| A | B |
|---|
| banks | User of accounts who wants to know the firms current level of debt and their ability to repay their loans or bills |
| sources of finance | Bank loan, government grant and borrowing money from friends are all ? |
| transaction | An agreement between two parties to exchange goods or services for payment |
| debtors | Term that describes people who owe you money |
| creditors | Term that describes people you owe money to |
| assets | Term that describes things that you own |
| liabilities | Term that describes things that you owe |
| current asset | An asset that changes in value on a daily basis eg bank account, stock, debtor |
| current liability | A liability that changes in value on a daily basis eg creditors, bank overdraft |
| balance sheet | This document reports on the firms assets and liabilities at a particular point in time |
| owners equity | Name given to the money an owner invests into the business |
| accounting equation | Assets = Liabilities + OwnersEquity |
| owners equity | Assets = Liabilities + ? |
| profit | when income is greater than expenses |
| loss | when expenses are greater than income |
| break-even | when expenses is equal to income – no profits, no losses |
| balance sheet | This document details the firm’s financial position at a particular point in time by listing its assets and liabilities and the owner’s equity |
