3.4 Final Accounts Flashcards
Profit & Loss Account
A summary of a business’ financial performance over a given time period. Showing the revenue, cost and profut over a period of time. Also known as income statement.
Profit
The difference between revenue and cost. Profit = revenue - total costs
Revenue
The amount earned from the sale of products. Revenue = price x quantity sold
Costs of goods sold
The cost of purchasing the inputs needed to produce the product
Expenses
Costs of running the business not directly related to production
Interest
Amount paiand to a bank in return for borrowing money
Net profit before Tax
Net profit before interest and tax
Tax
Percentage of profit that is paid to the government
Net profit after interst and tax
Net profit before tax
What is in an P & L Account?
Revenue, cost of goods sold, gross profit, expenses, net profit before interest and tax, interest, net profit before tax, net profit after interst and tax
Dividend
Given to owners and it is usually a certain amount per share
Retained Profit
Put back into the business
Fixed Assets
Long term assets
Balance Sheet
Records the net worth of a business at one moment in time. Total assets minus total Liabilities
Assets
Items of monetary value owned by the company
