Accounting Definitions

What is 'Capital' in a business context?

• Money spent on advertisements

• Money paid to employees

• Money that the owner uses to start the business

• Money earned by the business

What are 'Drawings'?

• Money earned by providing a service

• Money received from trading stock

• Money paid for repairs

• Money taken by the owner for personal use

What does 'Income' refer to?

• Money owed to creditors

• Money invested in equipment

• Money earned by the business

• Money spent on expenses

What is 'Sales'?

• Money received from renting out property

• Money spent on packaging materials

• Money paid for salaries

• Money received from trading stock sold

What is 'Net Profit'?

• Total income minus total expenses

• Total sales minus cost of sales

• Total capital minus drawings

• Total income plus total expenses

What is a 'Liability'?

• Money invested in equipment

• Money earned from services

• Money owed to someone outside the business

• Money received from sales

What does 'Overdraft' mean?

• Money owed to suppliers

• Money in a checking account

• Money owed to the bank

• Money received from interest

What is a 'Transaction'?

• A record of expenses

• Any activity involving money or items of value

• A type of asset

• A form of income

What is 'Interest on Overdraft'?

• Interest paid to the bank for negative balance

• Interest paid on loans

• Interest earned on savings

• Interest received from the bank

What are 'Expenses'?

• Money that is spent and cannot be recovered

• Money that is earned by the business

• Money received from sales

• Money invested in capital