Basic Accounting Concepts Flashcards
Accrued expenses/expenses payable
Expenses that are still owing at the end of the financial year
Accrued income/income receivable
Income that is still owing to the business at the end of the financial year
Asset
Item of value owned by a person or business which enables a profit to be made.
Bad debts
Debts written off as the debtors are unlikely to settle their accounts
Cost of Sales
Cost of sales is the cost price of all goods that have been sold
Creditors
People/suppliers the business owes money to
Debtors
People who owe the business money for goods bought on credit
Depreciation
The amount by which fixed assets reduce in value over time due to use
Income received in advance/deferred income
Income that has already been received by a business but which is for the next financial year.
Liability
An amount owed by a person or business to another person or business.
Loss
When the expenses are more than the income.
Mark-Up
The percentage added to the cost price to calculate the selling price, i.e. the profit %
Owners’ Equity
The net worth (value) of the business at any given time. Or, assets less liabilities.
Prepaid Expenses
Expenses that have already been paid but which are for the next financial year.
Profit
When the income is more than the expenses.
