| A | B |
|---|
| current assets | assets that are cash or can be turned into cash such as inventory and accounts receivable within the accounting period |
| non current liabilities | liabilities that are expected to be paid over more than one accounting period |
| equity | assets less liabilities |
| property plant equipment | assets such as buildings, equipment and land |
| drawings | amounts of cash or inventory taken by the owner for personal use |
| liquidity | the ability of a business to pay debts in the next accounting period |
| equity ratio | the proportion of assets financed by the owner of the business |
| intangible asset | assets like goodwill or patents that represent a right and do not have a physical presence |
| carrying amount | the historical cost of an asset less its accumulated depreciation |
| current ratio | this represents the number of current assets to the number of current liabilities |
| liabilities | amounts owed by the business that must be paid back |
| working capital | current assets less current liabilities |
| solvency | the business will continue to operate in the future |
| balance sheet | prepared to show the financial structure of the business |
| prepayment | expenses that have been paid in advance which can be classified as a current asset |
| petty cash | a small amount of cash kept secure for payment of items such as bread, milk, coffee |
| non current assets | assets that will be kept long term in the business and used to generate revenue |
| accumulated depreciation | the total of all depreciation (loss in value) of an asset over its useful life |
| current liabilities | liabilities that must be paid off within one accounting period such as GST, bank overdraft, accounts payable |
| going concern | the term that describes that a business will continue to operate in the future |
