Glossary
Accounting cycle: describes the process of recording financial transactions from the time the transaction occurred to the time it appears in the financial statement
Accounting equation: Assets = owner’s equity + liability
Accounting period: the financial year – the period for which a firm prepares its internal or external accounts; the period covered by the financial statements.
Assets: everything that belongs to a business, such as money in the bank, a cash register, a car and so on
Bank charges: the money a financial institution makes you pay for managing your money
Budget: a plan of how much money you have and how you spend it – an estimate of future income and expenses
Credit card: a bank card that allows you to pay for something on credit
Current assets: trading inventory, bank account, petty cash, debtors control, fixed deposit
Current bank account: a cheque account
Electronic banking: the use of electronic means to transfer funds directly from one bank account to another
Epidemic: a sudden, widespread occurrence of a disease or illness in a community at a particular time. Health epidemics can cause hardship and financial loss for individuals or businesses. Examples are TB, cholera, certain strains of influenza
Expenses: money you spend to buy in goods and services provided by someone else
Financial institution: a place whose main function is to keep other people’s money safe
Fixed assets: land, buildings, vehicles and equipment Goods: products that you can see or touch, such as bread, milk, clothing items
Income: the money you receive for selling goods, your time, providing services or investing money
Liabilities: debts that a business or individual has to pay Non-renewable resources: resources that cannot be replaced Operating expenses: expenses paid out to run a business
Overhead costs: business expenses such as rent that are not directly attributable to any department or product
Personal budget: drawn up by individuals and households to help them plan and control income and expenditure
Personal income: salary, wages, commission Primary sector: sector of the economy that produces raw materials
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