3. Angel Investors
Angel investors are individuals or groups of investors who seek to invest in businesses that
have been set up using the owner’s own funds, as well as money from family and friends.
Banks
A bank is a financial institution licensed to receive deposits and make loans. Money can be
stored in banks for future purposes or for starting up a business. Banks also offer loans where
a business owner can borrow money to start up his/her business
Borrowing from friends and family
Entrepreneurs can Obtain their funds from individuals who have a personal relationship with
them
4. Crowd funding
Crowd funding refers to the contribution of lots of small sums of
capital by a large number of people to fund a venture.
Customers
A customer is an individual or business that purchases another
company's goods or services. Customers contribute to a
business's revenue by purchasing goods or services. The income
generated from these sales can be used to cover operating
expenses, repay loans, and contribute to the growth of the
business
Credit cards
A credit card is issued by a financial institution, that allows the
cardholder to borrow funds to make purchases. Entrepreneurs
can use credit cards to access funds quickly, providing immediate
capital for startup expenses or making small purchases.
5. Government grants
A government grant is a financial award given by the central, local or municipal government
which is not usually expected to be repaid
Loans
A busniess owner can borrow from a bank or other form of financial institution. The bank
provides the loan and the borrower repays the capital overtime with interest
Equity refers to the value of the owner’s contribution to a business. Equity is
represented by the value of the share capital of a company, or the owner’s contribution
of capital in a smaller business.
Equity
6. A supplier is a person or a company who provides goods or services to
another person or entity
Suppliers
Venture capital are funds provided by venture capitalist to help fund the
business projects of small businesses
Venture Capital
Personal Savings
Some entreprenurs use their personal savings to finance an enterprise. This is easier
than pitching for loans and investment, but is dependent on the owner’s savings.
8. Balance sheet
A financial statement that shows a
company's financial position at a
specific point in time, summarizing its
assets, liabilities, and equity.
Balance sheet equation
Balance sheet equation: Assets =
Liabilities + Equity, representing the
relationship between a company's
resources, obligations, and ownership.
Bankrupt
A legal status of an individual or
business entity unable to repay
outstanding debts; often leads to the
liquidation of assets to satisfy creditors.
Bookkeeping
The systematic recording, organizing,
and storing of financial transactions in
a business, forming the basis for
accounting.
9. Cash Book
A record of a company's cash
transactions, including both inflows and
outflows.
Cash Flow
The movement of money into and out of
a business, indicating its liquidity and
ability to meet short-term obligations
Cash Flow Forecast
An estimate of a company's future cash
inflows and outflows, providing insights
into expected financial liquidity.
Cash Flow Problem
A situation where a business faces
challenges in maintaining adequate cash
reserves to meet its obligations.
10. A method of bookkeeping that records each financial transaction
with corresponding debits and credits to maintain the accounting
equation.
Double Entry Bookkeeping
Expenses
Expenses are Costs incurred by a business in its normal
operations to generate revenue.
Gross Profit
The difference between revenue and the cost of goods sold,
representing the profit before deducting other expenses
11. A situation where a business struggles to convert assets into cash quickly,
potentially hindering its ability to meet short-term obligations.
Liquidity Problem
The negative difference between total revenue and total expenses,
resulting in a deficit.
Loss
Journals
Books of original entry where financial transactions are first recorded before
being transferred to ledgers.
12. Petty Cash Book
A record of small, routine expenditures maintained
separately to simplify the tracking of minor expenses.
The positive difference between total revenue and total
expenses, indicating financial gain.
Profits
Purchases journal
A purchase journal is a specialised accounting journal and it
is also a prime entry book/daybook/main entry book which is
used in an accounting system to keep track of the orders of
items placed using accounts payable
13. Sales Return Journal
A sales return journal is used to record goods returned by credit customers.
It is prepared from credit notes issued to customers.
A simplified method of bookkeeping that records each transaction only once
Single entry bookkeeping
A sales journal is a manual accounting system used to store the
summary of invoices issued to customers
Sales journal
Receipts
Documents acknowledging the acceptance of payment, often issued by a
seller to a buyer.
