Extra vocab - what does it mean?
equity
the value of a company divided into many equal parts owned by the shareholders
objectivity
treating facts without influence from personal feelings or prejudices
assumption
a belief accepted as true
to write off
to accept that a debt will not be paid
face value
a nominal value, a worth
voluntary
of your own free will
subjectivity
a personal presentation of events and characters, influenced by the author's feelings and opinions
time-period assumption
the life of a company can be divided into time periods, such as the financial year
to owe money
to have to pay money back
deffered
postponed or delayed
to wear out
to become used and damaged
disclosure
the action of making new information or secret information known
unit-of-measure assumption
states that accounting information should be measured and reported in the national monetary unit
to distribute profits
to legally dispense the profits among the people / shareholders who were contracted to receive it
accrued
accumulated over time
obsolete
out-of-date, no longer in use
straight line method
a depreciation method that allocates an equal amount of depreciation each year
continuity / going concern assumption
states that businesses are assumed to continue to operate into the foreseeable future
to retain earnings
to keep the amount of a company's net income that is left over after it has paid dividends to investors or other distributions
reserve capital
funds set aside from share capitals and earnings, retained for emergencies ot other future needs
subsidiary
a company that is owned by a larger company
accelarated depreciation
a depreciation method in which a capital asset reduces its book value at a faster (accelerated) rate than it would using traditional depreciation methods such as the straight-line method
separate business entity assumption
the records of the business and the personal records of the owner(s) must be kept apart
goodwill
the amount that company pays for another one, in excess of the net value of its assets
share premium
the difference between the nominal (or face value) of the share and the value that the share is sold for