1. The lowest level of interest is known as base rate. Customers will be charged an agreed number of points "over base".
2. (a) Regardless of profit being made by a business, it is essential there is sufficient working capital. This is used to pay wages, outstanding bills and Government levies.
3. (b) The balance sheet sets out the assets and liabilities of the business, and forms part of the annual accounts.
4. The private limited company, which has limited liability, may have only one owner and, unlike the Plc, is not quoted on the Stock Exchange. The other is a co-operative, where the workers run the company.
5. Costs which include such items as labour, metered water and raw materials are known as variable costs as use of these can fluctuate with the level of business.
6. (c) Cash-flow is money from sales and money to meet fixed and variable costs.
7. These terms show the amounts of cash or items that can be quickly turned into cash at the beginning and end of an accounting period.
8. (b) The margin may vary and can be negotiable. Normally, the smaller the risk to the lender, the lower the margin.
9. The word "term" in most documents of this nature refers to the length of time of any agreement. Buildings and motor cover normally have a one-year term.
10. Occupational pension plans may be fully paid by the employer or with contributions by both employer and employee, but linkage indicates the pension will be a proportion of the final salary.
11. These items are known as intangible or invisible assets.
12. Inflation, normally expressed as a percentage, is a calculation based on the increased (or decreased) amount it costs to buy a "basket of goods" from one period to the next.