use of funds Flashcards
Assets that will not, in the ordinary course of
business, turn into cash in less than 12 months are
entered in the balance sheet as?
fixed assets
There are two main types of fixed asset:
tangible and intangible assets
What are tangible fixed assets?
name some
items owned by the business which
have a physical existence
- land &
buildings,
- machinery & equipment,
- vehicles and
- fixtures & fittings
What are intangible fixed assets?
they cannot be touched
for excample:
- the BRAND name
- PATENTS/COPYRIGHT
The short-term resources of the business are
referred to as?
current assets
In the balance sheet, current assets are laid out
according to their?
liquidity
What are Stocks and inventories?
goods which a firm
holds to be processed or sold in the normal course
of its business
in which forms can stock be hold?
- raw material/components
- semi finished goods/work in progress
- finished goods (not yet sold)
When goods are sold by a
company on credit, the money owed to it by the
buyers at the end of the accounting period is
known as?
accounts receivable, or debtors
what is the realisation concept?
when the item is delivered, a sale is made. not when the money is paid or you just received an order
sales revenue - cost of goods sold = gross profit
i know :)
gross profit – operating costs =
trading profit or operating income
Any income earned by the firm outside its
normal trading activities is recorded as?
non operating income
what are retained earnings? Name a synonym
profit left after tax and dividends
undistributed profit
what´s the difference between ordinary and preference shares?
- the holder of the preference shares is paid out ahead of the holders of the ordinary shares on liquidation
- they receive a preferential dividend ahead of ordinary shareholders
- but NO voting rights
