3.4 - Final accounts

Question 1

contains financial info about organization’s assets, liabilities, capital invested. a snapshot of the firm’s financial situation

Answer 1

balance sheet

Question 2

value of asset shown on a balance sheet

Answer 2

book value

Question 3

direct costs of producing or purchasing stock

Answer 3

cost of goods sold (COGS), cost of sales (COS)

Question 4

suppliers who allow a business to purchase goods/services on trade credit

Answer 4

creditors

Question 5

cash/liquid asset that is likely to be turned into cash within 12 months of balance sheet date

Answer 5

current asset

Question 6

debts that must be settled within one year of balance sheet date

Answer 6

current liabilities

Question 7

cash, debtors, stocks

Answer 7

current assets

Question 8

bank overdrafts, trade creditors, short term-loans

Answer 8

current liabilities

Question 9

fall in value of noncurrent assets caused by asset being used or obsolescence (outdated)

Answer 9

depreciation

Question 10

indirect/fixed costs of production, like administration charges, management salaries, insurance premiums, rent

Answer 10

expenses

Question 11

published annual financial statements that all limited liability companies need to report. the balance sheet and P&L account

Answer 11

final accounts

Question 12

intangible asset which exists when value of a firm exceeds the book value (net assets)

Answer 12

goodwill

Question 13

different between sales revenue and direct costs in making/purchasing products

Answer 13

gross profit

Question 14

purchase cost of a particular fixed asset - used to calculate depreciation

Answer 14

historic cost

Question 15

noncurrent assets that don’t exist in physical form but are of monetary value, like goodwill, copyright, trademakrs, brandnames

Answer 15

intangible assets

Question 16

value of all assets minus liabilities. should match the equity of the business in balance sheet

Answer 16

net assets

Question 17

items owned by a business not intended for sale within the next 12 months, but used to generate revenue

Answer 17

noncurrent assets

Question 18

property, plant, equipment

Answer 18

noncurrent assets

Question 19

debts owed by a business, expected to take longer than a year to repay

Answer 19

noncurrent liabilities

Question 20

surplus a business earns after all expenses have been paid for from the gross profit

Answer 20

profit

Question 21

amount of profit after interest, tax, and dividends have been paid

Answer 21

retained profit

Question 22

amount of money raised through the sale of shares. value raised when shares were first sold and not the current market value

Answer 22

share capital

Question 23

legal act of creative accounting by manipulating financial data to make the results appear more appealing

Answer 23

window dressing