What is ?
• Accounting Equation
All accounting entries made in the books of account of abusiness have a relationship based on the accountingequation: Assets = Liabilities + Owner’s Equity
• Asset
Tangible or intangible items of value owned by abusiness e.g. cash, stock, buildings & vehicles
• Balance Sheet
Shows a snapshot at a given point in time of the networth of the business. It details the assets, liabilities andowner’s equity
• Capital
Amount invested in the business (usually at start up, butmay include additional funds raised)
• Conversion Period
The period (month) in which the accounts are beingconverted, or transferred over, from one system toanother
• Cost of Sales
Expenses in the financial year which can be directlyattributed to sales of those goods or services
• CreditRevenue
in the Profit and Loss or Liability in theBalance sheet
• Creditor
Amount owed to a supplier from the business
• Current Asset
Short-term asset (items or amounts to be used orreceived within 12 months) e.g. stock or cash
• Current Liability
Short-term liability (items or amounts to be paid within12 months) e.g. supplier or bank overdraft
• Debit
Expenses in the Profit and Loss or Asset in the Balancesheet
• Debtor
Amount owed to the business from a customer
• Double Entry
BookkeepingSystem of bookkeeping where all transaction have 2entries, a debit and a credit, which net to zero.
• Expense
Amount relating to expenditure for the financial year(excluding purchases of assets or cost of sales)regardless of whether cash has been paid or not
• Fixed Asset
Long-term asset (items or amounts to be used or