Accounting Terms

Question 1

Depreciation

Answer 1

Expense which decreases an asset, profit and equity

Question 2

Unlimited Liability

Answer 2

The owner or club memebers can be forced to sell off personal assets to pay the entity’s debts

Question 3

Revenue Expenditure

Answer 3

Expenses that are shown in the income statement. Includes maintaing and repairing assets but not purchasing them

Question 4

Capital Expenditure

Answer 4

The purchase of non current assets that will be shown in the stement of financial position.

Question 5

Capital Expenditure

Answer 5

One off spending that will benefit the entity for more than one period

Question 6

Depreciation

Answer 6

Systematic allocation of the value of an asset over its life

Question 7

Sole Proprietor

Answer 7

A business with one owner aiming to make a profit

Question 8

Incorporated Organisation

Answer 8

A club with 15 or more members, limited liability, legal status and no aim of profit

Question 9

Unincorporated Organisation

Answer 9

A club with 2 or more members, unlimited liability, no legal status and no aim of profit

Question 10

Revenue Expenditure

Answer 10

Tends to be recurrent in nature (happens again and again) and reduces profit