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					     Questions/List 521

     Define each of the following terms in full

     Term
 1   Private limited company
 2   Cash
 3   Issued share capital
 4   Contract costing
 5   Notation
 6   Horizontal format
 7   Source documents
 8   Contribution
 9   Debit card
10   Obsolete




Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
Solutions Questions/List 521

Term
Private limited company




Cash




Issued share capital




Contract costing




Notation




Horizontal format

Source documents




Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Contribution




Debit card




Obsolete




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Definition
Private limited company - a business organisation that is owned
by shareholders who cannot sell their shares without the consent
of the other shareholders.



Cash - notes and coins used to make payments.




Issued share capital - the amount of share capital actually issued to
shareholders.




Contract costing - a costing method that is used to calculate the
cost of contract work.




Notation - the process of a company 'going public', ie selling
shares to the public.




Horizontal format - a method of presenting accounts, side by side.

Source documents - documents issued by businesses in the course
of transactions.




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Contribution - the difference between the revenue earned from
selling a unit of production and the variable cost of production per
unit.



Debit card - a plastic card that is used to transfer money from one
bank account to another.




Obsolete - where an asset is no longer used because of changes in
technology or economic conditions.




Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
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Randomly generated test of accounting terminology
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Term
Marqinal cost
Marginal costing

Sensitivity Analysis

Special order
Activity based costing (ABC)


Batch costing

Contract account

Contract costing
Cost driver
Cost pool
Job costing
Annualised hours


Bonus or incentive scheme

Commission

Fringe benefit

Performance related pay

Piece rate

Profit related pay

Remuneration
Time rate

Budget

Budgetary control




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Cash budget


Master budget
Flexed budget
Sales variance
Standard cost
Standard costing

Variance

Variance analysis

Costs
Direct costs

Fixed costs
Indirect costs

Opportunity cost

Overhead
Prime cost
Semi variable costs (or mixed costs)
Stepped fixed costs


Total costs
Total revenue



Unit cost (or average cost)
Variable costs

Break even chart


Break even point
Contribution
Margin of safety

Management Information System (MIS)
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Absorb
Absorption costing (or full or total costing)

Absorption rate (or recovery rate)

Allocation (or cost allocation)

Apportion (or cost apportion)
Costing
Cost centre
Cost unit

Reapportionment

Accounting rate of return


Discounted cashflow (DCF)

Investment




Investment appraisal
Net present value
Payback



Payback period

Present value


Direct costs

Factory Profit
Indirect Costs
Manufacturing account
Overheads

Prime cost

Transfer Price
Cash
Cashflow statement
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Indirect method (of calculating net cash flow from operating activities)
Asset structure

Gearing or leverage
Acid test ratio
Asset turnover ratio

Creditors payment period
Current ratio


Debt collection period
Dividend cover


Dividend per share
Dividend yield

Earnings per share
EBIT

Gearing ratio
Gross profit margin (or mark-up)

Interest cover

Net profit margin

Price earnings ratio


Ratio analysis

Return on capital employed (ROCE)
Return on equity

Return on net assets

Stock turnover
Window dressing

Social accounting
Social audit
Social responsibility

Capital account

Current account
Fixed capital account
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Fluctuating capital account
Capital structure
Debenture
Finance House

Gearing

Hire Purchase
Lease


Loan capital
Mortgage

Overdraft

Unsecured bank loan

Venture capitalist

Dissolution

Revaluation



Final dividend
Interim dividend
Reserves

Retained profit

Turnover

Working capital

Accumulated fund


Income and expenditure account

Non-profit making organisation

Receipts and payments account
Treasurer

Departmental accounts

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Bank reconciliation statement


Dishonoured cheque




Uncleared lodgements


Unpresented cheques



Input tax (or purchases tax)

Output tax (or sales tax)
Value added tax
Incomplete records
Single entry system

Statement of affairs
Gross profit margin


Mark up
Deed of partnership
Notation
Limited company

Limited liability

Limited partnership
Partnership


Private limited company


Private sector
Public limited company


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Public sector




Sole trader
Unlimited liability

Allotment

Authorised share capital
Bonus issue (or scrip issue)
Capital gain
Issued share capital
Issuing house


Nominal or par value

Ordinary share



Preference share




Rights issue

Stock exchange or stock market
Aged debtors schedule
Bad debt
Credit control
Doubtful debt


Insolvent
Provision
Consumed


Depletion method


Machine hour method

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Net residual value



Obsolete
Reducing balance method

Revaluation
Revaluation method
Straight line method

Sum-of-the-year's digits method (or sum-of-the-digits method)

