Revenue Expenditure - Definitions Flashcards
Bank charges
Payments made to a bank to have certain types of bank accounts or as fines for activity such as going over an overdraft limit
Capital expenditure
Spending on long term assets
Capital income
Loans, mortgages, shares, owner’s capital and debentures
Cash sales
When customers pay for their goods and services straight away
Commission received
A percentage of another firm’s revenue from a sale paid to another business that helped them achieve that sale
Compliance
Following rules related to finance and accounting
Control
Policies and procedures that prevent fraud and manage trade receivables and trade payables
Credit sales
When customers pay for their goods and services a while after receiving them
Debentures
Long-term business loans that are not secured against assets
Discount allowed
A reduced price offered to customers is classed as a cost
Discount received
A reduction in the price of goods and services offered by a supplier
Intangible assets
Goodwill, patents, trademarks and brand names
Interest paid
payments made to financial institutions to borrow money from them. Calculated as a percentage of the loan amount.
Interest received
payments made to financial institutions to borrow money from them. Calculated as a percentage of the loan amount.
Interest received
Money received from financial institutions such as banks as a reward for saving money. Calculated as a percentage of money saved.
Inventory
Stocks of goods ready to sell, partially finished goods and raw materials.
Loans
Money borrowed, usually from a bank, which will be paid back in installments with interest.
Management
planning, monitoring and controlling
Measuring performance
Comparing revenue, costs and profits to forecasts or goals
Mortgages
Loans from banks and building societies that are used to buy land and buildings such as offices and shops.
Non-current assets
Tangible and intangible assets that a business expects to keep in their current form for at least 12 months
Owner’s capital
Owner financial contributions to a business
Purpose of accounting
Recording transactions, management, compliance, measuring performance and control.
Recording transactions
Entering money received and spent in a document or database.
Reducing balance depreciation
An asset is depreciated by a set percentage of its remaining value each year
Rent received
Payments that tenants make to landlords for use of their property
Revenue expenditure
Expenses that are incurred in the daily operations of a business
Revenue income
Cash sales, credit sales, rent received, commission received, interest received and discount received.
Shares
Portions of a business ownership that can be bought by investors
Straight-line depreciation
(cost-residual value)/useful life
