Balance sheets Flashcards
(9 cards)
1
Q
What is a debtor?
A
Someone who owes the business money
2
Q
What is a trade creditor?
A
A business to which the business owes money to.
Business owes money to suppliers.
3
Q
What is drawings?
A
Money taken out of the business by the owner.
4
Q
What is Working capital?
A
The day to day finance available for running a business.
5
Q
What is Capital Expenditure?
A
Spending on new fixed assets.
New machinery and buildings.
6
Q
Calculation of Working Capital?
A
Current assets - Current liabilities.
7
Q
Calculation for Net assets?
A
Fixed assets + Current assets - Current Liabilities
8
Q
Calculation for Net profits?
A
Capital Employed - Opening Capital + Drawing
9
Q
Importance of Working Capital?
A
- Needed to fund day to day business
- Needed to pay for raw materials.