Units of output method

AVCO (average cost)
Closing stock

Economic order quantity

FIFO (first in, first out)

Just-in-time
LIFO (last in, first out)


Net realisable value (NRV)

Opening stock

Stock (stock-in-trade)

Stocktake
Work-in-progress
Contra entry


Control account


Purchases ledger control account


Sales ledger control account


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Extended trial balance




Appropriation account

Capital employed
Capital structure

Current assets
Current liabilities
Cross profit
Horizontal format
Long term liabilities

Net assets
Net profit
Non-operating income
Sales (or turnover
Stocktake
Trading account
Vertical format
Working capital


Accrual

Accrued expenses

Accrued revenue
Adjustments
Prepaymen
Casting
Misposting
Posting
Transposition
Trial balance


Journal


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Brand name

Current assets (or circulating assets)

Depreciation

Fixed assets

Fixed assets register
Goodwill




Holding company (or parent company)

Intangible assets
Investments (as shown on balance sheets)

Net book value (or written-down value)


Subsidiary

Tangible assets
Accounting concepts (also known as accounting principles or conventions)


Accruals
Historical cost
Inflation
Matching

Money measurement

Objective


Prudence




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Realisation


Subjective
Credit
Debit
Double entry system

Folio
T account

Analysed day book
Credit purchases

Purchases

Purchases day book or purchases journal

Purchases ledge
Purchases ledger control account or total creditors account

Cash book

Cash discount
Cashier

Contra entry

Discounts allowed
Discounts received
Balance
Balance b/d

Balance c/d

Balancing the accounts


Bank giro credit

Cash

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Cheque

Cheque card

Credit card
Debit card
Direct debit


Drawer
Imprest system


Payee
Paying-in slip
Petty cash
Receipt
Standing order

Store card
Till roll

Accounting equation

Assets
Balance sheet

Capital
Drawings

Duality (or dual aspect)

Expenses
Liability
Profit and loss account

Purchases

Revenue
Trade creditors
Trade debtors
Capital expenditure
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Capital income
Fixed assets

Leasing
Revenue expenditure


Revenue income


Cash discount

Credit sales
Nominal ledger or general ledger

Sales day book or sales journal

Sales ledger
Sales ledger control account or total debtors account

Trade discount
Accounting


Auditing
Book
Bookkeeping
Business transaction


Cost accountant
Financial accountant

Loss

Management accountant

Profit

Stakeholders


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Account

Annual Report and Accounts


Balance sheet


Books of prime entry (or books of original entry, or primary accounting records)


Cashflow statement
Ledger
Post

Profit and loss account

Source documents
Acknowledgement or sales order received note


Advice note
Credit transactions


Credit note


Debit note

Delivery note
Goods received note

Invoice

Letter of enquiry
Purchase order form
Quotation

Remittance advice
Statement of account

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Tender
Suspense account




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Defintion
Marqinal cost - the cost of raising output by one extra unit.
Marginal costing - a costing method based on the variable costs of
production, which disregards fixed costs
Sensitivity Analysis - the analysis of changes in sales volume, selling price
and costs on the break-even point and profits.
Special order - an order for goods at below the usual list price.
Activity based costing (ABC) - a costing method that involves charging
overheads to the activities that generate the cost.
Batch costing - a costing method that calculates the cost of producing a
number of identical units for a customer.
Contract account - an account that records the costs of, and revenues from,
a particular contract. It is used to find the cost of work certified.
Contract costing - a costing method that is used to calculate the cost of contract work.
Cost driver - a specific action that results in a cost being incurred.
Cost pool - a range of costs that are linked to a specific activity.
Job costing - a costing method that calculates the cost of meeting a specific customer order.
Annualised hours - a payment system based on a fixed number of hours to
be worked each year, but a flexible number of hours to be worked each
day, week or month.
Bonus or incentive scheme - a payment system in which an extra payment
made in recognition of the contribution a worker has made.
Commission - a payment system that involves paying staff according to the
value of goods or services they sell.
Fringe benefit - a non-monetary form of remuneration, for example a
company car or a subsidised canteen.
Performance related pay - a payment system that links a worker's efforts
and achievements to pay.
Piece rate - a payment system in which employees are paid a set rate for
every unit of output they produce.
Profit related pay - a payment system that involves linking part of a
worker's pay to the profit made by the business.
Remuneration - the pay and other benefits that employees receive from their employer.
Time rate - a payment system in which employees are paid according to
the amount of time they spend at work.
Budget - a financial statement that outlines planned expenditure or revenue
over aluiure tirne~ period.
Budgetary control - a process that involves making financial plans,
calculating the differences or variance between planned values and actual
values, and identifying reasons for the differences.


