Business Studies Chapter 22 - Income Statements : Definitions

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  • Created by: Asumi
  • Created on: 01-02-20 08:49
Accounts
Financial records of a firm's transactions.
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Accountants
Professionally qualified people who have responsibility for keeping accurate accounts and producing the final accounts.
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Final Accounts
Produced at the end of the financial year and give details of the profit or loss made over the year and the worth of the business.
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Income Statements
A financial statement that records the income of a business and all costs incurred to earn that time income over a period of time. It is also known as a profit or loss account.
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Revenue
The income of a business during a period of time from the sales of goods or services.
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Cost of sales
Cost of producing or buying in the goods actually sold by the business during a period of time.
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Gross profit
Made when revenue is greater than the cost of sales.
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Trading Account
Show how the gross profit of a business is calculated.
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Net profit
The profit made by a business after all costs have been deducted from revenue. It is calculated by subtracting overhead costs from gross profits.
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Depreciation
The fall in the value of a fixed asset over time.
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Retained profit
The net profit reinvested back into a company, after deducting tax and payments to owners, such as dividends.
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Gross Profit Formula
Gross Profit = Revenue - Cost of sales
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Net Profit Formula
Net Profit = Gross Profit - Expenses
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Profit Formula
Revenue - Cost of making products
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Other cards in this set

Card 2

Front

Professionally qualified people who have responsibility for keeping accurate accounts and producing the final accounts.

Back

Accountants

Card 3

Front

Produced at the end of the financial year and give details of the profit or loss made over the year and the worth of the business.

Back

Preview of the back of card 3

Card 4

Front

A financial statement that records the income of a business and all costs incurred to earn that time income over a period of time. It is also known as a profit or loss account.

Back

Preview of the back of card 4

Card 5

Front

The income of a business during a period of time from the sales of goods or services.

Back

Preview of the back of card 5
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