Business accounting

Question 1

Accounts

Answer 1

Financial records of a firm’s transactions

Question 2

Accountants

Answer 2

People that make accounts in companies

Question 3

Final accounts

Answer 3

Produced at the end of the financial year and give details of the profit/loss of the business

Question 4

Trading account

Answer 4

SHows how the gross profit of a business is calculated

Question 5

Gross profit

Answer 5

Sales revenue - Cost of goods

Question 6

Net profit

Answer 6

Gross profit - Expenses and tax

Question 7

Retained profit

Answer 7

Net profit reinvested back into a company after deducting dividends and tax

Question 8

Assets

Answer 8

Items of value owned by a business

Question 9

Liabilities

Answer 9

Items owned by a company which are a financial burden

Question 10

Shareholder’s Funds

Answer 10

Total assets - total liabilities

Question 11

Working capital

Answer 11

CA - CL

Question 12

Net assets

Answer 12

FA + Working capital

Question 13

Capital employed

Answer 13

Shareholder’s funds + LTL

Question 14

Liquidity

Answer 14

Ability of a business to pay back short-term debts by selling assets for cash