Revision for Access - Level 1 Flashcards
What is an Asset
It is something that an organisation owns - it has value
What is the term given to money that is owed by an organisation?
Liability
Give an example of an Asset
Building; Motor Vehicles; Trade Receivables; Bank
Give an example of a Liability
Loan; Trade Payables; Monies owed to HM Revenue and Customs; a bank overdraft
What is a customer?
A person or organisation that buys goods or services
What is the term given to a person or organisation that sells goods or services?
A supplier
What is a debtor?
A person or business that owes an organisation money.
What is a trade receivable?
Another term for a debtor?
What is a creditor?
A person or business that is owed money by an organisation
What is another term for a creditor?
A trade payable
What is a cash sale?
Where a customer pays for goods or services at the time of the sale
What is the term when an organisation pays for goods/services immediately at the time of the purchase transaction
A cash purchase
What is a credit sale?
Where a customer is allowed to pay for goods/ services some time after the sale - they will be a debtor (trade receivable) until they have paid.
What is a credit purchase?
Where an organisation pays for goods/ services some time after the initial purchase transaction. The purchaser will be a creditor (trade payable) of the organisation until payment is made.
What is income?
Money an organisation receives for selling it’s goods or services
What is expenditure?
Money paid by an organisation to purchase goods or services
What is profit?
Where an organisation earns more money than it spends
What is the term where an organisation spends more money than it earns?
A loss
How do you calculate Gross Profit?
Sales - Cost of Sales = Gross Profit
What is Cost of Sales
The cost of items necessary to make sales - in a retail organisation this would be goods bought to resell and in a manufacturing business it would be the raw materials and labour costs to make a product
How do you calculate the Net Profit?
Gross profit - Expenditure = Net Profit
What is a Purchase Order?
A document sent from the customer to a supplier detailing the goods that the customer wants to purchase
What is an Invoice?
A business document sent from the supplier to the customer detailing the goods or services supplied and requesting payment
What is a Credit note?
A document sent from the supplier to the customer detailing any goods refunded due to returned goods or correcting errors on the invoice
What is a Remittance advice?
A document sent to inform from the customer to the supplier informing them of monies that have been paid in respect of an invoice
What is a Statement of Account?
A document that summarises the transactions between a supplier and customer - invoice, credit note, payments received and any outstanding balance
What document is given as proof of a cash sale?
A receipt
Which book of prime entry would you record an invoice sent to a customer?
Sales Day Book
What is recorded in the sales returns daybook?
Credit notes sent out to customers
What is recorded in the Cash Receipts book?
All income and receipts received by an organisation
Which book of prime entry would you record invoices received from suppliers?
Purchase Daybook
Where would you record a credit note received from a supplier?
Purchase Returns Daybook
What is recorded in the Cash Payments book?
All payments made by an organisation
What is an alphabetical code?
Codes that only use letters
What type of code uses letter and numbers?
Alphanumerical codes
What is a numerical code?
Codes that only use numbers
What is batch processing?
Similar transactions are dealt with at the same time and so are processed together rather than individually thus saving time
What is the main purpose of a private organisation?
To make a profit
What are the three main types of private organisations?
Sole trader; Partnership & Limited Company
What is the main difference between a sole trader and a partnership?
A sole trader organisation is owned and run by an individual whereas a partnership is owned and run by two or more partners
Who owns a Limited Company?
The shareholders - the people who own shares in the company
Who runs the Limited Company?
Managers are appointed to run a company
What is the main aim of organisations in the public sector?
To provide value for money to the public
What are charities?
A type of business organisation which is set up to raise awareness of a particular cause and aims to raise funds to promote their cause
Who are the internal customers of an accounts department?
Those internal to the organisation: managers; Human Resources department; marketing department; sales department etc
Give examples of external customers of an accounts department
Customers; Suppliers; HM Revenue and Customs; Bank
How would you keep a document stored on your laptop secure?
Password protect the document
Where should you keep sensitive paper documents relating to employees?
In a locked filing cabinet
Being a professional accountant means that you should have up to date technical knowledge, how could you do this?
Attend training courses; read technical magazines
What is the term used to describe the correct and acceptable way of doing something?
Ethical
What ways could an organisation act in an environmentally and socially responsible way?
Recycling facilities; reducing printing; installing energy-saving light bulbs; car sharing
Why might it be useful to use a template in creating documents?
It means documents can be created quickly, easily and in a consistent style with a reduction of errors
If you start a letter with Dear Sir/Madam, how will you close the letter
Yours faithfully
If you start a letter with Dear Mr/Mrs, how will you close the letter
Yours sincerely
What is a house style for documents?
It is a set of guidelines for presenting documents - it may contain information about the use of logos, font, font size, date format etc
How would you communicate with colleagues advising them of a meeting the following day?
How would you communicate with a customer?
Letter
What type of communication is formal?
A Letter
How is informal communication different to formal
Less structured and informal language
