accounting elements Flashcards
(24 cards)
What are assets?
Resources a business owns or controls that are expected to provide future benefits
Examples include land, property, equipment, and cash.
Name three examples of non-current assets.
- Land
- Property
- Plant and Equipment
Name three examples of current assets.
- Inventory
- Trade Receivables
- Cash at Bank
What are liabilities?
Amounts owed by a business to others that are expected to be settled in the future
Liabilities can be classified as current or non-current.
Name one example of a non-current liability.
Long-term borrowings (i.e. Loan or Mortgage)
Name three examples of current liabilities.
- Trade Payables
- Bank Overdraft
- Expense Payable
What is equity?
Claim by the owner(s) on the net assets of a business.
What is capital in a business context?
Contribution by owner to the business.
Define profit.
Amount earned when income earned is more than expenses incurred in the accounting period.
What are drawings?
Withdrawal by owner from business for personal use.
Define income.
Amounts earned from the activities of a business.
Name three examples of income.
- Sales Revenue
- Commission Income
- Interest Income
What are expenses?
Amounts incurred to earn income in the same accounting period.
Name three examples of expenses.
- Cost of Sales
- Advertising
- Bank Charges
Fill in the blank: Property includes _______ and _______.
[land] and [building]
Fill in the blank: Plant and equipment includes _______ and _______.
[factory] and [machines]
Fill in the blank: Fixtures and fittings include _______ and _______.
[furniture] and [things fitted to the wall or ceiling]
What is inventory?
Things that the business buys for resale.
What does trade receivables refer to?
Amount that business is going to receive from customers for goods or services sold on credit.
What is a bank overdraft?
Amount that the business owes the bank because it paid more than the amount it had deposited.
What does sales revenue represent?
Amount that the business earned from selling inventory.
What is the cost of sales?
Cost price of inventory sold.
Fill in the blank: Bank charges are amounts that business pays the bank for using its _______.
[services]
What is discount allowed?
Biz received less than the amount that its customer owed.
