Understanding key financial terms:

• What does the term "Revenue" refer to in business finance?

  Total income from sales
• What is the definition of "Profit" in business finance?

  Revenue minus costs
• What are "Fixed Costs" in business finance?

  Costs that do not change with output
• Provide an example of a "Fixed Cost" in business finance.

  Rent
• What are "Expenses" in business finance?

  Costs to generate revenue
• Cash flow ensures the financial stability of a business.

  True
• Match each financial term with its significance:

  Revenue ↔️ Indicates overall demand

  Costs ↔️ Impact profitability

  Profit ↔️ Measures business success

  Cash Flow ↔️ Ensures financial stability
• If a business has revenue of £100,000 and total costs of £70,000, what is its profit?

  £30,000
• What are the three main types of assets owned by a business?

  Current, fixed, and intangible
• What are liabilities in a business?

  Obligations to others
• Profit measures the success of a business.


  True
• What are expenses in a business?

  Costs to generate revenue
• Expenses increase a business's profitability.

  False
• What are examples of fixed assets?

  Land, buildings, equipment
• Short-term liabilities are due within one year
• What is an example of a long-term liability?

  Mortgage
• Capital enables a business to acquire assets and support growth.


  True
• Revenue indicates the overall demand for a business's offerings.


  True
• Match the financial term with its significance:

  Revenue ↔️ Indicates overall demand

  Profit ↔️ Measures business success

  Cash Flow ↔️ Ensures short-term obligations
• Understanding fixed and variable costs is crucial for managing profitability.

  True
• What is the formula for calculating simple "Profit"?

  Revenue - Total Costs
• Unlike assets, expenses decrease a business's profitability.


  True
• Profit is calculated as revenue minus costs
• Arrange the following financial terms in order of their significance in calculating profit:

  1️⃣ Revenue

  2️⃣ Costs

  3️⃣ Profit
• Fixed costs are expenses that do not change with the level of output
• What formula is used to calculate simple profit?

  Profit = Revenue - Total Costs
• Match each expense type with an example:

  Salaries and Wages ↔️ Payment to employees

  Rent ↔️ Cost of leasing space

  Utilities ↔️ Electricity, water bills

  Raw Materials ↔️ Cost of production materials
• Fixed assets are long-term physical assets used in operations.


  True
• What is the significance of revenue in financial performance?

  Indicates overall demand
• Profit measures the success of a business by showing whether it is making more than it spends
• What do expenses represent in a business context?

  Costs to generate revenue
• Current assets are those that can be converted to cash within one year
• What are liabilities in business finance?

  Debts owed to others
• Match the type of capital with its example:

  Equity Capital ↔️ Shares, retained earnings

  Debt Capital ↔️ Loans, bonds
• What does profit measure in a business context?

  Business success
• What is the formula for calculating simple profit?

  Profit = Revenue - Total Costs
• If revenue is £100,000 and total costs are £70,000, the profit is £30,000
• Expenses for promoting products or services are called marketing expenses.
• What are assets in business terms?

  Valuable resources owned
• What are liabilities in business terms?

  Debts owed to others