FRK 122 EXAM TERMINOLOGY 2019 Accumulated Depreciation Amortisation Asset Realisation Deprecation Impairment Losses Intangible Non-Current Assets Tangible non-current assets Cost of Sales Cost Price Gross profit Inventory Net Realisable Value Physical Stock Taking Sales Direct Costs Indirect Costs Primary Costs Manufacturing Overheads Manufacturing Costs Statement of Profit or Loss and Other Comprehensive Income Statement of Changes in Equity Statement of Financial Position The total of the depreciation provided for an asset over the useful life of the asset The systematic allocation of an intangible assets historical cost over the estimated useful life of the asset The scaping, trading in or selling of an asset The systematic allocation of the depreciable amount of a tangible non-current asset as an expense over the estimated useful life of the asset, to be realised with the income it helped earn A decrease in estimate devalue of an asset. The value of any non-current asset can be adjusted with an impairment loss. It is not the same as depreciation Without physical substance These assets will not be converted into cash within the next financial year Assets that one can experience through natural senses. The intention is to use those assets for longer than the next 12 months Cost price of all goods that were sold The purchase price plus any other costs incurred to get the inventory at a place and in a condition so that it is ready for use The difference between the cost price and selling price of the sold good The part of assets that the entity purchased for resale The estimated selling price which can be realised in the normal run of business, less the estimated cost which will be incurred to be able to sell the product Physical counting of inventory Selling price of an item = cost of item + profit on item Raw materials, labour and other costs directly used in the production of a product All costs not directly related to the production of a specific product Direct raw material costs and direct labour costs and any other direct costs. Indirect costs, all costs that are not directly related to the production of a specific product Direct costs plus indirect costs Reports on the financial performance of an entity over a reporting period, usually a financial year Reconciliation between the equity at the beginning and at the end of a reporting period Reports on the financial position if an entity at any given point in time Compiled by Steezy K Notes to the Financial Statements Provide users of financial statements with better insight into how certain items that appear in the financial statements, were determined and calculated Liquidity The availability of liquid assets (assets that are easily converted into cash) to an entity The ability of an entity to yield profits and is a measure of efficiency The ability of an entity to pay the debt of the entity from realising its assets. An entity will be seen as insolvent if the liabilities exceed the assets of the entity. Profitability Solvency Disposal E-filling Estate Duties Exempt Income Income Tax PAYE Provisional Tax Remuneration SARS Supporting documentation Tax Return Total Income Value Added Tax Selling an item or scrapping it for accounting purposes Electronic submission of tax returns Tax levied on estates Income that is not taxable Tax Payable on income earned Pay-as-you-earn, income tax deducted by the employer from an employee’s remuneration Income tax payable every six months Payment for services rendered South African Revenue Services Documents to prove income and expenses Forms for submission to SARS, contain details of tax All inclusive Indirect tax levied on goods and services, payable by the final consumer Cash Flows from Financial Activities Represents the cash effect of transactions which have an influence on the equity and non-current liabilities. These are transactions which flow from the financing of the entity Cash Flows from Investment Purchase price and disposal return of non-current assets not included in cash equivalents Non-Cash Items Entries which do not represent any flow of cash are regularly recorded in the financial records of an entity Cash Flow from Operating Activities The transformation of the profit for the year (calculated by using the accrual principle) to real cash flows Operating Capital The entities current assets less current liabilities Personal Budget Budget Budget Periods Capital Budgeting A finance plan that allocates future personal income towards expected expenses, savings and debt repayments A document containing financial information used to project future economic activities of an entity The most common budgeting period is a year corresponding to an entities fiscal tax year Planning process used to determine whether an entities long term investment is worth pursuing Compiled by Steezy K Cash Budget Debtors Collection Schedule Fixed/Static Budget Flexible Budgeting Master Budget Zero Based Budgeting Credit Management Management Credit Facility Creditworthiness Credit Policy Contractual Capacity National Credit Regulator Credit Bureau The objective is to ensure there is enough cash available at al times to meet levels of operations outlined in various operational budgets in the master budget The expected collection of debtor’s accounts Budget that is prepared for one level of activity and does not change when the level of activity changes Actual costs for the actual activity should always be compared with budgeted costs for the actual activity By preparing and integrating several operational budgets to form an integrated business plan Starts from a zero base and every function within an entity is analysed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous year Credit is a medium of exchange that makes it possible to get goods, services or money in the present based on a promise to pay for it in the future Planning, leading, organising and controlling of activities in such a way that the entity will reach its objectives Agreement where the supplier (credit provider) undertakes to supply goods or services or payment of an amount to a consumer and where repayments is deferred and a charge, fee or interest is payable to the credit provider Indication of a buyer’s willingness and ability to fulfil his promise to pay in the future Guideline for an entity to make decisions about the extension of credit and the collection of debtors The capacity that the law grants persons to perform legal acts such as signing a lease, buying a car or making a will A juristic person who will promote and developed a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry to serve historically disadvantaged persons and communities, low income persons and communities and remote, isolated or low-density populations and communities Collects information, stores it and sells it to entities. A credit bureau provides information about the credit history of consumers and business entities Compiled by Steezy K
