Lecture 4a and 4B Flashcards
(10 cards)
What is income?
Income is revenue from sales minus expenses which are everyday costs such as rent or wages on the income statement.
What are non-current assets?
Non-current assets are items kept for more than 1 year like property, machines, or vehicles on the statement of financial position.
What are current assets?
Current assets are items kept for less than 1 year like trade receivables and cash on the statement of financial position.
What is equity?
Equity is money that the owners put into the company.
What are current liabilities?
Current liabilities are money that is owed in a year like trade payables or bank overdrafts.
What are non-current liabilities?
Non-current liabilities are money that is owed in more than a year like long-term loans.
What are relevant costs?
Relevant costs are only cash items.
What is opportunity cost?
Opportunity cost is the next best alternative.
What are sunk costs?
Sunk costs are historical costs.
What are fixed costs?
Fixed costs are ignored unless directly attributed as they will exist no matter what.