Y8 Business Studies - C6 Business Accounting

What is an asset?

• A document sent by the firm when it has received its goods

• A financial record of a firm's transactions

• An item owned by a business that has value

• A liability of a company

Give 3 examples of assets of a company.

• Land, vehicles, equipment

• Tax payable, dividend, trade payable

• Car loan, mortgage

• Stocks, inventory, cash

What is a liability?

• A request for buying products

• An obligation of a company that requires settlement in the future

• A written order to a bank to pay a stated amount of money to a person or business

• An item owned by a business that has value

Give 2 examples of liabilities of a company.

• Land, vehicles, equipment

• Tax payable, dividend, trade payable

• Car loan, mortgage

• Stocks, inventory, cash

What does the gross profit margin ratio indicate?

• The fall in value of a fixed asset over time

• How much cash a business must pay off all its short-term debts

• The percentage of sales revenue that represents gross profit

• The cost related directly to the product

What is the formula for calculating gross profit?

• Gross profit = Gross profit / Sales revenue X 100

• Gross profit = Total assets - Total liabilities

• Gross profit = Sales revenue - Cost of goods sold

• Gross profit = Current assets / Current liabilities

Who uses the financial accounts of a business to check if correct taxes are paid?

• Shareholders

• Creditors

• Government

• Other companies

What is the purpose of a purchase order?

• To show proof that the firm has paid for their goods

• To pay a stated amount of money to a person or business

• To request for buying products

• To request for payment from the firm

What is the function of a credit note?

• To request for buying products

• To pay a stated amount of money to a person or business

• To issue if a mistake has been made to the invoice

• To show proof that the firm has paid for their goods

What is the purpose of a delivery note?

• To request for buying products

• To pay a stated amount of money to a person or business

• To issue if a mistake has been made to the invoice

• To show proof that the firm has received its goods