HMASAC4150 - Annexes: Glossary

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A B C D F G N O P S

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