Lecture 4a and 4B Flashcards

(10 cards)

1
Q

What is income?

A

Income is revenue from sales minus expenses which are everyday costs such as rent or wages on the income statement.

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2
Q

What are non-current assets?

A

Non-current assets are items kept for more than 1 year like property, machines, or vehicles on the statement of financial position.

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3
Q

What are current assets?

A

Current assets are items kept for less than 1 year like trade receivables and cash on the statement of financial position.

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4
Q

What is equity?

A

Equity is money that the owners put into the company.

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5
Q

What are current liabilities?

A

Current liabilities are money that is owed in a year like trade payables or bank overdrafts.

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6
Q

What are non-current liabilities?

A

Non-current liabilities are money that is owed in more than a year like long-term loans.

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7
Q

What are relevant costs?

A

Relevant costs are only cash items.

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8
Q

What is opportunity cost?

A

Opportunity cost is the next best alternative.

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9
Q

What are sunk costs?

A

Sunk costs are historical costs.

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10
Q

What are fixed costs?

A

Fixed costs are ignored unless directly attributed as they will exist no matter what.

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