AQA A Level Business Studies - BUSS2 Practice Questions and Answers

Budget An agreed plan, establishing, in numerical and financial terms, the policy to be pursued and the anticipated outcomes of that policy SMART How budgets must be: Specific Measurable Agreed Realistic Timed Variance Analysis The process by which the outcomes of budgets are examined and then compared with the budgeted figures Favourable Variance When costs are less than expected, or revenue is more than expected Adverse Variance When costs are higher than expected or revenue is lower than expected Bank Overdraft When the holder of a current account is allowed to withdraw more money than is in the account. There is an agreed maximum Short-term Loan Money leant from a bank to be repayed subject to pre-agreed terms and interest payments Factoring When a factoring compqany buys the right to collect money from credit sales of an organisation Sale of Assets When a business transfers ownership of an item that it owns to another business / individual, usually in return for cash Sale and Lease Back When an asset is sold to provide immediate cash flow and then leased back over a fixed period Working Capital Day-to-day finance used in a business, consisting of assets - liabilities Profit The money retained by a business after all costs have been deducted