BTEC Unit 2 Finance Exam With 100% Correct Answers 2024

BTEC Unit 2 Finance Exam With 100% Correct Answers 2024Start up Cost - correct answer-The expenses a new business must pay before it can begin to produce and sell goods Operating Cost - correct answer-Those costs involved in the ordinary day-to-day running of the business. Direct Cost - correct answer-Costs that are directly linked to the production, such as raw materials or labour. Indirect Cost - correct answer-Costs which cannot be directly related to a particular product. Often known as overheads. Fixed Cost - correct answer-Costs that do not vary with the quantity of output produced such as rent or loan repayments. Variable Cost - correct answer-Costs that vary according to the amount produced such as packaging or raw materials. Total Costs - correct answer-The addition of fixed and variable costs together to give the total costs of production. Price - correct answer-The amount of money charged to customers for buying a product or service. Revenue - correct answer-The number of items sold multiplied by the selling price. Profit - correct answer-When the revenues of a business are greater than the costs. Loss - correct answer-When the costs of a business are greater than the revenues. Breakeven - correct answer-When the costs and revenues of a business are exactly equal and the business is neither making a profit or a loss. Margin of Safety - correct answer-The difference between the breakeven point and the actual level of output of the business. Budget - correct answer-A forecast of expected income or expenditure. Variance - correct answer-The difference between actual and budgeted income or expenditure Adverse Variance - correct answer-Is when the difference between actual expenditure is higher than budgeted expenditure. Or when the difference between actual income is lower than budgeted income. Favourable Variance - correct answer-Is when the difference between actual expenditure is lower than budgeted expenditure. Or when the difference between actual income is higher than budgeted income. Budgeting - correct answer-The process of setting a budget. Budgetary Control - correct answer-The checking of performance to make sure that targets are met and monitoring any variances. Cash Flow Forecast - correct answer-A prediction of how money will flow in and out of a business over a future period. Cash Inflows - correct answer-The money received by a business. Cash outflow - correct answer-The money spent by a business. Expenditure - correct answer-Another word for spending. Net Cash Flow - correct answer-The difference between total inflow and total outflow. Also called the difference between total receipts and total payments. Opening balance - correct answer-The money in the bank at the start of the period of a cash flow forecast. Closing balance - correct answer-The money in the bank at the end of the period of a cash flow forecast. Cost of Sales - correct answer-An item on the Income Statement that is the value of the purchases of stock. Gross Profit - correct answer-The difference between sales revenue and cost of sales. Net Profit - correct answer-The difference between Gross Profit and total expenses. Fixed Asset - correct answer-The items that are owned by a business and used to help them trade and are expected to last for more than one year. Current Assets - correct answer-The assets which are cash or easily converted to cash such as stock and trade receivables. Trade Receivables - correct answer-Sometimes known as debtors these are customers who have bought goods but have not yet paid for them.