (ANSWER)Money generated by the business or its current owners
Retained profit - (ANSWER)Profit after tax that is 'ploughed back' into the business
Revenue expenditure - (ANSWER)Spending on business resources that have already been
consumed or will be very shortly
Sale and leaseback - (ANSWER)The practice of selling assets, such as property or machinery,
and leasing them back from the buyer
Authorised share capital - (ANSWER)The maximum amount that can be legally raised
Bank overdraft - (ANSWER)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 - (ANSWER)The profit made from selling a share for more than it was bought
Crowd funding - (ANSWER)Where a large number of individuals invest in a business or project
on the internet, avoiding the use of a bank
Debenture - (ANSWER)A long-term loan to a business
, Equities - (ANSWER)Another name for an ordinary share
External finance - (ANSWER)Money raised from outside the business
Issued share capital - (ANSWER)Amount of current share capital arising from the sale of shares
Lease - (ANSWER)A contract to acquire the use of resources such as property or equipment
Peer-to-peer lending (P2PL) - (ANSWER)Where individuals lend to other individuals without
prior knowledge of them, on the internet
Permanent capital - (ANSWER)Share capital that is never repaid by the company
Secured loans - (ANSWER)A loan where the lender requires security, such as property, to
provide protection in case the borrower defaults
Share capital - (ANSWER)Money introduced into the business through the sale of shares
Unsecured loans - (ANSWER)Where the lender has no protection if the borrower fails to repay
the money owed
Venture capitalism - (ANSWER)Providers of funds for small or medium-sized companies that
may be considered too risky for other investors
Collateral - (ANSWER)An asset that might be sold to pay a lender when a loan cannot be repaid
Incorporated business - (ANSWER)A business model in which the business and the owner(s)
have separate legal identities
Capital - (ANSWER)The money provided by the owners in a business
Capital expenditure - (ANSWER)Spending on business resources that can be used repeatedly
over a period of time
Internal finance - (ANSWER)Money generated by the business or its current owners
Retained profit - (ANSWER)Profit after tax that is 'ploughed back' into the business
Revenue expenditure - (ANSWER)Spending on business resources that have already been
consumed or will be very shortly
Sale and leaseback - (ANSWER)The practice of selling assets, such as property or machinery,
and leasing them back from the buyer
Authorised share capital - (ANSWER)The maximum amount that can be legally raised
Bank overdraft - (ANSWER)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 - (ANSWER)The profit made from selling a share for more than it was bought
Crowd funding - (ANSWER)Where a large number of individuals invest in a business or project
on the internet, avoiding the use of a bank
Debenture - (ANSWER)A long-term loan to a business
, Equities - (ANSWER)Another name for an ordinary share
External finance - (ANSWER)Money raised from outside the business
Issued share capital - (ANSWER)Amount of current share capital arising from the sale of shares
Lease - (ANSWER)A contract to acquire the use of resources such as property or equipment
Peer-to-peer lending (P2PL) - (ANSWER)Where individuals lend to other individuals without
prior knowledge of them, on the internet
Permanent capital - (ANSWER)Share capital that is never repaid by the company
Secured loans - (ANSWER)A loan where the lender requires security, such as property, to
provide protection in case the borrower defaults
Share capital - (ANSWER)Money introduced into the business through the sale of shares
Unsecured loans - (ANSWER)Where the lender has no protection if the borrower fails to repay
the money owed
Venture capitalism - (ANSWER)Providers of funds for small or medium-sized companies that
may be considered too risky for other investors
Collateral - (ANSWER)An asset that might be sold to pay a lender when a loan cannot be repaid
Incorporated business - (ANSWER)A business model in which the business and the owner(s)
have separate legal identities
