Accounting

31 cards·by JZ_R5

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Accounting Equation

assets less liabilities= equity

Accounts payable

amounts owed by the business for items bought on credit

Accounts receivable

amounts owed to the business for items sold on credit

Asset

a future economic benefit presently controlled by an entity as a result of a past transaction

Current Asset

those that are expected to be turned into cash in the coming year

Non-current Asset

those that are expected to be turned into cash in more than one year

Balance Sheet

statement used to calculate the equity/net profit of a business

Company

1 or more owners; limited liabilities; continuous existence

Continuous Existence

the ownership of the business can be transferred to another person

Credit Purchase

buy a good or service now and paying later

Expenses

payment made for ongoing costs in the operation of the business

Group one expenses

those relating to the provision of the good/service itself

Administration expenses

those relating to the daily running of the business

Financial expenses

those relating to the funds of the business

Income

what a person earns

Income statement

statement used to calculate the net profit of a business

Liability

a future economic sacrifice an entity is presently obliged to make as a result of a past transaction

Limited Liability

if the business fails the owner's personal assets may not be used to repay the debts of the business

Current liability

those items owing that are expected to be repaid in the coming year

Non-current liability

those items owing that are expected to be repaid in more than one year

Net loss

expenses are greater than revenue

Net profit

revenue less expenses

Net worth

a person's assets less their liabilities

Non-continuous existence

the ownership of the business cannot be transferred to another person

Other revenue

earnings of the business not relating to the core work of the business

Equity

the amount the business owes the owner

Partnership

2-25 owners; unlimited liabilities; non continuous existence

Revenue

the earnings of a firm

Sole Trader

1 owner; unlimited liabilities; non continuous existence

Unlimited liability

if the business fails the owner's personal assets may be used to repay the debts of the business

Accounting

the process and communication of financial information to enable economic decisions to be made