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Accounting > Terminology > Flashcards

Terminology Flashcards

1
Q

What is an asset?

A

Possessions of a business which has value, could be converted into cash

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2
Q

What is a non-current asset?

A

Intention is not to be converted. These are possessions purchased by the business with the aim of using them for longer than a year.

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3
Q

List the non-current assets

A
  • Land and buildings
  • Vehicles
  • Equipment
  • Fixed deposits
  • Notice deposits
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4
Q

What are land and buildings?

A

non-current asset
property, factory
buildings, office buildings

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5
Q

What are vehicles?

A

non-current asset
cars, trucks,
motor cycles, tractors,
bakkies, etc

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6
Q

What is equipment?

A 
Non-current asset
computers,
printers, tools, cash
register / till, desks, chairs,
shelves, etc.
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7
Q

What are fixed deposits?

A

non-current asset

Money invested for a given period of time. Earns interest

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8
Q

What are notice deposits?

A

money invested for a certain
period, which needs a
notice of 30/60/90 days
before it will be paid back

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9
Q

What is a non-current asset also known as?

A

Fixed assets

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10
Q

What are current assets?

A

Assets that can be converted into cash in the short term, less than a year.

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11
Q

List the current assets

A
  • Trading stocks
  • Debtors control
  • Bank
  • Cash float
  • Petty cash
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12
Q

What is trading stock?

A

Current assets

Goods purchased for resale

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13
Q

What is debtors control?

A

Current assets

those who owe money to the business

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14
Q

What is debtors control also known as?

A

Accounts receivable

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15
Q

What is the bank?

A

Current assets

money in the current bank account

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16
Q

What is a cash float?

A

Current assets

cash in the cash register/ till to give change to customers

17
Q

What is a petty cash?

A

Current assets

money used to buy low-cost items, usually less than RI0O per item

18
Q

When is trading stock expected to be sold by?

A

Within one year

19
Q

What are non-current liabilities?

A

Long-term borrowings that will be paid back over a period longer than a year.

20
Q

What are non-current liabilities also known as?

A

Long-term liabilities

21
Q

List the non-current liabilities

A
  • Loan

* Mortgage bond

22
Q

What is a loan?

A

Non-current liabilities

money borrowed to finance business operations. Interest is charged.

23
Q

What is a mortgage bond?

A

money borrowed to buy a house, office

24
Q

List the current liabilities?

A
  • Creditors control

* Bank overdraft

25
Q

What is creditors control?

A

money owed to other businesses should WE (our

business) need to buy something on credit

26
Q

What is creditors control also known as?

A

Accounts payable

27
Q

What is a bank overdraft?

A

a facility offered by the bank where you can use more money than you have in your account

28
Q

What does owner’s equity consist of?

A
  • Capital
  • Drawings
  • Income
  • Expenses
29
Q

Define capital

A

OE
The money or assets the
owner gives to start up a business

30
Q

Define drawings

A

OE

The money the owner takes out of the business for personal use

31
Q

What does the Nominal Accounts Section consist of?

A

Part of OE

  • Income
  • Expenses
32
Q

Define income

A

OE

Earnings of the business. Income increases OE

33
Q

Define expense

A

OE

Costs of running a business. Expenses decrease OE

34
Q

List examples of income

A 
Sales
Current income
Commission income (every product you sell)
Rent income
Interest income
35
Q

List examples of expenses

A 
Cost of sales
 Salaries/Wages
Telephone
Rent expense
Water/electricity
advertising
stationery
packing materials
insurance
cleaning materials
repairs/maintenance
fuel
rates/taxes

Accounting (8 decks)

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