Business Ch.7
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Created by:
camel_toast on April 3, 2010
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25 terms
Terms | Definitions |
|---|---|
 accounts | the financial records of a firm's transactions |
| purchase orders | requests for goods/materials sent to suppliers. |
| delivery notes | are used by the suppliers to confirm that the goods have been received. |
| invoices | are sent by the suppliers to the customers as a request for payment for the goods delivered. |
| credit notes | are only issued if a mistake has been made |
| statements of account | record the total value of deliveries made, credit notes issued and payments made by the customer |
| Remittance advice slips | indicate which invoice is being paid |
| Receipts | ensure that the supplier doesnt charge for the same amount again. |
| trading account | shows how the gross profit of a business is calculated |
| sales revenue | the income to a business during a period of time from the sale of goods or services |
| gross profit | TR-VC |
| net profit | the profit made by a business after all costs have been deducted from the sales revenue. GROSS PROFIT-OVERHEAD COSTS |
| profit and loss account | records the income and expenses of a business and the profit or loss it makes over a period of time |
| depreciation | is the fall in the value of a fixed asset over time |
| retained profit | is the net profit re-invested in the company (after deducting tax and dividends) |
| assets | items of value owned by the business |
| liabilities | items of value owed by the business |
| working capital | current assets-current liabilities |
| net assets | fixed assets + working capital |
| liquidity | the ability of a business to pay back its short-term debts |
| return on capital employed % | operating profit/capital employed x 100 |
| gross profit margin % | gross profit/sales turnover x 100 |
| net profit margin % | net profit before tax/sales turnover x 100 |
| current ratio | current assets/current liabilities |
| acid test or liquidity ratio | current assets-stock/current liabilities |
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