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Flashcards in Cash and Treasury management Deck (17)
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1

What is the term used to describe the timing difference between a transaction being recorded and it's related cash flow?

Lagging

2

What is Mark up?

Mark up is added to cost of purchases to calculate selling price e.g.
Mark up of 20%
Selling price is Purchase price x 1.2

3

What is margin?

Sales price is 100% purchase cost is this less the margin, e.g.
20% margin means purchase cost as 80% of sales price

4

What is output and input tax in relation to VAT

Input = VAT charged on purchases
Output = VAT charged on sales

5

What can the affects of poor liquidity be?

Poor cash flow
Bankruptcy
Inability to pay suppliers
Unable to pay wages/salaries
Legal action arising from above

6

What is the 2010 bribery act?

Active bribery - offering abride
Passive bribery - Accepting a bribe
Bribery of a foreign official
Failing to prevent bribery

7

Money Laundering regulations?

Asses risk to business
Check identity of customers and beneficial owners
Monitor and report activities to NCA
Ensure controls are in place to prevent

8

What is the role of the Bank of england?

Banker to the government
Banker to other banks
Responsible for the mint
Influences interest rates

9

Treasury Bils

Issued by the Government - 91 day certificates issued for short term funding

10

Gilts

Issued by UK Government for long term funding

11

Local authority bills

Issued by local authority for short term funding

12

Certificates of deposit

Issued by banks short term

13

Billes of exchange

Issued by companies short term funding usually guaranteed by banks

14

Corporate bills and com

Issued by Companies debt certificates.

15

What is GDP and what does it mean?

Gross domestic product - total value of what a country produces.
If this falls over two successive quarters a country is considered to be in recession

16

What is the purpose of Quantitive easing?

To revive customer spending
Reducing interest rates resulting in higher disposable income levels
May result in the bank pumping money in to the economy.

17

How do high interest rates control the supply of money in the economy?

Discourage borrowing
Business investment may fall
Reduce home owners disposable income