FA1 Section 1 Flashcards
Sales
Exchanging a good or service for money.
Purchases
Goods and services that are bought by the business for resale to customers.
Payments
Transfer of money to someone else (for example, for purchases, purchases on credit, or for wages to employees)
Receipts
Getting money from someone else (for example, from cash sales, a loan from the bank, capital received from owners, or sales on credit).
Petty Cash
Paying for low value items with a small fund of cash
Payroll
Wages and salaries paid to employees, and any payroll taxes.
Set of Accounts, Financial Statements, Financial Accounts
A formal statement which includes the current financial state of the business as well as how it has performed during a period of time (usually a year).
Transactions
A transaction is an event which results in the exchange of money for an asset.
Wages
Money that is paid to employees for their work. Usually paid every week or month. Wages are also known as staff pay.
Salaries
A salary is a fixed payment (often monthly) for employment, irrespective of actual hours worked. It tends to apply to managers, and administrative employees who are not in production departments.
Books
Accounting Records of the Business
Business
An organization that aims to make a profit for its owner. It can do this through buying or making and selling goods or services. A business can be small, medium or large.
Profit
The difference between a business’s income and expenses.
Income
Income comes mainly from the sales of goods or services by a business.
Expenses
Expenses are the amounts that a business pays in order to run the business ( including buying the items that it will sell, as well as the other costs of running the business, like electricity for the lights).
