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Money withdrawn from the business by its owner for their personal use.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