FINANCIAL STATEMENTS AND BUSINESS STRUCTURE

FLASHCARDS

Income Statement: A financial statement prepared to calculate the gross profit and profit (or loss) for the year over a specific trading period.Statement of Financial Position: A snapshot statement showing the assets, liabilities, and capital of a business at a specific date.Gross Profit: The profit made directly from buying and selling goods, calculated as $\text{Revenue} - \text{Cost of Sales}$.Profit for the Year: The remaining profit after all operating expenses are deducted from gross profit plus any other income.Work in Progress (WIP): Partially finished goods held by a manufacturing business at the end of an accounting period.Partnership Agreement (Deed): A legal document setting out the terms and rules governing how a partnership operates (e.g., profit-sharing ratios, interest on capital/drawings, partner salaries).Limited Liability Company: A business structure that has a separate legal identity from its owners, meaning shareholders are only liable for debts up to the amount unpaid on their shares.

• Income Statement: A financial statement prepared to calculate the gross profit and profit (or loss) for the year over a specific trading period.

• Statement of Financial Position: A snapshot statement showing the assets, liabilities, and capital of a business at a specific date.

• Gross Profit: The profit made directly from buying and selling goods, calculated as $\text{Revenue} - \text{Cost of Sales}$.

• Profit for the Year: The remaining profit after all operating expenses are deducted from gross profit plus any other income.

• Work in Progress (WIP): Partially finished goods held by a manufacturing business at the end of an accounting period.

• Partnership Agreement (Deed): A legal document setting out the terms and rules governing how a partnership operates (e.g., profit-sharing ratios, interest on capital/drawings, partner salaries).

• Limited Liability Company: A business structure that has a separate legal identity from its owners, meaning shareholders are only liable for debts up to the amount unpaid on their shares.

• Income Statement: A financial statement prepared to calculate the gross profit and profit (or loss) for the year over a specific trading period.

• Statement of Financial Position: A snapshot statement showing the assets, liabilities, and capital of a business at a specific date.

• Gross Profit: The profit made directly from buying and selling goods, calculated as $\text{Revenue} - \text{Cost of Sales}$.

• Profit for the Year: The remaining profit after all operating expenses are deducted from gross profit plus any other income.

• Work in Progress (WIP): Partially finished goods held by a manufacturing business at the end of an accounting period.

• Partnership Agreement (Deed): A legal document setting out the terms and rules governing how a partnership operates (e.g., profit-sharing ratios, interest on capital/drawings, partner salaries).

• Limited Liability Company: A business structure that has a separate legal identity from its owners, meaning shareholders are only liable for debts up to the amount unpaid on their shares.

• Income Statement: A financial statement prepared to calculate the gross profit and profit (or loss) for the year over a specific trading period.

• Statement of Financial Position: A snapshot statement showing the assets, liabilities, and capital of a business at a specific date.

• Gross Profit: The profit made directly from buying and selling goods, calculated as $\text{Revenue} - \text{Cost of Sales}$.

• Profit for the Year: The remaining profit after all operating expenses are deducted from gross profit plus any other income.

• Work in Progress (WIP): Partially finished goods held by a manufacturing business at the end of an accounting period.

• Partnership Agreement (Deed): A legal document setting out the terms and rules governing how a partnership operates (e.g., profit-sharing ratios, interest on capital/drawings, partner salaries).

• Limited Liability Company: A business structure that has a separate legal identity from its owners, meaning shareholders are only liable for debts up to the amount unpaid on their shares.