Keywords Flashcards
Accrued Overhead
Overhead which won’t be paid until next financial period.
Add to TB figure
Prepaid Overhead
Amount paid in a previous financial period.
Add to TB figure.
Trade Discount
Given to Cash or Trade Credit Customers.
Given to reward loyalty.
Cash Discount
Given to Trade Credit customers to encourage them to pay quicker.
Good for cash flow and liquidity.
Profit
Revenue - Cost of Sales
Cash
Notes, coins and instant access bank accounts
Reserves
Undistributed profits represented by assets in the Balance Sheet.
Not cash.
Capital Reserves
Share Premium
Revaluation Reserve
Revenue reserves
Retained Earnings
General Reserve
Capital Transactions
Affect Balance Sheet
Revenue Transactions
Affect the Income Statement
Direct Debit
Instruction to Bank to pay a variable amount on a regular date when the supplier requests it, until told to stop.
Standing order
Instruction to Bank to pay a fixed amount on a regular date automatically to another person/business until told to stop.
Credit Transfer
Electronic payment or receipt of money through banking system without cash or cheques.
Unpresented cheques
Cheque recorded in the cash book but haven’t taken to the Bank.
Outstanding Lodgement
Amount paid into the Bank and recorded in Cash Book but isn’t showing on Bank statement.
Dishonoured cheque
Cheque returned by the Bank as their is insufficient money in their account.
Debenture
Long term loan from private investor.
Percentage of interest paid yearly.
Original investment will be paid back at the end.
Temporary Capital
Bonus shares
Given to existing shareholders in the ratio of their current share, to restructure equity section.
Use up capital reserves first.
Rights issue
Shares sold at a discount to current shareholders in the ratio of current shares.
Fully subscribed if all existing holders want them.
Done to raise capital.
Amount raised added to cash.
Limited liability
Most investors can lose is the amount they invested.
Less risky.
Easier to raise capital.
Personal assets are safe.
NRV
Amount inventory can be sold for.
Deduct repair costs from NRV.
Then compare to cost and use lowest value.
Ordinary Shares
Ownership
Voting Rights
Permanent Capital
Variable Dividends
Preference Shares
Ownership
Permanent Capital
Fixed dividends