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Cash budget - a statement that shows the expected cash position of a
business at the end of each month. It records monthly inflows and outflows
of cash.
Master budget - the budgeted (or forecast) profit and loss account and balance sheet.
Flexed budget - a budget that is adjusted according to the level of activity actually achieved
Sales variance - the difference between budgeted and actual sales revenue
Standard cost - a planned or 'target' cost of production.
Standard costing - a system in which standard costs (and revenues) are
compared with those that actually occur.
Variance - the difference between a standard or budgeted cost (or revenue)
and the actual cost (or revenue).
Variance analysis - the process of calculating variances and attempting to
identify their causes.
Costs - the expenses incurred by a business when making or supplying goods and services.
Direct costs - costs that can be associated with the making of a particular
product or linked to a particular process, department or cost centre.
Fixed costs - costs that do not change in the short term when the level of output is changed.
Indirect costs - costs that cannot be attributed to particular products,
processes or cost centres.
Opportunity cost - the benefit lost of the next best option foregone when
making a choice between different alternatives.
Overhead - another term for an indirect cost.
Prime cost - the total of all direct costs.
Semi variable costs (or mixed costs) - costs that have both a fixed and a variable element.
Stepped fixed costs - an increase in fixed costs when a business, for
example, buys a new machine or rents new premises. It often occurs when
a business reaches full capacity.
Total costs - the total costs of production.
Total revenue - the amount of money a business receives from selling its
output found by multiplying price by quantity.


Unit cost (or average cost) - the average cost of producing one unit of output.
Variable costs - costs that vary in proportion to the level of output.

Break even chart - a graph on which sales revenue and costs of production
are plotted. The point at which a business breaks even is shown where the
line of total revenue intersects the line of total costs.
Break even point - the level of sales where total costs and total revenue are
Contribution - the difference between the revenue earned from selling a
Margin of safety - the range of sales between the break-even point and the
current level of sales, over which a profit is made.
Management Information System (MIS) - a system that converts data from
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Absorb - the process of charging overheads to cost units.
Absorption costing (or full or total costing) - a method of costing that
involves charging all overheads to cost units.
Absorption rate (or recovery rate) - the rate at which overheads are charged to cost units.

Allocation (or cost allocation) - the process of charging indirect costs or
overheads that are wholly associated with a particular cost centre to that
Apportion (or cost apportion) - the process by which shared overheads are
Costing - calculating the cost of specific business activities.
Cost centre - a point or area within a business where costs are incurred and recorded.
Cost unit - an item or batch of items that are produced and whose cost of
production is calculated.
Reapportionment - charging the overheads incurred by service cost centres
to production cost centres.
Accounting rate of return - a method of investment appraisal that measures
the average annual profit as a percentage of the average investment over
the life of a project.
Discounted cashflow (DCF) - a technique in which future cash flows are
adjusted to give their present value.
Investment - expenditure on capital goods, fixed assets and items such as
research and development.



Investment appraisal - the evaluation of investment projects to determine
Net present value - a method of investment appraisal that considers all the
Payback - a method of investment appraisal that focuses on the amount of
time it takes to recover the initial cost of an investment.


Payback period - the length of time that it takes to recover the initial cost of an investment.

Present value - the value of a sum of money available in the future,
expressed in terms of what it is worth today.
Direct costs - costs that can be directly attributed to a particular product,
process or department
Factory Profit - the amount added to the production cost of a
Indirect Costs - costs that cannot be directly attributed to a particular
Manufacturing account - a financial statement that sets out the costs
Overheads - costs that cannot be attributed directly to a particular product.

Prime cost - the total of direct materials, direct labour and direct expenses

Transfer Price - the notional price of a manufactured good when it is
Cash - notes, coins and bank deposits repayable on demand. In the context
Cashflow statement - this shows the inflows and outflows of cash in a
Randomly generated test of accounting terminology
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Indirect method (of calculating net cash flow from operating activities) -
Asset structure - the range of assets owned by a business.

Gearing or leverage - the proportion of fixed interest, loan capital to share capital or equity.
Acid test ratio - a liquidity ratio that relates current assets less stocks to current liabilities.
Asset turnover ratio - a measure of asset productivity that relates current,
fixed, total or net assets, or capital employed, to turnover.
Creditors payment period - the average number of days it takes to pay debts.
Current ratio - a liquidity ratio that relates current assets to current liabilities.


