Accounting Terminology Flashcards
asset
something the business owns eg.buildings, cars or stock
fixed asset
something the business owns for more than one year. eg.buildings
current asset
something the business owns for less than a year. CHANGEABLE.
debtor
someone who owes the business money.
we sell to debtors.
creditor
Someone the business owes money to eg. supplier. We buy from creditors.
liability
something the business owes eg.loan or a creditor.
capital
the money the owner of the business invests into the business. This means that the business owes this money to the owner and therefore a liability.
drawings
money or stock taken out of the business by the owner.
profit
sales minus/less expenses
carriage
the cost of delivering goods to its customer or having goods brought to the business.
returns
goods/stock sent back to the business by its customers or good/stock the business sends back to it’s suppliers
depreciation
a fixed assets loss of value through wear and tear.
net book value
book value of the fixed assets after depreciation. how much its worth today.
prepayment
an expense paid in advance (part of next years or months)
accrual or dues
an expense that has not been paid (some of this years)
