Purpose of accounting - C Flashcards
What does financial transactions mean?
Financial transactions – actions by a business that involve money either going into or out of a business – for example, making a sale or paying a bill.
What does HM Revenue and Customers (HMRC) mean?
HM Revenue & Customs (HMRC)– HM is an abbreviation for Her (or His) Majesty’s, and the HMRC is a British government department responsible for the collection of all types of taxes
What does fraud mean?
Fraud – when an individual acquires company money for personal gain, through illegal actions.
What does profit mean?
Profit– surplus achieved when total revenue (income) from sales is higher than the total costs of a business.
What does loss mean?
Loss– shortfall suffered when total revenue from sales is lower than the total costs of a business.
What does gross profit mean?
Gross profit– sales revenue minus cost of goods sold (the cost of the actual materials used to produce the quantity of goods sold).
What does sales revenue mean?
Sales revenue– quantity sold multiplied by the selling price.
What does net profit mean?
Net profit– gross profit minus other expenses, for example, rent and advertising.
What does trade receivables mean?
Trade receivables– money owed to the business from sales made but not yet paid for.
What does trade payable mean?
Trade payable– money the business owes from supplies purchased but not yet paid for.
