3.4 final accounts

assets

everything a business owns or controls that has economic value

• resources that help a business grow

non-current assets

property, buildings, equipment, machinery, vehicles

current assets

cash, debtors, stock

liabilities

debts or obligations that a business owes to others

current liabilities

overdraft, trade creditors, short-term loans

non-current liabilities

bank loans, mortgage, debentures, long-term borrowings

equity

the value of the business belonging to the owners

share capital

the amount of money raised through the sale of shares

retained profit

profits that have been reinvested into the business

intangible assets

non-physical assets that have value and can provide long-term benefits to the business

• eg. brands, copyrights, registered trademarks

loss of value

depreciation

residual value

an estimation of the disposal value at the end of the life span

accumulated depreciation

annual depreciation expense multiplies by the number of years the asset has been used

net book value

the historical cost of an asset original purchase cost