defenition Flashcards
(13 cards)
trading business
A trading business is a business that purchases stock (goods) and sells the stock at a higher price to make a profit.
stock card
A stock card is an accounting record that records each individual transaction that affects a particular item of stock.
FIFO
FIFO assumes that the items purchased first will be the first items to be sold, withdrawn, donated or lost.
stocktake
A stocktake involves physically counting every item of stock on hand to verify the accuracy of the stock cards and to identify if any stock loss or gain occurred.
bda (balance day adjustment)
Balance Day Adjustments are changes made to revenue or expense accounts on balance day (last day of the reporting period) to determine an accurate profit for that reporting period.
prepaid expense
A prepaid expense is an expense that has been paid in advance but not yet consumed. It occurs when a business makes a cash payment for the expense first, then consumes the expense after the payment.
accrued expense
An accrued expense is an expense that has been incurred (consumed) but has yet to be paid, so is classified as a Current Liability.
prepaid revenue
A prepaid revenue is a revenue where cash is received in advance but is yet to be earned. The business has received cash from a customer but has yet to provide the customer with any stock or services.
accrued revenue
Accrued revenue is revenue that has been earned but has yet to be received. An example of revenue that may be accrued is Interest Revenue on a Term Deposit.
performance evaluation
Performance evaluation involves analysing and interpreting financial reports to help assess the performance of a business, identify any areas of concern and/or areas that can be improved.
benchmark
A benchmark is a value or measure which can be used to assess the performance of a business. By comparing actual results against benchmark values the performance of the business can be assessed.
variance
A variance is the difference between two values.
trend
A trend is a pattern formed by changes in the value of an account (or group of accounts) over time.
