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Accounting > Preparing Financial Accounts > Flashcards

Preparing Financial Accounts Flashcards

1
Q

What is piece rates?

A

Employees are paid for each unit they produce

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2
Q

What are time based systems?

A

When your wage is calculated by how many hours you work and the rate of each hour.

Wage=hours x rate per hour

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3
Q

Do you add or subtract receivables front he income statement?

A

Subtract

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4
Q

Do you add or subtract payables from the income statement?

A

Add

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5
Q

What type of storage will depend upon the materials?

A

Weight
Bulky
Risks- theft
- floods

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6
Q

In choosing the location for stores, the factors which have to be taken into consideration are?

A

Type of production- is the stock big
Nature of material- flammable?
Transport time- how long it takes to get to a store/ factory/ storage

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7
Q

What does LIFO mean?

A

Last in first out

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8
Q

What does FIFO mean?

A

First in first out

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9
Q

What is the role of financial accounts?

A

Their duties include…

  • collecting information from business document
  • check the accuracy
  • record appropriate transactions
  • analyse and then present the financial outcome
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10
Q

What are the advantages and disadvantages of being a sole trader?

A

Advantages

  • keep all the profit
  • get to decide hours to work

Disadvantages

  • long working hours
  • no one to share the responsibility with
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11
Q

What is a sole trader?

A

A sole trader is a person who sets up and owns their own business. They may decide to employ others people but they are the only owners.

Examples…. Hairdressers
Plumber
Electricians

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12
Q

What are the sources of finance in a sole trader?

A

Capital- money from owner

Loan- borrowed from bank/family that has interest and must be paid back

Overdraft- more money than you have, but need to pay it back

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13
Q

Is income credit or debit?

A

Credit

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14
Q

What is an income?

A

Commission received
Interest received
Rent received

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15
Q

Is expenses debit or credit?

A

Debit

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16
Q

What are some different expenses?

A 
Rent
Rates
Insurance
Repairs
Wages
Advertising 
Heat
Light
17
Q

What is a long term liability?

A

This is things that you owes and will still owe after one year.

  • loan
  • mortgages
18
Q

What is a current liability?

A

Things an organisation owes that will not be owed after one years

  • overdraft
  • rent payables
19
Q

What is a current asset?

A

Something which a organisation own which can increase/ decrease in the everyday course of trading.

  • cash
  • inventory
20
Q

What is a non-current asset?

A

Something you/ business owns which lasts for longer than a year.

  • furniture
  • equipment
21
Q

What is a liability?

A

Something that you owe or a business owes.

For example

  • loan
  • overdraft
22
Q

What is an asset?

A

Something which you own or a business owns.

  • furniture
  • equipment
23
Q

What is an invoice?

A 
An invoice is a bill. It is sent by the seller to the buyer. 
It includes...
-date
-quantity 
-description of goods
-VAT
-name of costumer and supplier 
-total amount due 
-any discount
24
Q

What is a receipt?

A

This is sent when payment has been received from the buyer. It shows the amount paid and acts as proof of payment

25
Q

What is a bank statement?

A

Sent by the bank showing the transactions which have taken place. Shows the money paid into and out of the account and how much money is in the account

26
Q

What is a credit note?

A

This is used when goods have been returned, due to damage or unsatisfactory with the product.

27
Q

What is the income statement jingle??

A

Small little ladies opening a large Apple loosing all care gone
Little elves don’t all dance down poles!

28
Q

What are the advantages and disadvantages of loans?

A

Advantages

  • quick
  • fixed interest so you can plan ahead

Disadvantages
-interest rates are high

Accounting (3 decks)

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