Definitions Flashcards
What is the definition of Current Assets
Value of the assets owned by a company that ca be converted to cash through liquidation, use, or sales within one year
What is the definition of Historic Value
The cost of an asset when it was first purchased
What is the definition of Expected Life
How long the asset is expected to be used within the business
What is the definition of Residual Value
The value of the asset at the end of its expected life. How much the asset is worth once it is disposed bond
What is the definition of Gross Profit
Is the amount of money left over after the cost of goods sold is deducted form sales revenue
What is the definition of Inventory
It is the term for the goods available for sale and raw materials used to produce goods available for sale
What is the definition of Expenses
An expense is the cost of operations that a company incurs to generate revenue
What is the definition of Depreciation
It is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy
What is the definition of Net Profit
It is the measurements of a companies profit once operating costs, taxes, interest, and depreciation have all be subtracted from its total revenues
What is the definition of Sales Revenue
It is the money a company earns from selling its gods and services to customers
What is the definition of Costs of Goods Sold
The term COGS incudes all of the costs and expenses directly related to the production of goods
What is the definition of Purpose of Accounting
To provide the information that is needed for sound decision making
