National 5 Accounting Practice

These flashcards cover essential vocabulary and key concepts related to the National 5 Accounting assignment assessment task.

Income Statement

A financial statement that shows a company's revenue and expenses over a period of time, leading to net profit or loss.

Statement of Financial Position

A financial statement that provides a snapshot of a company's assets, liabilities, and equity at a particular point in time.

Extraneous Items

Items that appear only once in financial statements but are categorized incorrectly, such as appearing in an expense statement but not elsewhere.

Consequential Errors

Mistakes in financial statements that do not affect the overall accounting process and can still earn marks as the correct process was followed.

General Expenses

The costs incurred by a business that are not directly tied to a specific function or activity, often including overhead costs.

Provision for Bad Debts

An estimated amount that a company expects to potentially lose due to customers failing to pay their outstanding debts.

Depreciation

The systematic reduction of the recorded cost of a fixed asset, reflecting wear and tear over time.

Acruals

Accounting adjustments for revenues that are earned but not yet received and expenses that are incurred but not yet paid.

Layout/Headings

The arrangement and labeling of items in a financial statement, which must be clear and correctly categorized to earn credit.

Valuation Criteria

The standards or rules applied to determine the value of assets or liabilities in financial reporting.