Chapter 12b: Family and Business Finance Flashcards
explain bank overdraft
short term bank loans giving a current account holder permission to pay out sums greater than they acctually have in their current account
explain trade credits
trade credit means recieving goods now from suppliers but paying for them later
explain accrued expenses
means delaying payemnt of bills and using the money to pay a more urgent expense
explain factoring debts
factoring debts means selling the right to collect payment from your debtors to a facotring firm
explain invoice discounting
when a business gets a loan from a bank to the value of some percentage of the amount owed to the business by its debtors
explain hire purchase
allows housheolds and businesses to buy an asset such as a car or equipment by paying in instalments over time
explain leasing
leasing means renting an item for an agreed no of years
explain term loan
a medium term loan from a financial institution repaid in monthyl instalements over a no. of years
explain mortgage
loans used to finance the purchase of a house or other property
explain debenture
a long term - fixed interest loan secured on a valuble asset such as presmises
explain sale and leasback
a contract to raise cash by selling a piece of property and simultaneuosly leasing it back on a long term lease
explain gov grant
a grant is essentially a free gift of money provided to a business to be used for a specific purpose
Define credit card
A small plastic card allowing businesses/people to buy goods on credit, which has a high interest rate
Describe debt
The total value of long term money owed by a business
Describe equity capitol
The total value of issued ordinary share capitol plus retained earnings
