Topic 4 Accounting Concepts Flashcards
1
Q
What is a sole trader (sole propietor)
A
A business owned by only one person, who usually manages it too
2
Q
What is capital
A
Capital is the money you need to start up a business
3
Q
What are the 3 ways of obtaining capital
A
- A loan from the bank
- Money invested by friends or family
- Your own money
4
Q
What is income
A
Income is the money that you earn for services rendered or selling goods
5
Q
What are expenses
A
An expense is a payment made for goods or services you need to run your business on a day-to-day basis
6
Q
Give 4 examples of expenses
A
Rent paid Telephone Water Electricity Salaries Wages trading licence Stationery
7
Q
What is the formula for profit
A
Profit= income-expenses
8
Q
What is a long term liabilities
A
Long term liabilities have to be paid back over a period longer than 12 months
9
Q
What are short term liabilities
A
Liabilities that have to be paid back within 12 months
