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Define the terms used in a trading and profit and loss account and balance sheet.

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Transfer-Encoding: chunked A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity Assets – things they own Liabilities – things they owe (suppliers, loans/overdraft, and mortgage) Trading profit and loss word meaning Trading profit and loss statement - A trading, profit and loss account shows the business's financial performance over a given time period. 1. Turnover - the amount of money taken by a business in a particular period, for instance Abscon Ltd have a turnover of £1500,000 in 20014 and £1300,000 in 2013 2. Cost of sales - on an income statement, the cost of purchasing raw materials and manufacturing finished products, there cost of sales in 2014 totalled to £860,000 3. Opening stock – stock of an item at the beginning of the financial year, at 2014 they had £100,000 of opening stock 4. Purchases - To obtain in exchange for money or its equivalent; buy. 5. Closing stock – a business’s remaining stock at the end of the financial year. ...read more.


This measure deducts all expenses from revenue including interest expenses and operating expenses, but it leaves out the payment of tax. 13. Corporation tax - tax imposed on companies' profits 14. Profit after tax ? The net amount earned by a business after all taxation related expenses have been deducted 15. Dividend - a sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves). 16. Retained profit - Retained profit is the profit kept in the company rather than paid out to shareholders as a dividend. Retained profit is widely regarded as the most important long-term source of finance for a business. Balance Sheet Balance sheet - A balance sheet shows the value of a business on a particular date. A balance sheet shows what the business owns and owes for the last day of the financial year. 1. Fixed asset ? an assets which is not consumed or sold over the course of the business, such as premises and fixtures and fittings. ...read more.


twelve months, but that instead need to be repaid in a year or more such as mortgage and capital employed Mortgage ? a legal agreement by which a bank lends money at interest in exchange for taking title of a property Employment of capital - The total amount of share capital and debt that a company has and uses Shareholders - somebody who owns a share in a business Share capital - part of the capital of a company that comes from the issue of shares Profit and loss account - A trading, profit and loss account shows the business's financial performance over a given time period. 1. Capital employed ? Fixed assets plus current assets minus current liabilities. Capital employed is the value of the assets that contribute to a company's ability to generate revenue 1. http://www.bing.com/search?q=meaning+of+turnover+&qs=n&form=QBRE&pq=meaning+of+turnover+&sc=2-20&sp=-1&sk=&cvid=45d240a4408749fc96c1db0c027bdb41&adlt=strict 2. http://www.investorwords.com/5484/cost_of_sales.html 3. http://www.businessdictionary.com/definition/opening-stock.html 4. http://www.thefreedictionary.com/purchase 5. http://www.investorwords.com/9203/closing_stock.html 6. http://www.businessdictionary.com/definition/gross-profit.html 7. http://www.businessdictionary.com/definition/expense.html 8. http://www.bing.com/search?q=meaning+of+wages&src=IE-TopResult&FORM=IE11TR&conversationid=&adlt=strict 9. http://www.bing.com/search?q=meaning+of+Salaries&qs=n&form=QBRE&pq=meaning+of+salaries&sc=0-16&sp=-1&sk=&cvid=d32f2c49eb2f4cb7ae59a87c568ffce4&adlt=strict 10. http://www.bing.com/search?q=meaning+of+Operating+profit+&qs=n&form=QBRE&pq=meaning+of+operating+profit+&sc=2-20&sp=-1&sk=&cvid=3fe9e8d95c834801a08eb388b4439c48&adlt=strict 11. http://www.investorwords.com/19143/net_interest_expense.html 12. http://www.investopedia.com/terms/p/profitbeforetax.asp 13. http://www.bing.com/search?q=meaning+of+corporation+tax&qs=n&form=QBRE&pq=meaning+of+corporation+tax&sc=0-20&sp=-1&sk=&cvid=5c072b9683ec43be9f8c29f4b6415612&adlt=strict 14. http://www.businessdictionary.com/definition/profit-after-tax.html 15. http://www.bing.com/search?q=meaning+of+dividend&qs=n&form=QBRE&pq=meaning+of+dividend&sc=1-18&sp=-1&sk=&cvid=9c7233331b824c3b927f89fb9556ca95&adlt=strict 16. http://www.tutor2u.net/blog/index.php/business-studies/comments/qa-what-are-retained-profits/ 17. http://www.businessdictionary.com/definition/fixed-asset.html 18. encyclo.co.uk 19. www.investopedia.com 20. www.thedreedictionary.com 21. http://www.bing.com/search?q=Bank+acount+meaning+&qs=n&form=QBRE&pq=bank+acount+meaning+&sc=0-13&sp=-1&sk=&cvid=2e48779b75fd496da303df6093ab2e7a&adlt=strict 22. http://www.bing.com/search?q=current+liabilities+definition&qs=AS&pq=current+liabilities+&sc=8-20&sp=1&cvid=a3008926bc1d43e3ae9dbc4bc70c25fd&FORM=QBRE&adlt=strict 23. http://www.bing.com/search?q=Creditors+definition&qs=n&form=QBRE&pq=creditors+definition&sc=2-20&sp=-1&sk=&cvid=88ffede09b214dd2b63b516631f544ff&adlt=strict 24. http://www.investorwords.com/6857/long_term_liabilities.html 25. http://www.investorwords.com/5440/capital_employed.html ...read more.

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