5.1 Business Accounts: Intro, TB and Accounting Flashcards

1
Q

What do the accounts show

A

Value of company as a going concern

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2
Q

What does top half of BS show reader

A

NAV

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3
Q

Fixed assets are what

A

Non-current, providing lasting benefit to the company

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4
Q

What does TB break down into

A

P+L and BS

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5
Q

Why is BS different from TB

A

It is a snapshot on a given date, not for entire period

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6
Q

Current assets are what

A

Something that can be quickly sold

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7
Q

What is a long-term liability for ALCIE

A

Longer than a year

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8
Q

Why are drawings capital for ALCIE

A

Transactions between business and owner

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9
Q

Year-end adjustments are for what

A

BS

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10
Q

What do year-end adjustments do

A

Correct imbalance for pre-payment or accrual

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11
Q

What does BS record from ALCIE

A

ALC

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12
Q

What is included in financial statements

A

P+L account and BS

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13
Q

How do you work out NAV

A

Fixed assets + net current assets - long-term liability

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14
Q

Why is it strange for Sts to have capital for P+L

A

Business does not have separate legal personality

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15
Q

What is double-entry book-keeping

A

Every transaction has a dual effect on accounts

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16
Q

Classification of drawings for ALCIE

A

Capital

17
Q

Exception to ONLY income and expenses into P+L

A

Stock (which are asset)

18
Q

What is capital for ALCIE

A

Injection from owner/investor, and profits retained

19
Q

ALCIE stands for

A

Asset, liability, capital, income and expense

20
Q

ALCIE classification is for what

A

P+L

21
Q

What does bottom half of BS show reader

A

Capital invested

22
Q

What goes into P+L from ALCIE

A

ONLY income and expenses

23
Q

Asset is split into what for ALCIE

A

Fixed and current

24
Q

What makes up TB

A

Transactions + ledgers

25
Q

What does P+L shows

A

Summarises fortunes of business over period

26
Q

Liabilities for ALCIE are split into what

A

Current and long-term