Double Entry Bookkeeping

Question 1

management accounts

Answer 1

Usually prepared monthly.
Financial/statistical info for managers.
Help them run day to day

Question 2

Financial accounts

Answer 2

Usually prepared annually.

For owners or shareholders, HMRC, banks, customers, suppliers, gov.

Question 3

Statement of profit or loss

Answer 3

Summary of business’s transactions (income and expense) for any given period

Question 4

Statement of financial position

Answer 4

Assets and liabilities of business at any given date - end of the period covered by statement of profit and loss

Question 5

Sales revenue

Answer 5

Income from trading

Question 6

Cost of sales

Answer 6

Cost of buying/producing

Question 7

Gross profit

Answer 7

Profit remaining after cost of sales deducted

Question 8

Sundry income

Answer 8

Not generated by trading (interest on savings…)

Question 9

Expenses

Answer 9

Day to day running costs

Question 10

Net profit or loss

Answer 10

Remaining after expenses deducted

Question 11

Asset

Answer 11

Owned/controlled/available to use by business

Question 12

Non-current asset

Answer 12

For long term use, not resold in trading (delivery van…)

Question 13

Current asset

Answer 13

Short term, used in near future, cash or something that can be converted to cash (stock…)

Question 14

Receivable

Answer 14

Customer

Question 15

Non-current liability

Answer 15

Owed by the business, to be paid in long term (after 12 months)

Question 16

Liability

Answer 16

Owed by business

Question 17

Payable

Answer 17

Supplier

Question 18

Capital expenditure

Answer 18

Purchase/improvement of non-current asset

Question 19

Revenue expenditure

Answer 19

Running costs

Question 20

Capital income

Answer 20

Sale of capital assets

Question 21

Revenue income

Answer 21

Sale of goods or services