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Accounting basics

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  • current liabilities
    obligations of the business to be met within a year
  • Current Assets
    assets used up during production and which will realise cash within a year
  • Fixed Assets
    assets have a useful life of more than one year
  • Revenue
    income (no. of output sold*selling price per unit)
  • Example of current assets
    Debtors, raw materials, stock
  • _______________________ account records revenue and costs of a business
    Profit and Loss
  • Leasehold assets
    agreement permitting the leaseholder the right to use the asset for a fixed period in exchange for a regular payment
  • _______________________ records assets and liabilities of a business
    Balance Sheet
  • liabilities
    what a business owes
  • Examples of current liabilities
    tax payable, interest owing
  • Profit
    Total revenue - Total cost
  • What is accounting?
    process of recording financial transactions pertaining to a business
  • Goodwill
    audited value - market value of a business (actual worth)
  • fixed liabilities
    long term liabilities (more than a year)
  • Assets
    resources a business owns
  • Freehold assets
    full ownership of assets
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