Liability:-
Liabilities
are claims against assets by the bodies outside of the business. Examples of
liabilities are:
•
Loans from banks
•
Creditors
•
Bank overdrafts e.t.c
Tuesday, December 9, 2014
What is Asset
Asset:-
Assets
are tangible and intangible items that have value in exchange which the
business owns.
Examples
of assets are:
- Cash
- Buildings
- Machinery
- Furniture
- Debtors (money owed from customers)
- Stock / Inventory e.t.c
What is Capital Expenditure
Capital Expenditure:-
Capital Expenditure is
an expenditure which is capitalized as occurred. It has further utility so it
is capitalized in the Balance Sheet.
For Example purchase of
Fixed Assets.
What is Revenue Expenditure
Revenue Expenditure:-
Revenue Expenditure is
an expenditure which is expend as occurred. It has no further utility so it
is expend in the income statement.
For example Salary,
Utility expenses, Rent Payments e.t.c
What is Finance Costs
Finance Costs: Finance costs are those costs
associated with providing the permanent, long term and short term
finance. That is, within the section headed finance costs we will find
dividends, interest on long term loans and interest on short term loans e.t.c.
What is Fixed Asset
Fixed Asset:-
Fixed Assets are long
term assets with a maturity of more than one year.
Examples are
- Equipments
- Furniture s
- Fixtures
- Machinery
- Goodwill
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