Edexcel A-Level Accounting unit 3:
finance and accounts 2024 Exam Quiz
Study Guide
profit and loss account - Answer>>also known as income
statement, a financial statement showing revenue and expenses
of a business at the ebd if a specificied accounting period
balance sheet - Answer>>A financial statement that reports the
value of assets and liabilities of a business at a particular point in
time
purpose of final accounts to internal stakeholders -
Answer>>shareholders: return on investment
employees: pay raise, job security
manager: operational efficiency, target setting
competitiors: compare financial performance
government: taxes, job security
financiers: pay back
suppliers: determine trade credit
potential investors: financially worthwhile
dividends - Answer>>earnings distributed to stockholders
limitations of P&L account - Answer>>-historical financial
performance
-no standard format
-window dressing
asset - Answer>>Items of monetary value that are owned by a
business
, current assets - Answer>>Assets that companies expect to
convert to cash or use up within one year
-cash
-debtors
-stocks
non current assets - Answer>>Items that a business owns and
which it expects to retain for one year or longer
-machinery, equipment
-accumulated depreciation
Current Liabilities - Answer>>debts of the business that must be
paid within a year
-ST loans
-trade credit
-bank overdraft
non current liabilities - Answer>>Long-term debts owed by the
business
-LT loans
-borrowings
net assets - Answer>>total assents-total liabilities
equity - Answer>>retained earnings + share capital
limitations of balance sheet - Answer>>-only estimated values
-no standard format
-not all assets inluded in balance sheet
intangible assets - Answer>>non physical non current assets
that have the ability to earn revenue
-branding
-patents
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