Accounting concepts Flashcards
What are the three examples of a non-current asset?
- Land and buildings
- Vehicles
- Equipment
What is fixed deposit?
Money invested for a given period of time. Earns interest.
What is a notice deposit?
A notice deposit is money invested for a certain period of time, which needs to be noticed for 30\60\90 days before it will be paid back.
What is an asset?
Possessions of a business which have value and could be converted into cash.
What is a non-current asset (aka Fixed asset)
these are possessions purchased by the business with an aim of not using them for longer than a year.
What is a current asset?
A current asset refers to assets that can be converted into cash in the short term that is less than a year.
What are the five current assets?
- Trading stock
- Accounts receivable\ Debtors control
- Bank
- Petty cash
- Cash Float
What is Cash Float?
A current asset, Cash in the register used for change
What is Petty Cash?
Money used to buy low priced items, Usually less than R100.
What is a Non-Current Liability (aka long-term liability)
Long-term borrowings that will be paid back over a year.
What are the two non-current liabilities?
-Loan
- Mortgage bond
What is a loan?
Money borrowed to finance a business , interest is charged
What is mortgage bond?
Money borrowed to buy a house , office
What are the two current liabilities?
- Accounts payable\ creditors control
- Bank overdraft
What does accounts payable mean?
Money owed to another business. Should we need to credit something
What is bank overdraft?
A facility offered by the bank where you can use more money than you have.
What is capital?
The money given by the owner to start a business.
what is drawings?
The money the owner takes out of the business for personal use.
What is income?
Income is the earnings of the business, it will increase OE
What is expenses?
These are the cost of running a business. Decreases OE
What are examples of income?
- Rent income
- Current Income
-Sales
What is the bookkeeping system?
All transactions are recorded according to the double entry system.
What are the five different forms of ownership?
- Sole Trader
- Capital Contributions
- management
- liability
- continuity
- Taxation
What does continuity mean?
The lifespan of a business, if the owner dies the whole business will close down.
