Lesson 1, Chapter 2 Flashcards
(17 cards)
What are sales?
Exchanging a good or service for money
What are Purchases?
Buying a good or service
What are Payments?
Transfer of money to someone else (ex. for purchases or for wages to employees).
What are Receipts?
Getting money from someone else (ex. customers).
What are Petty Cash?
Paying for low value items with a small fund of cash
What are Payroll?
Wages & salaries paid to employees, and any payroll taxes
What are Wages (Staff Pay)?
• Money that is paid to employees for their work.
• Usually paid every week or month.
What are Salaries?
A salary is a fixed payment (often monthly) for employment, irrespective of actual hours worked. I
What are Invoices?
Evidence of A Sale
What are Remittance Advice?
Is evidence of payment by a customer
What are Accounting Systems?
• It is where the details from the financial documents are entered & totalled.
• Entries for each transaction are recorded in the appropriate account
Who is interested in your financial information?
• Tax authorities
• Future investors
• Bank managers
• Suppliers
What are tax authorities?
They may look through your business’ records to determine if the tax expense has been correctly calculated & paid.
What are future investors?
They may want to look at how well your business is doing to decide whether or not to invest their money into your business.
What are Bank Managers?
Will ask to see your financial statements if you ask for a bank loan.
What are Suppliers?
Suppliers will ask to see your financial statements before they decide to give you business credit—where you receive the goods or services now & pay later.
