Business Btec Unit 3 - business finance Questions and Answers(A+ Solution guide)

Savings - Answer-placing money in a secure place so that it grows in value ad can be used in the future investment - Answer-speculative commitment to a business venture in the hope that it generate a financial reward in the future. expenditure - Answer-the amount of money you need to cover all your expenses/ outgoings e.g. your mortgage and bills Shareholders - Answer-someone who invested in a company in return for equality i.e. share of the business (HMRC) Her Majesty's Revenue and Customs - Answer-is a non-ministerial department of the UK government responsible for the collection of tax Fraud - Answer-Is a criminal deception intended to result in financial or personal gain Profit - Answer-Is a financial gain, the difference between the amount earned and the amount spent Loss - Answer-Is the amount of money lost in a business or organization Gross profit - Answer-a company's total revenue minus the total revenue. Sales Revenue - Answer-Is the income from sales from goods and services, minus the cost associated with things returned and undelivered merchandise. Net profit - Answer-Is the actual profit after the working expenses not included in the calculation of gross profit have been paidTrade payables - Answer-Is the amount billed to the company by the suppliers for the goods delivered Trade receivables - Answer-Is the amounts billed by a business to its customers when it's delivered goods or service to them Capital income - Answer-the money invested by the owners or other investors that is used to set up a business or buy additional equipment. It tends to be used to buy things that will stay in the business for the medium-to-long period of time. Fixed assets - Answer-Items of value owned by a business that are really likely to stay in business for more than one year. For example machinery. Also known as non-current assets. Revenue income - Answer-the money that comes into the business from performing its day-to-day function selling goods and services goods or providing a service. The nature of the revenue income depends on the activities that the business does to bring in money. expenditure - Answer-money spent by the business Capital expenditure - Answer-Purchase of assets