Chapter 23 Flashcards
Accounts
Financial records of a business’s transactions.
Accountants
Professionally qualified people who have responsibility for keeping accurate accounts
and for producing final accounts.
Final accounts
Produced at the end of the financial year and give details of the profit or loss made
over the year and how much the business is worth.
Income statement
A document that records the income of a business and all costs incurred to earn that
income over a period of time. It will show if the business has made a profit or loss.
Gross profit
Sales revenue minus the cost of sales (or cost of goods sold),
Sales revenue
Incorne to a business during a period of time from the sales of goods or services.
Cost of goods sold or
cost of sales
The direct cost of producing or buying in the goods actually sold by the business
during a time period
Trading account
This shows how the gross profit is calculated.
Net profit
Profit made after all costs have been deducted from sales revenue. It is calculated by
gross profit minus expenses. Now referred to as ‘profit’
Depreciation
The fall in value of a fixed (non-current) asset over time.
Retained profit
Net profit reinvested into a company after deducting tax and payments to owners
Dividends
Annual payments from company profits to shareholders.
