Definitions Flashcards
1
Q
What are Provisions?
A
When a business sets aside some money to cover future costs
2
Q
What is equity?
A
Equity represents the net funds invested into a business by its owners
3
Q
What are prepayments?
A
The settlement of debt or installment loan before its official due date
4
Q
Straight line method
A
(Cost - residual value)/ years of use
5
Q
Gross profit
A
Selling price of your product minus the cost of producing it
6
Q
Accounts receivable
A
Goods that have been delivered but not paid for
7
Q
Accounts payable
A
Amounts due to vendors for a good or service that has not been paid for yet
8
Q
Trade receivables
A
The amount customers owe a business for the good provided
9
Q
What are Trade payables?
A
Money a business owes for goods and services when buying them on credit
