Accounting and Financial Statements

Flashcards covering key concepts in accounting based on the provided lecture notes.

Cash Book

A financial record that tracks cash inflows and outflows, functioning both as a journal and an account.

Accounting Information

Data that is collected, processed, and communicated in the form of financial statements for decision-making.

Accounting Equation

The fundamental equation in accounting that states Assets = Liabilities + Equity.

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time.

Expenditures

Money spent or costs incurred in the operation of a business.

Revenue Expenditure

Expenses that are incurred for the day-to-day functioning of a business, typically short-term in nature.

Capital Expenditure

Expenses incurred to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Trial Balance

A list of all the accounts in a company's general ledger, with their corresponding balances, used to verify that total debits equal total credits.

Trading Account

A financial account that shows the gross profit or loss made by a business from its trading operations.

Profit and Loss Account

A financial statement that summarizes revenues, costs, and expenses incurred during a specific period, usually a fiscal quarter or year.

Working Capital

The difference between current assets and current liabilities, indicating the short-term financial health of a business.

Intangible Assets

Non-physical assets that represent a legal claim, including goodwill and trademarks.

Current Assets

Assets that are expected to be converted into cash or used up within one year.

Current Liabilities

Obligations that are expected to be settled within one year.

Capital Employed

The total amount of capital utilized for the acquisition of profits.