Business Cycle Test Flashcards
Sole trader
Only person that owns the business
Capital
Money put in by owner to start business
Owners equity
Owners contribution and how much the business is worth.
Examples of fixed assets
Land buildings
Vehicles
Equipment
Current assets examples
Money in bank Cash float Petty cash Trading stock Money owed to debtors
Profit
Amount of money left after all expenses paid
Source document
The first document the transaction is recorded on
Transaction
Business deal
Name the 8 terms used in accounts eg. Wages
- Wages
- salaries
- stationary
- Rent expenses
- advertising
- telephone account
- water electricity
- material
What accounting term is used for money/cash
Bank
Two types of liability and eg.
Non current Mortgage bond Car finance Loans Current Creditors Bank overdraft Tax
What is bank overdraft
When the bank allows you to spend more than in your bank account
What is the difference between an asset and an expense
Asset:makes the business money
Expense:costs it money
What is the accounting equation
A=O+L
What is a service business
A business that provides services for money.