Debt collection period - the average number of days it takes to collect debts from customers.
Dividend cover - the number of times the dividend can be paid from the
current year's earnings.

Dividend per share - the amount of money that shareholders receive for each share owned.
Dividend yield - the amount of money received by shareholders expressed
as a percentage of the market share price.
Earnings per share - the amount of money that each share earns.
EBIT - earnings (or profit) before interest and tax.

Gearing ratio - the relationship between the funds provided to a company
Gross profit margin (or mark-up) - the gross profit as a percentage of turnover.

Interest cover - the relationship between interest payments and net profit.

Net profit margin - the net profit as a percentage of turnover.

Price earnings ratio - the current market price of a share divided by the earnings per share.


Ratio analysis - a mathematical technique that examines the relationship
between variables such as turnover, profit and capital employed.
Return on capital employed (ROCE) - the profit of a business expressed as
Return on equity - the profit of a business expressed as a percentage of the
amount of money provided by ordinary shareholders (plus reserves).
Return on net assets - the profit of a business expressed as a percentage of net assets.

Stock turnover - measures how quickly a business uses or sells its stock.
Window dressing - a way of presenting published accounts so that the
financial position of a business appears to be better than it really is.
Social accounting - gathering information and reporting how a business
Social audit - a review and verification of social accounts by an independent bodv.
Social responsibility - a commitment to society in general rather than
purely to the shareholders.
Capital account - see fixed capital account.

Current account - (in the context of balance sheets) an account that
Fixed capital account - an account that records the introduction and
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Fluctuating capital account - an account that records all a partner's
transactions with the business, includingdifferent sources of capital finance in a business!
Capital structure - the balance between capital transactions.
Debenture - a certificate indicating that a loan has been made to a
Finance House - a financial institution which specialises in hire purchase finance.

Gearing - the relationship between funds raised from long term, fixed
interest loans and funds raised from issuing shares. Note that some
Hire Purchase - an agreement in which a purchaser usually makes a down
Lease - a contract in which a business acquires the use of an asset in return
for regular payments.
Loan capital - money borrowed for a lengthy period of time.
Mortgage - a long term loan, often up to 25 years, secured by assets such
as property or land.
Overdraft - a loan in which a business's bank account is allowed to be
overdrawn, usually up to a specified limit.
Unsecured bank loan - money lent by a bank without any security.

Venture capitalist - a provider of funds for small and medium-sized
businesses that might be considered too risky by other investors. Individual
Dissolution - the ending of a business entity. In this context it occurs when
a partnership is dissolved.
Revaluation - the increase, or sometimes decrease, in the value of assets to
reflect the change from their historical value to their current market value.

Final dividend - the dividend paid to shareholders after the end of the financial year.
Interim dividend - a preliminary dividend payment to shareholders during the financial year.
Reserves - part of the capital of a company arising, for example, from
retained profits, the revaluation of assets, or the issue of shares at more
Retained profit - profit held in reserve by a company, as opposed to being
distributed to shareholders.
Turnover - the amount of revenue generated from the sale of goods or services.

Working capital - the value of creditors: amounts falling due within one
year subtracted from current assets. It is a measure of the total of liquid
Accumulated fund - the difference between the value of assets and
liabilities of a non-profit making organisation.
Income and expenditure account - an account, similar to a profit and loss
account, that summarises the annual income and revenue expenditure of a
Non-profit making organisation - a club, society or charity which exists to
provide services to its members or to promote a 'good cause'.
Receipts and payments account - an account that summarises all payments
Treasurer - someone who is elected by members of an organisation to
keep financial records and report the financial affairs.
Departmental accounts - separate accounts for each section of a business.

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Bank reconciliation statement - a financial statement that brings into
agreement the balance in the cash book and the balance on the bank
statement.
Dishonoured cheque - a cheque that is paid into a bank but then returned
unpaid to the ^ payee (ie recipient) generally because there are insufficient
funds in the drawer s de payer s) account.
i
Uncleared lodgements - deposits of cash and cheques that have been
recorded in the cash book and paid into the bank, but not yet processed or
cleared by the bank.
Unpresented cheques - cheques that have been issued by a drawer but not
yet cleared by the bank.


