Card Set Information

2013-05-24 09:57:33

Unit 2
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  1. Capital
    Money invested in a business or business project
  2. Bad debt
    Unpaid customer bills that are unlikely to ever be paid
  3. Creditors
    People owed money by the business eg suppliers
  4. Break even
    The point at which the number of total sales equals total costs. No profit or loss is made at the break even point
  5. Budgets
    Financial targets for the future covering revenue (income) and expenditure over a certain time period
  6. Calculated risk
    A decision made after careful consideration of the risks involved and the potential rewards
  7. Capacity
    The maximum output that a firm can produce with existing resources
  8. Budget holder
    A person who is accountable for seeing that a budget is kept to
  9. Delegated Budgets
    giving some control in the setting and spending of budgets to departments or individuals
  10. Monitoring Budget
    keeping a check in progress towards achieving targets during a budget period
  11. Variance
    The difference between a budgeted figure and the actual figure achieved
  12. Variance analysis
    is the comparison by an organisation of its actual performance with its expected budgeted performance over a certain time period
  13. Favorable variance
    This is a change from a budgeted figure that leads to higher then expected profits
  14. Adverse Variance
    This is a change from a budgeted figure that leads to lower than expected profits
  15. Over trading
    Expanding a business rapidly without obtaining all the necessary finance so that a cash flow shortage develops
  16. Profit margins
    The profit made as a proportion of sales revenue