List of accounts and elements Flashcards
Quick recall of account and elements (35 cards)
What type of account is ‘Expenses’?
Recurring, usually services, charges, paid
Expenses typically include costs incurred in the operation of a business.
What does ‘Income’ refer to?
Received, revenue
Income is the money received by a business, typically from sales.
What is the purpose of ‘Advertising’?
Expense
Advertising is a cost incurred to promote goods or services.
What are ‘Bank charges’?
Amount charged by bank for services provided
Bank charges are fees that banks impose for account maintenance and other transactions.
What does ‘Bank Loan’ represent?
Liabilities
A bank loan is borrowed money that must be repaid with interest.
Define ‘Bank overdraft’.
Negative cash at bank (NOT account)
A bank overdraft allows an account holder to withdraw more money than is available in the account.
What is ‘Capital’ in accounting terms?
Equity
Capital refers to the owner’s contribution to the business.
What does ‘Cash at Bank’ indicate?
$ in bank
This represents the amount of cash held in a bank account.
What is meant by ‘Cash in hand’?
$ in office
Cash in hand refers to the physical cash available in the business premises.
What is ‘Commission expense’?
Reward for meeting sales target
A commission expense is paid to sales personnel for achieving specific sales goals.
What is ‘Commission income’?
Income
Commission income is revenue earned from facilitating sales or services.
Define ‘Cost of sales’.
Cost of goods sold, quantity sold x purchase price
This represents the direct costs attributable to the production of the goods sold by a company.
What does ‘Discount allowed’ refer to?
Expense
A discount allowed is a reduction in price granted to customers for early payment.
What is ‘Discount received’?
Income
A discount received is a reduction in price granted by suppliers for early payment.
What are ‘Drawings’ in accounting?
Equity
Drawings refer to resources taken from the business by the owner.
What do ‘Fixtures and fittings’ include?
Assets
Fixtures and fittings refer to furniture and equipment used in a business.
What are ‘Freight charges/Transport expense’?
Expense
These are costs associated with the transportation of goods.
What are ‘General expenses’?
Expense
General expenses are the routine costs of running a business that are not directly tied to production.
What does ‘Insurance’ represent?
Expense
Insurance is a cost incurred to protect against risks.
What is ‘Interest expense’?
Expense
Interest expense is the cost incurred from borrowing funds.
Define ‘Interest income’.
Income
Interest income is revenue earned from interest on deposits.
What does ‘Inventory’ consist of?
Assets
Inventory includes goods that a business buys to sell.
What is ‘Maintenance expense’?
Expense
Maintenance expense covers costs associated with keeping assets in good working condition.
What does ‘Motor Vehicle’ refer to?
Assets
Motor vehicles are cars, motorcycles, and vans owned by the business.
