Revenue Expenditure - Definitions

Question 1

Bank charges

Answer 1

Payments made to a bank to have certain types of bank accounts or as fines for activity such as going over an overdraft limit

Question 2

Capital expenditure

Answer 2

Spending on long term assets

Question 3

Capital income

Answer 3

Loans, mortgages, shares, owner’s capital and debentures

Question 4

Cash sales

Answer 4

When customers pay for their goods and services straight away

Question 5

Commission received

Answer 5

A percentage of another firm’s revenue from a sale paid to another business that helped them achieve that sale

Question 6

Compliance

Answer 6

Following rules related to finance and accounting

Question 7

Control

Answer 7

Policies and procedures that prevent fraud and manage trade receivables and trade payables

Question 8

Credit sales

Answer 8

When customers pay for their goods and services a while after receiving them

Question 9

Debentures

Answer 9

Long-term business loans that are not secured against assets

Question 10

Discount allowed

Answer 10

A reduced price offered to customers is classed as a cost

Question 11

Discount received

Answer 11

A reduction in the price of goods and services offered by a supplier

Question 12

Intangible assets

Answer 12

Goodwill, patents, trademarks and brand names

Question 13

Interest paid

Answer 13

payments made to financial institutions to borrow money from them. Calculated as a percentage of the loan amount.

Question 14

Interest received

Answer 14

payments made to financial institutions to borrow money from them. Calculated as a percentage of the loan amount.

Question 15

Interest received

Answer 15

Money received from financial institutions such as banks as a reward for saving money. Calculated as a percentage of money saved.

Question 16

Inventory

Answer 16

Stocks of goods ready to sell, partially finished goods and raw materials.

Question 17

Loans

Answer 17

Money borrowed, usually from a bank, which will be paid back in installments with interest.

Question 18

Management

Answer 18

planning, monitoring and controlling

Question 19

Measuring performance

Answer 19

Comparing revenue, costs and profits to forecasts or goals

Question 20

Mortgages

Answer 20

Loans from banks and building societies that are used to buy land and buildings such as offices and shops.

Question 21

Non-current assets

Answer 21

Tangible and intangible assets that a business expects to keep in their current form for at least 12 months

Question 22

Owner’s capital

Answer 22

Owner financial contributions to a business

Question 23

Purpose of accounting

Answer 23

Recording transactions, management, compliance, measuring performance and control.

Question 24

Recording transactions

Answer 24

Entering money received and spent in a document or database.

Question 25

Reducing balance depreciation

Answer 25

An asset is depreciated by a set percentage of its remaining value each year

Question 26

Rent received

Answer 26

Payments that tenants make to landlords for use of their property

Question 27

Revenue expenditure

Answer 27

Expenses that are incurred in the daily operations of a business

Question 28

Revenue income

Answer 28

Cash sales, credit sales, rent received, commission received, interest received and discount received.

Question 29

Shares

Answer 29

Portions of a business ownership that can be bought by investors

Question 30

Straight-line depreciation

Answer 30

(cost-residual value)/useful life