Business rev

• Functions of money


  • Legal tender
  • Pay for goods
• Financial Ombudsman Service (FOS)


  Support in a complaint against a financial organisation
• Advantages to the consumer of using the Financial Ombudsman Service (FOS)


  • Free to use
  • Accessible to anyone
• Pre-paid cards


  • Fixed amount of money, therefore limited spending
  • Have an expiry date, therefore if money left after expire date it can be lost
• Consumers often compare products and services
• Comparison when buying products and services

  1. Firstly consider price

  2. Consider quality

  3. Consider time efficiency

  4. Consider convenience
• Consumers are influenced by price when buying products and services
• Consumers are influenced by time efficiency when buying products and services
• Financial Services Compensation Scheme (FSCS)


  Covers business conducted by firms authorised by UK financial regulators
• Types of financial business protected by the Financial Services Compensation Scheme (FSCS)

  • Banks
  • Credit unions
• Pawnbrokers


  • You can still hold ownership of the asset while getting finance
  • Doesn't have an impact on credit rating
• Clearing House Automated Payment System (CHAPS)

  • No limit on how much money can be transferred
  • It's irreversible or, so if you make a mistake it can't be fixed
• Price comparison websites


  • Help you find the most financially beneficial product
  • They are free so there are no extra costs
• Expenditure


  • To avoid getting into debt
  • To control and avoid overspending
• Debit cards allow consumers to purchase goods even though they don't have sufficient funds in their account
• Debit cards can be pre-arranged so consumers will have them available when needed
• Types of capital income


  • Loan
  • Mortgages
• Cash flow forecast


  Used by businesses to show to banks or investors to secure finance
• Amortisation


  Reduces profits as amortisation increases the business's expenses
• Calculating the selling price of a drone


  1. 30,000 / 40 = 750

  2. (30,000 - 10,000) / 40 = 500
• Margin of safety


  60 - 40 - 20 = 0
• Price comparison websites can have outdated data and may be influenced by paid promotions
• Components of a cash flow forecast

  • Cash sales
  • Credit sales
  • Samples of tax payments
  • Trade income
• Debentures have a fixed interest rate, so the business doesn't need to worry about increased interest
• Advantages to the consumer of visiting a bank branch in person

  • Gain more tailored and in-depth help since its face to face
  • Some problems may be easier to solve in person-to-person
• Advantages to the consumer of visiting a bank branch in person

  • Reduce the consumers stress from having to find out how to solve the problem online, in branch allows more opportunities to save the problem in different ways
• Debenture


  • Fixed repayments
  • Interest is charged
• Discount allowed being offered to customers

  • Overall profits will decrease for year
  • Will have to sell more units to break-even
  • Increases expenses
• Inflows which could be recorded in a cash flow forecast


  • Cash sales
  • Credit sales
• Intangible capital expenditure


  • Trademarks
  • Logos