Accounting

YEAR 11 ACCOUNTING

Asset

Resource owned by the business that gives future economic benefit.

Liability

Amount owed by the business.

Income

Money earned by the business.

Expense

Cost incurred to earn income.

Accrued Expense

Expense owed but not paid yet

Accrued Income

Income earned but not received yet

Income in Advance

Cash received before earning it

Prepayment

Paid expense before using it

Depreciation

Loss of value of an asset over time

how to calculate profit

Income − Expenses

Equity / Net Assets

Assets − Liabilities

Carrying Amount

Cost − Accumulated Depreciation

Depreciation (Straight Line)

Cost ÷ Useful Life

Income Statement

Shows income, expenses, and profit.

Statement of Financial Position

Shows assets, liabilities, and equity.

PPE

Property, Plant and Equipment (non-current assets).