Input tax (or purchases tax) - VAT that is paid when purchasing goods or
services from a VAT registered trader.
Output tax (or sales tax) - VAT that is charged on sales by a VAT registered trader.
Value added tax - an indirect tax levied on spending.
Incomplete records - accounting records from which some details are
Single entry system - a bookkeeping system which involves making one
entry for each business transaction, usually in a cash book.
Statement of affairs - a list of a business's assets and liabilities at a given date.
Gross profit margin - the ratio of gross profit to selling price; in percentage terms it is gross profit as a percentage of


Mark up - the ratio of gross profit to purchase cost; in percentage terms it is gross profit as a percentage of total purc
Deed of partnership - a legally binding document which states the formal rights of partners—
Notation - the process of a company 'going public', ie selling shares to the public.
Limited company - a business organisation which has a separate legal
identity from that of the owners.
Limited liability - a business owner is only liable for the amount of money
invested in the business.
Limited partnership - a partnership in which one or more partners has
Partnership - a business organisation which is usually owned by between
2 and 20 people (except in certain professions such as solicitors and
accounting where there is no upper limit).
Private limited company - a business organisation that is owned by
shareholders who cannot sell their shares without the consent of the other
shareholders.
Private sector - businesses that are owned by individuals or groups of individuals.
Public limited company - a business organisation in which shares can be
bought by members of the public.

Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Public sector - organisations that are owned by the government.




Sole trader - an individual who is the sole owner of a business.
Unlimited liability - the owner of a business is personally liable for all business debts.

Allotment - the distribution of previously unissued shares in a public limited company.

Authorised share capital - the maximum amount of share capital that a
Bonus issue (or scrip issue) - involves giving new shares to existing
Capital gain - the money made by selling a share (or any asset) for more than it cost to buy.
Issued share capital - the amount of share capital actually issued to shareholders.
Issuing house - a financial institution, such as a bank, that advises
businesses and deals with the administration of applications when new
shares are issued.
Nominal or par value - the face value of a share, as opposed to the market
price at which the share trades on the stock market.
Ordinary share - a share in a company that carries the right to a variable
dividend. Ordinary shareholders generally have the right to vote at a
company's Annual General Meeting.
Preference share - a share in a company that carries the right to a fixed
percentage dividend. Preference shareholders generally do not have the
right to vote at a company's Annual General Meeting, but if the company
ceases trading, preference shares are paid out before ordinary shares.
Rights issue - existing shareholders are given the right to buy new shares at
a discounted price.
Stock exchange or stock market - a market where shares are traded.
Aged debtors schedule - a list of credit customers showing the 'age' of their debts.
Bad debt - money owed by a customer that is unlikely to be paid and is
Credit control - the monitoring and collection of customer payments.
Doubtful debt - a debt that might become a bad debt.


Insolvent - when a business is no longer able to meet its debts and is likely to cease trading.
Provision - an amount set aside in the accounts to cover a known liability.
Consumed - (in the context of depreciation) the 'using up' of a fixed asset.


Depletion method - a method of calculating the annual depreciation charge
which is linked to the rate at which a resource is extracted from a wasting
asset, such as a mine.
Machine hour method - a method used to calculate the annual depreciation
charge which is linked to the number of hours a machine is operated.
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Net residual value - the disposal value or scrap value of an asset at the end of its useful life.



Obsolete - where an asset is no longer used because of changes in
Reducing balance method - a method used to calculate the annual
depreciation charge which involves writing off the same percentage rate
Revaluation - an increase in the value of a fixed asset in the balance sheet.
Revaluation method - a method used to calculate the annual depreciation
Straight line method - a method used to calculate the annual depreciation
charge which involves writing off exactly the same amount each year.
Sum-of-the-year's digits method (or sum-of-the-digits method) - a method
used to calculate the annual depreciation charge which involves writing off
Units of output method - a method used to calculate the annual
depreciation charge which is linked to the rate of output for an asset.
AVCO (average cost) - a method of stock valuation that involves
Closing stock - the value of stock held by a business at the end of an accounting period.

