3.4 - Final accounts Flashcards
contains financial info about organization’s assets, liabilities, capital invested. a snapshot of the firm’s financial situation
balance sheet
value of asset shown on a balance sheet
book value
direct costs of producing or purchasing stock
cost of goods sold (COGS), cost of sales (COS)
suppliers who allow a business to purchase goods/services on trade credit
creditors
cash/liquid asset that is likely to be turned into cash within 12 months of balance sheet date
current asset
debts that must be settled within one year of balance sheet date
current liabilities
cash, debtors, stocks
current assets
bank overdrafts, trade creditors, short term-loans
current liabilities
fall in value of noncurrent assets caused by asset being used or obsolescence (outdated)
depreciation
indirect/fixed costs of production, like administration charges, management salaries, insurance premiums, rent
expenses
published annual financial statements that all limited liability companies need to report. the balance sheet and P&L account
final accounts
intangible asset which exists when value of a firm exceeds the book value (net assets)
goodwill
different between sales revenue and direct costs in making/purchasing products
gross profit
purchase cost of a particular fixed asset - used to calculate depreciation
historic cost
noncurrent assets that don’t exist in physical form but are of monetary value, like goodwill, copyright, trademakrs, brandnames
intangible assets
value of all assets minus liabilities. should match the equity of the business in balance sheet
net assets
items owned by a business not intended for sale within the next 12 months, but used to generate revenue
noncurrent assets
property, plant, equipment
noncurrent assets
debts owed by a business, expected to take longer than a year to repay
noncurrent liabilities
surplus a business earns after all expenses have been paid for from the gross profit
profit
amount of profit after interest, tax, and dividends have been paid
retained profit
amount of money raised through the sale of shares. value raised when shares were first sold and not the current market value
share capital
legal act of creative accounting by manipulating financial data to make the results appear more appealing
window dressing
