To store money securely while earning interest

To borrow money for short-term needs

To pay monthly bills only

To trade shares automatically

High interest rates

Risk of entering a debt spiral

Interest-free borrowing for 12 months

Guaranteed approval with no fees

It affects the ability to borrow and the interest rates offered

It determines eligibility for health insurance

It increases wages automatically

It replaces the need for identification documents

Pay bills on time

Reduce outstanding debts

Open many new credit cards at once

Ignore payment reminders

Contents insurance covers personal belongings; buildings insurance covers the structure of the property

Contents insurance covers only outdoor structures; buildings insurance covers jewelry

Both cover only accidental damage to vehicles

Buildings insurance covers tenants’ clothing; contents insurance covers walls and roofs

To manage spending

To avoid debt

To increase taxes owed

To remove the need for saving

Annual Percentage Rate showing the total cost of borrowing including interest and fees

Average Payment Rate that shows how quickly loans are repaid

Adjusted Prime Rate that banks offer to best customers

Annual Penalty Rate applied only for missed payments

Faster transactions

Reduces the need for cash

Increases withdrawal limits at ATMs

Eliminates all fraud risk

To resolve disputes between consumers and financial firms

To set interest rates for commercial banks

To insure deposits held at banks

To issue credit cards to consumers

It reduces purchasing power and affects interest rates

It guarantees higher wages for all workers

It lowers prices of all goods permanently

It has no effect on saving or borrowing

Income tax

National Insurance contributions

Private pension contributions (optional)

Charitable donations

How easily assets can be converted into cash

The profitability of selling products

The level of long-term debt held

The market share of a business

Rent

Salaries

Raw materials used per unit

Sales commission per sale

Costs that change with output, such as raw materials

Costs that never change regardless of production

The one-time cost of purchasing equipment

The cost of borrowing funds for expansion

Selling price per unit minus variable cost per unit

Variable cost per unit minus fixed cost per unit

Total revenue minus total assets

Fixed cost per unit minus selling price per unit

Helps set sales targets

Assists in pricing decisions

Guarantees profit regardless of sales

Eliminates all fixed costs

To predict inflows and outflows and manage liquidity

To calculate corporation tax only

To replace financial statements for investors

To set employee wages for the year

Relies on estimates

Cannot predict unexpected events

Ensures exact future cash balances

Removes the need for budgeting

Allocating the cost of an asset over its useful life to reflect wear and tear

Increasing the value of assets annually to match inflation

Writing off the full cost of an asset in the purchase year only

Recording only cash expenses related to maintenance

Straight-line charges equal amounts each year; reducing balance applies a percentage to remaining value

Straight-line uses a percentage of the book value each year; reducing balance uses equal amounts

Both methods yield identical annual charges

Reducing balance is only used for land and buildings

Gross profit margin

Net profit margin

Current ratio

Inventory turnover

How quickly stock is sold and replaced

The cash collected from credit customers

The number of suppliers a business has

The percentage of defective goods returned

Retained profit

Sale of assets

Bank loan

Trade credit

Lower upfront cost

No ownership of asset

Immediate ownership increases equity

Large down payment is required