Aim C Flashcards
Accounting
Involves the recording of financial transactions
Record
Keeping businesses records up to date is important, if this is not done they could get in trouble with HMRC, as tax payments may then be wrong
Management
A manager is responsible for monitoring and controlling of the resources , they need to make informed decisions on staff, materials, stock and money
Compliance
Financial reporting is governed by laws and regulations to ensure they give an accurate representation of the business , businesses must comply to protect them against fraud allegations.
Measure
To see if the business makes a profit or a loss, gross profit is the money made after the cost of producing , net profit is the number after all of the total expenses have been subtracted.
International accounting standards
Practices are designed to make it simpler for businesses around the world to compare financial reporting and data.
Control
The flow of money in and out of the business, trade receivables and trade payables
Loan
Sum of money borrowed from a bank or financial institution and paid back with interest in installments
Mortgage
A large sum of money borrowed usually against a property, for 25 years plus
Shares
The amount of a business a person owns measured in percentage, they have voting rights and are paid in a dividend.
Owners capital
The money the owner or owners have put into a business, usually from personal savings
Debentures
Long term business debt not secured by any collateral , certificate that states how much the investor gave, the interest rate and the schedule of payments
Sales
Money coming in from the sale of goods or services
Rent received
Money paid out for the use of a property or charging others for the use of your property
Commission received
Someone sells a product in the businesses behalf in return for a percentage on the sales they make
Interest received
Money received for saving or lending money
Discount received
When a business is given a percentage off a business or in return for buying in bulk
Expenditure
This is the money going out of a business
Capital expenditure
The cash spent on investments in a business
Depreciation
When the value of an asset falls in value over time cost- residual value / life expectancy
