-They trade under their name -The business can consist of just the owner or can have more staff working too -
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What are the main features of a partnership?
-A group of individuals who trade together with the intention of making a profit -these can be sole traders that have united or expanded -typically have more employees than sole traders because they are bigger companies
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What are the main features of a limited company?
-most large business' are formed as limited companies -a limited company is where the owners own shares but the business is run by different people -shareholders invest capital by buying shares and receive profits through dividends
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What is limited liability?
If a sole trader or partnership goes bankrupt, then the owners are personally liable for repayments. However, limited companies have limited liabilities because the shareholder doesn't need to repay the bankruptcy once they have paid for their shares
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What is a capital transaction?
A capital transaction is a purchase or sale of an item used in the business over a considerable amount of time. NON CURRENT ASSETS
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What is a revenue transaction?
A revenue transaction is the everyday income and expenses of a business. EG-Sales, purchases of goods for resale, running expenses and wages.
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3 Types of Organisations
Manufacturing Organisations-they make things to sell on to other companies. Retail Organisations-buy goods from manufacturer and sell to customers. Service Organisations-They sell a service, such as accountants.
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How to work out the statement of profit or loss
INCOME MINUS EXPENSES = PROFIT OR LOSS
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How to work out the statement of financial position
ASSETS MINUS LIABILITIES = CAPITAL
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Financial vs Management accounting
Financial is Externally used, Management is internally used
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Three main elements involved in management
-Decision making -Planning -Control
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Other cards in this set
Card 2
Front
-A group of individuals who trade together with the intention of making a profit -these can be sole traders that have united or expanded -typically have more employees than sole traders because they are bigger companies
Back
What are the main features of a partnership?
Card 3
Front
-most large business' are formed as limited companies -a limited company is where the owners own shares but the business is run by different people -shareholders invest capital by buying shares and receive profits through dividends
Back
Card 4
Front
If a sole trader or partnership goes bankrupt, then the owners are personally liable for repayments. However, limited companies have limited liabilities because the shareholder doesn't need to repay the bankruptcy once they have paid for their shares
Back
Card 5
Front
A capital transaction is a purchase or sale of an item used in the business over a considerable amount of time. NON CURRENT ASSETS
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