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JC Final Accounts
JC Final Accounts Key Definitions
| Question | Answer |
|---|---|
| Amounts Due by the Firm | ADD the amount due to the expense in the profit and loss account Show the amount due as a current liability in the balance sheet |
| Amounts Due to the Firm | ADD the amount due to the gain in the profit and loss account Show the amount due to the firm as a current asset in the balance sheet |
| Amounts Prepaid by the firm | SUBTRACT the amount prepaid from the expense in the profit and loss account Show the amount prepaid by the firm as a current asset in the balance sheet |
| Amounts Prepaid to the Firm | SUBTRACT the amount prepaid from the gain in the profit and loss account Show the amount prepaid to the firm as a current liability in the balance sheet |
| Fixed Assets | these are long-term assets which will usually remain in the business for more than a year Examples include: Buildings, Equipment |
| Depreciation | Is loss of value of an asset due to wear and tear. |
| Net Book Value | how much the fixed assets are worth now |
| Current Assets | these are short term assets which will usually change their value within a year Examples include: cash, bank, closing stock |
| Current Liabilities | these refer to money owed by the firm must be repaid within a year, for example: bank overdraft, Creditors |
| Issued Share Capital | is the actual number of shares a company has sold |
| Authorised share capital | is the maximum number of shares a company can sell. |
| Long Term Liabilities | these are amounts owed by the firm which will be repaid over a longer period, for example a 10 year loan |
| Capital Employed | Is all the money that is invested in the business. |
| Retained profit | the profit that is put back into the business |
| Working Capital | Current Assets-Current Liabilities. It represents the amount of money available for the day to day running of the business. |
| Total Net Assets | is the total of fixed assets plus working capital |
| Gains | Are income other than trading income received by a business E.g. Rent received, discount received, |
| Overheads | are expenses involved in the running of a business on a daily basis |
| Net Profit | If profit is greater than expenses |
| Net Loss | If profit is less than expenses |
| Dividends | The amount which is paid to the shareholders out of the net profit each year |
Created by:
ms.scahill
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