Unit 4

Subdecks (2)

What is trade credit? 
Receiving goods now but paying later
What is accrued expenses?
Delayed payments on bills such as electricity, they can use the money on things that are more urgent
What is bank overdraft?
Some banks allow current account holders to withdraw more money than they actually have in their account. The amount is previously agreed on by the costumer and bank
What is Hire Purchase?
A type of installment plan for purchasing goods where the buyer pays in regular installments until the full price is paid. The item is only fully owned after the last installment is paid
What is leasing?
A business or person can enter an agreement with the owner of an asset that allows them to use the item for a term of 1 to 5 years in exchange for payment
What is a medium-term loan?
Money borrowed from a financial institution for a period of 1 to 5 years. To be paid in installments.
What is debt capital?
Long term source of finance provided by shareholders known as investors
What is debt capital?
Preferance shares and any long term loans. (ldebentures and mortgages also included)
What are Retained earnings?
Profits that are not paid out in dividends but rather re-invested in the business. Those money are usually used for explansion/ purchase of equipment etc
What is a grant?
Long term source of finance. Non-repayable source of finance offerenf by the Government or EU for the business