SQE 2
Business Accounts Revision
FINANCE
Financial Records, Information & Accounting
Requirements
Key Word Explanation
Bookkeeping The recording of all financial transactions in a business.
Double Entry Every money transaction has a dual effect in a business account.
Bookkeeping
Credit Entry figure, a payment in.
Debit Entry figure, a payment out.
Ledgers A record of a business’ financial transactions and summarise all revenues and
(Accounts/Books) expenses of the business.
A Asset Something owned.
Fixed/Non-Current Long-term asset used to generate a profit .
Asset
Current Asset Short term asset which can quickly be turned into
cash .
L Liability Something owed.
Current Liability Due to be paid within 1 year.
Long-Term Liability Due to be paid after 1 year.
C Capital Injection of value by investor.
I Income Money earned by business.
E Expenditure Money spent by business.
Daily spending on short term assets
Capital Expenditure: Spending on long-term assets ©️
Trial Balance A list of all ledger balances at period end, shows and
The totals must match.
Profit and Loss Income expenses profit/loss (over the accounting period, usually 1
Account/Income year).
Statement Year-end financial statement.
Accounting Period Cannot be longer than 12 months, normally the same as the financial year.
Financial Year Default is April 6th to April 5th following year (can be changed).
Business Accounts Revision
FINANCE
Financial Records, Information & Accounting
Requirements
Key Word Explanation
Bookkeeping The recording of all financial transactions in a business.
Double Entry Every money transaction has a dual effect in a business account.
Bookkeeping
Credit Entry figure, a payment in.
Debit Entry figure, a payment out.
Ledgers A record of a business’ financial transactions and summarise all revenues and
(Accounts/Books) expenses of the business.
A Asset Something owned.
Fixed/Non-Current Long-term asset used to generate a profit .
Asset
Current Asset Short term asset which can quickly be turned into
cash .
L Liability Something owed.
Current Liability Due to be paid within 1 year.
Long-Term Liability Due to be paid after 1 year.
C Capital Injection of value by investor.
I Income Money earned by business.
E Expenditure Money spent by business.
Daily spending on short term assets
Capital Expenditure: Spending on long-term assets ©️
Trial Balance A list of all ledger balances at period end, shows and
The totals must match.
Profit and Loss Income expenses profit/loss (over the accounting period, usually 1
Account/Income year).
Statement Year-end financial statement.
Accounting Period Cannot be longer than 12 months, normally the same as the financial year.
Financial Year Default is April 6th to April 5th following year (can be changed).
