Year 10 Commerce Accounting
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11 Terms
Accounting Equation
Assets = Liabilities + Owner's Equity.
Assets
An item a business owns which holds value.
Liabilities
A debt a business owes to an outside party, external business.
Owner’s Equity
Owners value in the business, calculated as Assets - Liabilities.
Current Assets
Assets expected to be used or turned into cash within 12 months.
Non-Current Assets
Assets that will provide value to the business for more than 12 months.
Current Liabilities
Debts owed within 12 months.
Non-Current Liabilities
Debts owed beyond 12 months.
Bank Overdraft
Borrowing money from the bank (short-term loan)
Creditor
A person or business the business owes money to
Debtor
A person or business who owes money to the business