Economic order quantity - a system of ordering raw materials and
components so that ordering costs and holding costs are minimised.
FIFO (first in, first out) - a method of stock valuation that involves issuing
stock in the order in which it is delivered, so that remaining stock is valued
Just-in-time - a system of stock control in which raw materials and other
LIFO (last in, first out) - a method of stock valuation that involves issuing
the more recent deliveries first, so that closing stock is valued at older
purchase prices.
Net realisable value (NRV) - the estimated resale value of stock, less any
selling or distribution costs.
Opening stock - the value of stock held by a business at the beginning of
an accounting period.
Stock (stock-in-trade) - raw materials, work-in-progress or finished goods
that are held by businesses. In North America, stock is called inventory.
Stocktake - physically counting the actual amount of stock that a business owns.
Work-in-progress - the value of partly completed products in a business.
Contra entry - a bookkeeping entry used in control accounts to set-off
balances on accounts in the sales and purchases ledgers when a business
buys from, and sells to, the same trader.
Control account - an account that contains totals of entries in a ledger, or
section of a ledger, and which can be used to check the arithmetic accuracy
of the bookkeeping.
Purchases ledger control account - an account that contains the total of
entries in the purchases day book and is used to check the arithmetic
accuracy of the entries in the purchases ledger.
Sales ledger control account - an account that contains the total of entries
in the sales day book and is used to check the arithmetic accuracy of the
entries in the sales ledger.
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Extended trial balance - a document that is used to incorporate the end of
year adjustments ~ into the final accounts. It contains the trial balance,
details of adjustments, entries for the profit and loss account and entries for
the balance sheet.
Appropriation account - the third part of the profit and loss account which
shows what happens to the net profit that is made by a business.
Capital employed - the total of capital in the balance sheet. It is equal to the total of net assets.
Capital structure - the different sources of funds that a business uses. Cost
of sales - the total of purchases made during the year adjusted for stock.
Current assets - resources that are likely to be converted into cash within twelve months.
Current liabilities - money owed by a business that must be repaid within twelve months.
Cross profit - the difference between sales and cost of sales.
Horizontal format - a method of presenting accounts, side by side.
Long term liabilities - money owed by a business but not due for
repayment for at least one year.
Net assets - the total of all assets less all liabilities.
Net profit - the gross profit plus any non-operating income less overhead expenses.
Non-operating income - business income from sources other than normal trading activities.
Sales (or turnover)- the revenue earned by selling goods or services during a trading period.
Stocktake - a process in which the value of stock is determined.
Trading account - that part of the profit and loss account used to calculate gross profit.
Vertical format - a method of presenting accounts, with information listed vertically.
Working capital - the amount of liquid resources that a business owns,
calculated by subtracting current liabilities from current assets. It is
sometimes called net current assets.
Accrual - an estimate of money still owing that is not supported by an
invoice at the time the accounts are prepared.
Accrued expenses - money still owed by a business at the end of the
trading year for resources that have been used.
Accrued revenue - money owed to a business (not for goods sold) at the end of the trading year
Adjustments - changes made to accounts or the trial balance before using them in the final accounts
Prepayment- advance payments or receipts of money.
Casting - another term for adding.
Misposting - entering transactions in the wrong account
Posting - entering transactions in an account.
Transposition - a change in the order or position of numbers
Trial balance - a listing of all the debit balances and credit balances
extracted from the ledgers When each list is added the total debits should
be equal to the total credits.
Journal - the book of prime entry that is used to record details of non-
routine transactions that are not entered in the cash book or other day

Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Brand name - the name given by a business to one or more of its products;
it is classed as an intangible asset.
Current assets (or circulating assets) - resources used by a business that
have a relatively short life span, generally less than one year.
Depreciation - the measure of wearing out, consumption or other
reduction in the useful economic life of a fixed asset.
Fixed assets - resources that are intended for repeated and continued use.
They generally have a life span of at least one year.
Fixed assets register - a detailed list of the fixed assets owned by a business.
Goodwill - the value that is placed on good customer relationships and a
business's reputation for quality and service. It is an intangible asset. In
accounting it is defined as the difference in value between the net assets of
a business and what the whole business could be sold for. In this context,
net assets equal total assets (excluding goodwill) less total liabilities.
Holding company (or parent company) - a company that owns more than
50 per cent of the shares in another company.
Intangible assets - non-physical assets.
Investments (as shown on balance sheets) - financial assets, such as shares,
owned by a business.
Net book value (or written-down value) - the value of an asset shown on a
balance sheet calculated by subtracting depreciation from the historical
cost of the asset.
Subsidiary - a company that is controlled by a holding company because
more than 50 per cent of its shares are owned by the holding company.
Tangible assets - physical assets that can be seen and touched.
Accounting concepts (also known as accounting principles or
conventions) - rules or guidelines that accountants follow when drawing
up accounts
Accruals - an accounting concept that distinguishes between the exchange or goods in one time period and the paym
Historical cost - the cost of an asset when purchased.
Inflation - a general persisten rise in prices in the economy
Matching - an accounting concept that ensure that revenues are associated
with their relevant expenses
Money measurement - an accounting concept which states that all
transactions recorded by businesses should be expressed in money terms.
Objective - (in accounting) the concept that accountants should adopt
standard practices rather than base their work on personal preferences or
their own, ie subjective, opinions.
Prudence - an accounting concept that requires accountants to recognise
revenue or profit only when they are realised


Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Realisation - an accounting concept which states that revenue should be
recognised when the exchange of goods or services takes place. Subjective -
an opinion that is based on personal preference.
Subjective - an opinion that is based on personal preference.
Credit - an entry on the right-hand side of a T account.
Debit - an entry on the left-hand side of a T account.
Double entry system - the method used by bookkeepers when recording
business transactior involves recording all transactions twice.
Folio - a page or reference number listed in an account to help trace the other entry for the ti
T account - a standard layout for recording business transactions with debit
entries on the lei side and credit entries on the right-hand side.
Analysed day book - a day book in which transactions are classified into different categories.
Credit purchases - expenditure on goods with an arrangement to pay for
the goods at a later date.
Purchases - expenditure on goods intended for resale or on materials and
components that are used directly in the production of the finished goods.
Purchases day book or purchases journal - a book of prime entry in which
credit purchases are first recorded. It is also known as the bought day book.
Purchases ledger- the ledger which contains the accounts of suppliers that supply goods on
Purchases ledger control account or total creditors account - an account
in the nominal ledger that shows the total amount owed to suppliers.
Cash book - a book used to record payments and receipts of money. It
combines the cash account and the bank account.
Cash discount - a reduction in price to customers who pay bills promptly. •
Cashier - a person who supervises the receipt and payment of money and
the recording of these transactions.
Contra entry - an entry for the same amount made on opposite sides of the
same book or account.
Discounts allowed - cash discounts given to customers who pay their bills promptly.
Discounts received - cash discounts received from suppliers who reward prompt payment.
Balance - the difference between the total credits and total debits in an account.
Balance b/d - the balance entered under the total on the opposite side of
the account to the balance c/d, at the start of a new time period in the
Balance c/d - the balance entered on the side of the account with the
lowest total to ensure it equals the greater total.
Balancing the accounts - the process of working out the balance between
debits and credits and entering the balance c/d and the balance b/d. The
process is also known as balancing off.
Bank giro credit - a system of payment which allows a payer to pay money
directly into a payee's bank account.
Cash - notes and coins used to make payments.

Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Cheque - a document that instructs a bank to transfer money from one
bank account to another.
Cheque card - a plastic card that acts as a guarantee that a cheque will be
honoured by a bank provided certain conditions are met.
Credit card - a plastic card that allows a buyer to obtain goods on credit.
Debit card - a plastic card that is used to transfer money from one bank account to another.
Direct debit - an electronic method of transferring money from one bank
account to another where the responsibility for administering the transfer
lies with the payee.
Drawer - the person or business making a payment by cheque.
Imprest system - a method of operating petty cash that involves starting
with the same amount of money, the imprest amount, in the cash box every
week or other set period.
Payee - the person or business receiving a payment by cheque.
Paying-in slip - a document that records the amount being paid into a bank account.
Petty cash - notes and coins used by businesses to make small cash payments.
Receipt - a document which confirms that payment has been made by a customer.
Standing order - an electronic method of transferring a set amount of
money at regular intervals from one account to another.
Store card - a credit or debit card for use in a particular shop or chain of shops.
Till roll - a document that records sales on a till or cash register. Generally
it is a copy of the receipts that have been issued.
Accounting equation - the relationship between a business's assets, capital
and liabilities which states that Assets = Capital + Liabilities.
Assets - resources that are used by a business.
Balance sheet - a statement that shows the assets, capital and liabilities of
a business on a particular date.
Capital - the money provided by owners to set up and run a business.
Drawings - money taken from the business by the owner for personal use.
It has the effect of reducing capital.
Duality (or dual aspect) - the idea that a transaction has two effects on the
accounting equation.
Expenses - payments for resources that businesses use when producing goods and services.
Liability - money owed by a business or individual. .
Profit and loss account - a statement of the profit (or loss) made by a
business over a period of time.
Purchases - goods that are bought for resale, or raw materials and
components that are made into goods for sale.
Revenue - money received by a business for selling its output.
Trade creditors - suppliers who are owed money by a business (classed as a liability).
Trade debtors - money owed to a business by customers (classed as an asset).
Capital expenditure - expenditure on the purchase, alteration or improvement of fixed assets.
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Capital income - money received from the sale of fixed assets.
Fixed assets - those assets of a business that are intended for long-term,
continuing use. They are not intended for resale.
Leasing - the hiring of fixed assets for a period of time.
Revenue expenditure - money spent on the running expenses of a business
including expenditure, on resources that will generally be used up in less
than one year.
Revenue income - money received from the sale of goods and services by a
business and also any income from other sources, such as interest payments
but excluding the sale of fixed assets.
Cash discount - a price reduction given to customers who pay before the
end of the trade credit period.
Credit sales - sales in which payment is made at an agreed later date.
Nominal ledger or general ledger - a ledger which contains all impersonal
accounts, ie those that are neither customer or supplier accounts.
Sales day book or sales journal - a book of prime entry in which credit
sales are entered. It is sometimes also called the sold day book.
Sales ledger - a ledger which contains customer accounts and is used to record credit sales.
Sales ledger control account or total debtors account - an account in the
nominal ledger that shows the total amount owed by customers.
Trade discount - a reduction in the list price of goods, generally given to trade customers.
Accounting - a process that involves recording, classifying and
summarising business transactions to generate useful financial information
that can be communicated to a range of users.
Auditing - checking by accountants that the accounts produced by a business are 'true and fair'.
Book - a financial record of transactions.
Bookkeeping - the process of recording all the details of business transactions.
Business transaction - an event that affects the finances of a business, for
example the purchase of resources from suppliers and the sale of products
to customers.
Cost accountant - a specialist that calculates the cost of specific business activities.
Financial accountant - an accountant involved in the preparation of final
accounts from bookkeeping records.
Loss - the amount by which business costs are greater than sales revenue in
a given trading period.
Management accountant - an accountant involved in the preparation of
financial reports, statements and other data for use in decision making.
Profit - the amount of business income left over after all business costs
have been met for a trading period.
Stakeholders - the individuals and organisations that have an interest in the
accounts of a particular business.

Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Account - details of transactions that are similar in type, such as those in
connection with a named supplier.
Annual Report and Accounts - a formal company report containing
financial and other performance information that is produced for the
owners of the business once a year.
Balance sheet - a statement showing the value of resources, sources of
finance and financial circumstances of a business. It represents a 'snapshot'
of the business's affairs at a particular moment in time.
Books of prime entry (or books of original entry, or primary accounting
records) - the books in which details from source documents are first
recorded.
Cashflow statement - a statement showing the sources and uses of cash for a trading period.
Ledger - a collection of accounts of a similar type.
Post - a term used to describe the transfer of information from the books of
prime entry to the ledgers.
Profit and loss account - a summary of business income and expenditure
used to calculate the profit (or loss) made in an accounting period.
Source documents - documents issued by businesses in the course of transactions.
Acknowledgement or sales order received note - a response from a
supplier stating that a customer order has been received and is being dealt
with.
Advice note - a document from a supplier saying when goods are to be delivered.
Credit transactions - the exchange of goods where payment is deferred, ie
where payment is made several weeks or months after goods have been
bought.
Credit note - a document used to confirm that a customer has been
overcharged, stating the allowance due to the customer and the reason for
the overcharging.
Debit note - a document used to notify a customer of an undercharging
stating the amount outstanding and the reason for the undercharging.
Delivery note - a document that describes the goods that have been delivered by a supplier.
Goods received note - normally a copy of a delivery note that has been
signed to confirm that the correct goods have been delivered.
Invoice - a document that tells a customer how much is owed for goods
that have been purchased.
Letter of enquiry - a letter sent to a supplier to investigate what the supplier has to offer.
Purchase order form - a document requesting specified goods to be sent.
Quotation - a response to a letter of enquiry from a supplier quoting the
price and other details of goods and services on offer.
Remittance advice - a document showing how much a purchaser is paying a supplier.
Statement of account - a document sent to a customer showing a summary
of recent transactions and the total amount owing.
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Tender - an offer to supply specified goods or services at a particular price.
Suspense account - a temporary account used to post the difference in the
trial balance caused by errors in the bookkeeping system.




Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
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Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
gross profit as a percentage of sales turnover


it as a percentage of total purchases




            Randomly generated test of accounting terminology
            Duncan Williamson 5/17/2012
            www.duncanwil.co.uk
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
Randomly generated test of accounting terminology
Duncan Williamson 5/17/2012
www.duncanwil.co.uk
nal accounts




          Randomly generated test of accounting terminology
          Duncan Williamson 5/17/2012
          www.duncanwil.co.uk
one time period and the payment for those goods in another




           Randomly generated test of accounting terminology
           Duncan Williamson 5/17/2012
           www.duncanwil.co.uk

				
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