Business M 3.4 HL

Historic cost

purchase cost of a particular non-current asset. it is used in the calculation of depreciation.

Residual value

is an estimate of the value of the non-current asset at the end of its useful life

Straight line method

means of calculating depreciation that reduces the value of a non-current asset by the same value each year throughout its useful life

Units of production method

calculating depreciation allocates an equal amount of depreciation to each unit of output rendered by a non-current asset

Share capital

the amount of money raised through the sale of shares. the value raised when the shares were first sold, rather then their current market value.

Cost of sales

refers to the direct costs of producing or purchasing stock that has been sold to customers.

Final accounts

published annual financial statement that all limited liability companies are legally obliged to report, namely the balance sheet and the P&L account.