Worked Example Flashcards
What is capital?
The owner of the business starts by investing money into the business bank account
Why will the business need money to start trading?
It may need to pay rent, buy inventory, or pay wages before it’s generated money
What is buying inventory referred to as?
A purchase, which is a type of expense
What is rent?
An expense of the business
What is the double entry for rent?
The business pays out 1k of its bank, but 1k will Be credited to the bank account
The rent is an expense, debited to the rent account
Why is stationary classified as an expense of the business?
As it is used and not resold
What is the double entry for stationary
Business pay 200, this will be credited to the bank and debited to the stationary account
What is a commute to the business?
A none current asset
What are some terms the same as sale?
Revenue, sales revenue
What would a business providing a service be classed as?
A sale
