Save
Busy. Please wait.
Log in with Clever
or
show password
Forgot Password?
Don't have an account?  Sign up 
Sign up using Clever
or
Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account. Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't Know
Remaining cards (0)
Know
0:00
edit
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

LC Bus Bus Finance

Unit 4 -Finance for Business

QuestionAnswer
Bank Overdraft Allows customers to withdraw more funds from their current account than they have in the account, up to a certain limit.
Trade Credit Involves buying goods on credit from creditors and paying for them later. E.g. stock
Accrued Expenses Refers to expenses a business has incurred but not yet paid for. E.g. telephone, electricity
Taxation Deducted from payrolls, PRSI and VAT collected on sales are paid for in arrears. The money is available for the business to use until the taxes are due for payment.
Factoring The sale of a firms debts to a financial institution.
Term Loan Negotiated with the bank and repaid in fixed instalment over an agreed period of time, usually 1-5 years.
Hire Purchase Means purchasing an asset by paying an initial deposit and then paying the balance together with interest monthly by regular instalments over an agreed period of time.
Leasing Renting fixed assets e.g. machinery, in return for the payment of an agreed monthly sum. Suitable for assets that become obsolete rapidly. The Hirer of the asset never becomes the owner. Rental payments can be offset against tax.
Equity Share capital is provided by the owner or shareholders of the business. It does not involve repayment of interest.
Debentures Provided by financial institutions. Interest payments are tax deductible Loans are usually secured on the assets of the business.
Venture Capital Also known as Seed Capital. This is finance for business start-ups in high risk ventures.
Grants Provided by government agencies. They do not have to be repaid. They have conditions attached that must be fulfilled.
What is Cash flow forecasts? You are not required to be able to prepare Cash flow forecasts (household budgets). You do need to be able to understand and interpret them. An estimate of the future flow of money in and out of the business
What is the importance of a Cash Flow Forecast? • To make sure that the household or business has enough cash. • To attract investors. • To borrow. • To plan financial requirements (fixed, irregular and discretionary). • To identify times of high expenditure and be ready for them.
How do you resolve net cash deficits: • Cut down expenditure • Earn extra revenue • Spread large expenditures over a longer period • Borrow • Get investors (business only)
List the short term finance for households? Short term: Overdraft; Accrued Expenses; Credit (including credit cards and charge cards).
List the medium term finance for households? Medium term: Hire Purchase; Leasing; Term Loan (bank and credit union); Savings.
List the long term finance for households? Long term: Mortgage (annuity and endowment); Savings.
List the short term finance for businesses? Short term: • Accrued expenses • Bank overdraft • Factoring Trade credit
List the medium term finance for businesses? Medium term: Hire Purchase; Leasing; Term Loan (bank and credit union); Savings.
List the long term finance for businesses? Gov grants; debentures; retained earnings; venture capital; sale and leaseback; equity.
Factors to take into account when choosing a source of finance: • Cost • Purpose / is it correct match? • Amount • Control • Collateral • Risk • Security Tax implications
What is the differences between households and businesses. • Profit? • Scale of borrowing, spending, cash flow, etc. • More time and expertise required for business. • Businesses are legally required to keep financial records. • Some sources of finance
Created by: MrFromholz
Popular Business sets

 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards