the purpose of accounting

Question 1

accounting

Answer 1

-recording of financial transactions
-planned/acctual
-these figures are used to produce financial information

Question 2

income

Answer 2

the money coming into a business

Question 3

capital income

Answer 3

-money invested by the owners or other investors
-used to set up the business or buy additional equipment e.g. loan, mortgage, shares

Question 4

revenue income

Answer 4

-the money that comes into the business from performing its day-to-day function -selling goods or providing a service

Question 5

expenditure

Answer 5

money spent by a business

Question 6

capital expenditure

Answer 6

-used to buy capital items
-which are assets that will stay in the business for a long period of time

Question 7

non-current assets

Answer 7

-items of value owned by the business & are likely to be held for for more than a year
-e.g. land, premises, equipment & vehicles

Question 8

current assets

Answer 8

-the resources that a company owns that are expected to be converted into cash within a short period
-typically within one year
-e.g. cash, inventory, short-term investments

Question 9

revenue expenditure

Answer 9

-spending on items on a regular or day-to-day basis
-these expenses are shown on the statement of comprehensive income
-e.g. inventory, insurance, interest paid