Financial terminology

Question 1

Enterprises keep track of their revenue and costs in order to prepare …

Answer 1

Enterprises keep track of their revenue and costs in order to prepare financial statements

Question 2

Enterprises keep track of their revenue and costs in order to prepare financial statements that they can …

Answer 2

Enterprises keep track of their revenue and costs in order to prepare financial statements that they can analyse to understand how well they are performing

Question 3

Financial terminology:
What is turnover?

Answer 3

Turnover is the total revenue received by an enterprise in a given financial period

Question 4

Financial terminology:
What are cost of sales?

Answer 4

Cost of sales are the cost of producing goods

Question 5

Financial terminology:
What is gross profit?

Answer 5

Gross profit is turnover minus cost of sales

Question 6

Financial terminology:
What are expenses?

Answer 6

Expenses are the indirect costs of the enterprise

Question 7

Financial terminology:
What is net profit?

Answer 7

Net profit is gross profit minus expenses

Question 8

Financial terminology:
What is retained profit?

Answer 8

Retained profit is the net profit used to help the business grow

Question 9

Financial terminology:
What are current liabilities and long-term liabilities?

Answer 9

Current liabilities and long-term liabilities are what the enterprise owes (including money), which must be paid back within a certain time period

Question 10

Financial terminology:
What are fixed assets and current assets?

Answer 10

Fixed assets and current assets are things that the enterprise owns

Question 11

Financial terminology:
What are debtors?

Answer 11

Debtors are individuals or enterprises that owe money to the enterprise

Question 12

Financial terminology:
What are creditors?

Answer 12

Creditors are individuals or enterprises, such as suppliers, that the enterprise owes money to

Question 13

Financial terminology:
What are net current assets?

Answer 13

Net current assets are the value of current assets minus current liabilities

Question 14

Financial terminology:
What is capital?

Answer 14

Capital is the money used to set up and then grow the business

Question 15

What is another word for debtors (they mean the same thing)?

Answer 15

Another word for debtors is trade receivables

Question 16

What is another word for creditors (they mean the same thing)?

Answer 16

Another word for creditors is trade payables

Question 17

What is another word for fixed assets (they mean the same thing)?

Answer 17

Another word for fixed assets is non-current assets

Question 18

What is another word for long-term liabilities (they mean the same thing)?

Answer 18

Another word for long-term liabilities is non-current liabilities

Question 19

Financial terminology often appearing in financial statements:
In a statement of comprehensive income, what are the terminology that often appear?

Answer 19

In a statement of comprehensive income, the terminology that often appear are:
1) Turnover
2) Cost of sales
3) Gross profit
4) Expenses
5) Net profit
6) Retained profit

Question 20

Financial terminology often appearing in financial statements:
In a statement of financial position, what are the terminology that often appear?

Answer 20

In a statement of financial position, the terminology that often appear are:
1) Fixed assets
2) Current assets
3) Owner’s capital
4) Current liabilities
5) Long-term liabilities (non-current liabilities)
6) Debtors (trade receivables)
7) Creditors (trade payables)