Bookkeeping systems Flashcards
Capital v Revenue: describe what is meant by Capital expenditure?
Money spent on non-current assets
Capital v Revenue: describe what is meant by Revenue expenditure?
Money spent on the day to day running costs of the business
Capital v Revenue: describe what is meant by Capital income?
Money received from non routine transactions, e.g: money paid into the business by the owner or the sale of non current assets
Capital v Revenue: describe what is meant by Revenue income?
Money received from day to day transactions such as sales
Give examples of Assets
Property, machinery, trade receivables, money in the bank
Give examples of liabilities
Bank overdraft, loan, trade payables
Give examples of income
Sales, rent received, bank interest received, discount received
Give examples of Expenses
Wages, rent, purchases
What are the two types of asset?
Current and non current
What is the dual effect?
For every debit there must be a credit
What does the Statement of Profit or Loss show?
The revenue income of a business less the revenue expenses resulting in a profit or a loss
What does Statement of Financial Position show?
The assets and liabilities of the business at a given point in time
What are assets?
Items owned by a business that are used within the business
Accounting equation
Capital = Assets - Liabilities
