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20 Cards in this Set

  • Front
  • Back
Asset
Items of value that are owned by the business and can be given a monetary value. They can be tangible or intangible.
Liability
Items of debt that are owed by the business to outside third parties and will need to be paid back at some stage.
Current assets
Assets that can be converted into cash within 12 months e.g. cash, stock and accounts receivable.
Non-current assets
Assets that the business will be expected to maintain for a period longer than 12 months e.g. cars, goodwill, fixtures and fittings, land and buildings.
Accounts payable (creditors)
The total of all monies owed by a company to a supplier.
Owner's equity
This is the money or capital put into the business by its owners. It represents the owners' financial interest in the business or net worth of the business.
Accounts receivable (debtors)
Money which is owed to the business by people or firms commonly called debtors.
Goodwill
The good name or reputation of a business. Often measured through the repeat customers the business.
Drawings
Money withdrawn from the business by its owner for their personal use.
Non-current liabilities
Debts that need to be repaid over a period longer than 12 months
Current liabilities
Debts that need to be repaid within a 12 month period.
Overdraft
An agreement with the bank to enable the business to overdraw on its bank account (i.e. take out more funds than available)
Net Profit
The final profit earned after all the other income has been added and all expenses have been subtracted. It is equal to Gross Profit less Expenses.
COGS
The value of inventory sold to earn the sales.
Gross Profit
It is a measure of the mark up added onto the cost of stock. It is equal to the sales revenue less COGS.
Inventory/Stock
The finished product that is available to be sold.
Mortgage
A form of borrowing undertaken by the firm. It is a legal document that pledges property as cover or insurance to repay the debt.
Cash
Refers to the cash on the business premises and cash held in bank account that the business has immediate access to.
Balance sheet
A report that shows the stability of the business at a point in time. It includes the sources (liabilities and owner's equity) and the uses (assets) of funds for a business.
Sales Revenue
Also called income, any money coming into the business as a result of selling goods or services.