Accounts and Regulation. Flashcards
How do you calculate net worth of business?
Assets - Liabilities = Net Worth of Business
What is employment of capital?
Where the money is now.
What is capital employed?
Where the money originally came from.
What are current liabilities?
Liabilities repayable in 12 months or less from date of balance sheet.
If an expense is upcoming but has not been paid out yet what is this known as?
An accrual (in the balance sheet); and
An expense (in the profit and loss account).
What is closing stock?
Stock left at end of accounting period.
Added as additional item in current assets section of balance sheet.
How are bad/doubtful debts shown in accounts?
Doubtful debtors entered in expenses action of profit and loss account as provision for doubtful debtors.
Also subtracted from debtors figure on the balance sheet.
How is depreciation shown in accounts?
As an expense on profit and loss account.
How is disposal of an asset recorded in accounts?
Shown on profit and loss (as either a profit or loss) depending if sold for more or less than book value.
Are dividends contained in profit and loss account?
No, but once paid the cash figure will be reduced.
