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Intellectual property
________: asset that has been developed from human ideas and knowledge.
Goodwill
________ arises when a business is valued at or sold for more than the balance sheet values of its assets.
Balance sheet
________= Statement of financial position: accounting statement that records the values of a businesss assets, liabilities and shareholders equity at one point in time.
Dividends
________: share of the profits paid to shareholders as a return for investing in the company.
Window dressing
________: presenting the accounts of a business in the best possible, or most flattering, way which could potentially mislead users of accounts.
Gross profit
________: equal to sales revenue less cost of sales.
Annual depreciation
________ attempts to record capital expenditure over the useful life of an asset and avoids recording this expenditure as a one- off cost when the asset is purchased.
Window dressing
presenting the accounts of a business in the best possible, or most flattering, way which could potentially mislead users of accounts
Gross profit
equal to sales revenue less cost of sales
Sales revenue (or sales turnover)
total value of sales made during the trading period = selling price x quantity sold
Cost of sales (or cost of goods sold)
direct cost of purchasing the goods that were sold during the financial year
Operating profit (net profit or profit before interest and taxation)
gross profit minus overhead expenses
Profit after tax
operating profit minus interest costs and corporation tax
Dividends
share of the profits paid to shareholders as a return for investing in the company
Retained profit
profit left after all deductions, including dividends, have been made; this is "ploughed back" into the company as a source of finance
Balance sheet = Statement of financial position
accounting statement that records the values of a businesss assets, liabilities and shareholders equity at one point in time
Shareholders equity
total value of assets less total value of liabilities
Share capital
total value of capital raised from shareholders by the issue of shares
Intangible assets
assets that have no physical substance and are not financial instruments
Intellectual property
asset that has been developed from human ideas and knowledge
Straight-line depreciation
a constant amount of depreciation is subtracted from the value of the asset each year
Window dressing
Presenting the accounts of a business in the best possible, or most flattering, way which could potentially mislead users of accounts
Profit and loss account = Income statement = Statement of comprehensive income records
The revenue, costs and profit (or loss) of a business over a given period of time
Gross profit
Equal to sales revenue less cost of sales
Sales revenue (or sales turnover)
Total value of sales made during the trading period selling price x = quantity sold
Cost of sales (or cost of goods sold)
Direct cost of purchasing the goods that were sold during the financial year
Operating profit (net profit or profit before interest and taxation)
Gross profit minus overhead expenses
Profit after tax
Operating profit minus interest costs and corporation tax
Dividends
Share of the profits paid to shareholders as a return for investing in the company
Retained profit
Profit left after all deductions, including dividends, have been made; this is "ploughed back" into the company as a source of finance
Balance sheet = Statement of financial position
Accounting statement that records the values of a business's assets, liabilities and shareholders' equity at one point in time
Shareholders' equity
Total value of assets less total value of liabilities
Share capital
Total value of capital raised from shareholders by the issue of shares
Cash flow statement = Statement of cash flows
It shows where cash was received from and it what it was spent on
Intangible assets
Assets that have no physical substance and are not financial instruments
Goodwill
Goodwill arises when a business is valued at or sold for more than the balance sheet values of its assets
Intellectual property
Asset that has been developed from human ideas and knowledge
Straight-line depreciation
Constant amount of depreciation is subtracted from the value of the asset each year
Integrity
Accountants should act honestly in all dealings with clients and also with tax authorities and all other stakeholder groups. It means being straightforward, honest and truthful in all professional and business relationships
Objectivity
Accountants shouldn't allow bias, conflict of interest or the influence of other people to override their professional judgement
Professional competence and due care
Accountants are required to carry out their work with proper regard for relevant technical and professional standards. This means that nobody should undertake professional work which they are not competent to perform
Confidentiality
Accountants shouldn't disclose professional information unless they have specific a permission or a legal or professional duty to do so
Professional behavior
When breached, it leads to most complaints to the professional accounting bodies. Clearly, accountants should comply with all relevant legal obligations when dealing with a client's affairs and assist clients to do the same
Note 
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