HMASAC4150 - Annexes: Glossary
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A
Term |
Description |
---|---|
Administrative Expenses |
Relates to expenses incurred by the business, in addition to direct trading expenses on the profit and loss account |
Auditor |
Has responsibility for auditing the prepared accounts and making a judgment as to the credibility thereof |
B
Term |
Description |
---|---|
Balance Sheet |
Is a snapshot of the business assets and liabilities at a moment in time, i.e. the financial year-end |
C
Term |
Description |
---|---|
Capital |
The amount of money introduced into the business |
Creditors |
This represents the monies owed by the business at the date the accounting year-end |
Current Assets |
Can be converted to cash in the course of business |
Current Liabilities |
Amounts owed by the business payable within 1 year |
D
Term |
Description |
---|---|
Debtors |
This represents the monies owed to the business at the date the accounting year-end |
Directors |
Employees of the business |
Director’s remuneration |
This is the wages paid to the directors as employees of the business |
Dividends |
Payments made to the shareholders, after profit, as a reward for investing in the company |
Drawings |
Are the money taken from the business by the sole-proprietor or partners for their own use. This value will also include any goods removed from the business for personal use |
F
Term |
Description |
---|---|
Fixed assets |
Assets acquired for the use of the business, but not for resale |
G
Term |
Description |
---|---|
Gross profit |
This is the trading profit of the business, i.e. sales less cost of goods sold |
N
Term |
Description |
---|---|
Net profit |
Is the profit left to the business after all expenses have been deducted |
O
Term |
Description |
---|---|
Other Income |
The following are examples of other income received and the implications with regards to credibility |
P
Term |
Description |
---|---|
Profit and Loss Account (P&L) |
Shows the transactions of a business over a period of time |
S
Term |
Description |
---|---|
Shareholders |
The actual owners of the business |