Business flash cards

Question	Answer
Capital	This is money the owner has invested in the business and any profits they have not drawn out of the business throughout the financial year
Fixed Assets (FA)	Items purchased by the business to help it to operate/ Have a life expectancy of more than one year.
Drawings	This is the money the owner(s) of the sole trader/partnership takes out of the business in order to pay for their living expenses.
Long Term Liabilities (LTL)	This consists of money the business owes to external parties which have a repayment period of longer than one year.
Current liabilities (CL)	These are the debts of the business - the money the business owes to other people
Creditors	If the business has purchased goods on credit these supplier become creditors of the business
Debtors	Customers who have received goods on credit and will have to pay for them in the future.
Stock	Items that have been purchased for resale within a financial year but have not yet been sold
Bank overdraft	If the business is spreading the bank's money the bank balance becomes a CL, as the business must at some stage pay the money back to the bank
Bank	This is the money the business has in its business bank account (credit balance)
Cash	This is notes and coins the business has available to spend

Resource summary

	Created by Dylan Meares over 7 years ago