BTEC business level 2 finance unit 2 Questions And Answers Rated A+ New Update Assured Satisfaction

Fixed Costs - Answer-Costs that do not change with output- they have to be paid regardless of how much a business produces Variable Costs - Answer-Costs that do change with output- these costs are directly linked to the product or service start up costs - Answer-Costs that a business has to pay when the business sets up. For examples, fixtures and fittings Operating costs - Answer-Costs that have to be paid for the day to day running of the business. For example, heat, light, rent etc... revenue - Answer-This is the money that comes into the business. It is also known as turnover or revenue Profit - Answer-This is the amount of money that the business earns AFTER paying for all of its costs Break even - Answer-Level of output where total revenue = total costs Margin of safety - Answer-This is the difference between your break-even point and the number of units you expect to sell cash flow forecast - Answer-This is a forecast the business makes for what it expects to have coming into the business and out of the business cost of sales - Answer-Costs linked directly with the production of a product Profit and loss account - Answer-A statement of income and expenditure- usually produced every 12 months Balance sheet - Answer-A statement outlining the financial position of the businessAssets - Answer-Things that the business owns Liabilities - Answer-Things that the business owes Sources of finance - Answer-Ways in which the business can raise money. These can be internal (from within the business) and external (outside of the business) Budgeting - Answer-The process of planning income and expenditure within a business