Accounting Terms

Question 1

Incoportated Organisation

Answer 1

A club with
- 15 or more members
- Limited Liability
- Legal status
- No aim of profit

Question 2

Depreciation

Answer 2

Systemic allocation on the value of an asset over its life

Question 3

Sole Proprietor

Answer 3

A business with one owner aiming to make a profit

Question 4

Revenue Expenditure

Answer 4

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

Question 5

Unicorported Organisation

Answer 5

A club with
- 2 or more members
- Unlimited liability
- No legal status
- No aim of profit

Question 6

Capital Expenditure

Answer 6

“On off” spending that will benefit the entity for more than one period

Question 7

Unlimited Liability

Answer 7

The owner or club members CAN be forced to sell off personal assets to pay the entity’s debts.

Question 8

Capital Expenditure

Answer 8

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

Question 9

Revenue Expenditure

Answer 9

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

Question 10

Deprecation

Answer 10

Expenses which decreases an assets, profit & equality