Acounting terms Flashcards
Assets
What the business owns. The belongings of the business.
Three types of fixed assets
Land and property, equipment and vehicles.
Equipment
Computers, laptops, tablets, digital gadgets.
Vehicles
Bakkie, car and delivery van.
Fixed assets
Non-current assets. Business possessions that lasts more than 5 years.
Current Assets
Business positions that can be converted to cash immediately or within one year.
Two types of current assets
Bank and cash float.
Bank
Cash and funds.
Cash float
Change in the till.
Owners equity
Owners equity is the value of the business to the owner. It is the owners net worth in the business.
Two types of owners equity
Capital and drawings.
Capital
Owner gives funds to the business.
Drawings
Owner takes business funds for personal use.
Three types of operating income
Current income, rent income and donation income.
Current income
We render a service.
Rent income
We have a tenant. (We are the landlord)
Donation income
Receive as a gift. (Given to the business)
Different types of operating expenses
Material cost, trading license, wages, stationary, telephone, water, rates, electricity, repairs, packing material, insurance, refreshments, postage, salaries, motor expenses, rent expenses, advertising, consumables and donation expenses.
Material costs
Shampoo (hairdresser), washing powder (dry cleaners) and Oils/creams (health spa).
Trading license
Our business exists and trades legally.
Wages
Weekly employees, usually to laborer’s who are paid weekly in cash.
Stationery
Invoice books, office pens and office printing paper.
Telephone
Landline and phone calls (Also includes electronic communication mobiles).
Water
Government service, a basic need provided by the municipality.
Rates
Goverment charge on property (Payable to the city of Cape Town)
Electricity
Eskom service. A power and electricity supply.
Repairs
Fix broken windows, doors, shelves, etc.
Packing material
Carier bags at Pick n Pay.
Insurance
Saftey future precautions (On our property, vehicles, equipment, trading stock, etc.
Refreshments
Cofee, tea, milk, etc. (For staff and geusts)
Postage
Stamps, oarcels, etc. (Post office or Courier service)
Salaries
Monthly paid employees. (Usually to proffessionals, paid monthly, via an EFT)
Motor expenses
Energy, maintenace or repairs for our vehicles.
Rent expences
We are the tenant. (We have a landlord)
Advertising
When we promote our products or our business. (Flyers, billboards, pamphlets, on TV, newspaper, etc.
Consumables
Cleaning materials. (Used in kitchen, office, factory. Hady andy etc.)
Donation expenses
When we give away stock or cash. (To an organisation as charity)
Current liabilities
Funds we owe to outsiders, short term debts.
Non-current liabilities
Funds we owe to the bank in the form of a loan, long term.
