R.H Buis 2 Flashcards
Cost of sales
The cost of producing a product
Assets(fixed)
Items that a business owns that last a long time
Ex:van
Current Assets
Items that are changing with every transaction
Ex:stock or debtor
Capital
Money spent on items that should last a long time (assets)
Gross profit
The money made from selling a product (sales revenue) after the cost of producing the product (cost of sales) has been deducted.
Net profit
The money made from selling a product after all costs (expenditure) have been deducted from gross profit.
Financial year
The trading period over which a business collects information for their annual income statement.
Debtors(trade receivables)
People who owe mo ey to the business for goods or services they have received.
Liabilities
Money that a business owes
Share capital
The amount of money invested in the business by the shareholders
Working capital
Money the business can raise quickly
Reserves
Money that has been saved from previous profitable years
