definitions random buszziness Flashcards
What is an income statement?
It is a financial statement that shows the company’s income and expenditures.
How is an income statement used?
It outlines a company’s revenue, expenses, gains and losses during a set accounting period.
Definition of sales revenue?
it is the income received by a company from its sales of goods or the provision of service.
Definition of cost of sales?
the costs involved in directly producing the goods or service that you actually sell.
Definition of gross profit?
it is the selling price of the product minus the cost of producing it.
Definition of expenses?
Any cost a business sustains to generate revenue.
Definition of net profit?
Profit after all costs that have been detected from revenue.
Definition of gross profit margin?
The percentage of revenue left over after you subtract the company’s direct costs.
Definition of net profit margin?
It is the percentage of total income that the company gets to keep after all expenses and taxes are paid.
What is a balance sheet/statement of financial position?
It is a report of the company assets, liabilities and shareholder equity at a specific point in time.
How is a balance sheet/statement of financial position used?
This is to give interested parties and idea of the company financial position and displays what the company owns and owes.
Definition of current assets?
They are resources that the business owns and are expected to use or sell within a year.
Definition of non-current assets?
They are the company’s long-term investments and cannot be converted to cash easily within a year.
Definition of current liabilities?
They are debts of a company that must be payed within a normal operating cycle usually less than 12 month.
Definition of non-current liability?
The debts a business owns but is not due to pay for at least 12 months.
