ACCA Accounting Glossary Questions With Complete Solutions

Float correct answer: In the petty cash box there will normally be a small amount of cash available to make payments, this is called a float. Gains correct answer: This is non-standard income for the business. Their trade may be in selling clothing, but occasionally they may sell an asset, such as a van or piece of equipment, and it will give rise to a gain. This is gains income, and may also be called a profit on sale of a non-current asset. General ledger correct answer: a ledger containing the asset, liability, capital, expense and income accounts of a business. For example: • Receivables account • Payables account • Sales tax account • Advertising account • Assets account • Revenue account • Liabilities account Good(s) correct answer: These are the items which the business sells. For example in a clothing business the goods will be the clothing and accessories that they hold in inventory. The alternative would be services - a firm of accountants provides accounting services. Goods received note (GRN) correct answer: This is an internal document that the customer would complete as an extra check that everything has been received that was ordered. Gross (figure) correct answer: the term used to describe sales or purchase prices that are inclusive of sales tax. Gross pay correct answer: the amount of money earned before tax and other deductions are made. Human resources department correct answer: This department deals with employee issues, such as payroll, recruitment and so on. Imprest petty cash system correct answer: This is where the petty cash fund is a set amount of money, and is regularly replenished to the original value at the beginning of each week or month. Income correct answer: economic benefit received by a business either in the form of cash or assets. Input tax correct answer: sales tax payable on a purchase of goods or services. Insolvency correct answer: When a business (or individual) does not have sufficient funds to repay its debts on time. Inventory correct answer: the value of the goods that a business holds at a point of time for sale to its customers. They may be finished goods, work in progress or raw materials.