Glossary Accounting Business UK - Glossario Contabilità UK
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There is often a day book for different types of transaction, e.g. a sales day book and a purchase day book.
Interest will be paid to the holder, the rate of interest being shown on the certificate.
They are not always called debentures; they are often known as loan stock or as loan capital.
Debenture interest has to be paid whether profits are made or not.
They are therefore different from shares where dividends depend on profits being made.
A debenture may be either
The opposite of a debit is a credit.
Debit is abbreviated Dr while credit is abbreviated Cr.
A debit can be either a positive or negative entry to an account depending on what type of account is being debited.
Asset and expense accounts increase in value when debited, whereas liability, capital, and revenue accounts decrease in value when debited.
Debit cards are usually combined with other facilities such as ATM and cheque guarantee card functions.
People or organisations often enter into agreements to borrow something.
Both parties must agree on some standard of deferred payment. Usually a sum of money is denominated as the unit of currency, but sometimes a like good.
For example, shares might be borrowed and then repaid later with the shares plus a premium for borrowing, or the sum of money required to buy them in the market at that time.
There are numerous types of debt obligations.
They include loans, bonds, mortgages, promisary notes, and debentures.
Deferred taxation accounting adjusts the differences so that the accounts are not misleading.
This involves dividing the value of the asset into instalments to each accounting period of its useful life.
Depreciation involves estimates of life and residual values.
It is common that an asset will be worth less at the end of its life expectancy than when the business first started using it, so in affect, it has cost the business money.
If it has cost the business money, then it must be an expense and will therefore affect the profit and loss.
The asset is also expected to be worth less, and thus also affect the balance sheet.
There are various methods of depreciation, Straight Line and Reducing Balance:
This means it will be worth £6,000 less in 5 years time and the £6,000 will be a cost to the business and therefore needs to be apportioned to the depreciation expense account. £6,000 divided by 60 months = £100 depreciation cost per month.
To account for this the business would set up a depreciation account as an expense account.
A debit of £100 would be made to this account monthly and a credit would go to the vehicle account reducing the value of the asset each month.
Using this method the value left in the vehicle account by the end of 5 years would be £4000.
The asset is not reduced by the same fixed amount each year but instead by a fixed percentage, which is calculated on the asset balance at the end of each year once depreciation has been applied.
For example, let’s assume that a veehicle will depreciate by 20% every year over the life of 5 years:
As you can see, the depreciation for year 1 has been calculated as 20% of £10,000, but in year 2 the depreciation has been calculated as 20% of the reduced balance which is £8,000 - £1,600 depreciation in year 2 which differs from the depreciation amount in year 1.
The Direct Debit Scheme also protects you and your money by means of the Direct Debit Guarantee.
All banks and building societies that take part in the Direct Debit Scheme operate this Guarantee.
The efficiency and security of the Scheme is monitored and protected by your own bank or building society.
For example, the wages of the machine operators, the power to run the machines, the wages and commission of the sales staff, the cost of advertising and any sales promotions.
Directors Officials appointed by shareholders to manage the company for them.
Discounts can be given for a variety of reasons, e.g. buying in bulk, spending large amounts, trade discount, early settlement discount.
In company accounts these are the sums that are available for dividends to shareholders.
While based on the net profit, they may be increased by undistributed profits from the previous year or reduced by the need to retain some for the reserves.
When a company earns a profit, some of this money is typically reinvested in the business (retained earnings), and some of it can be paid to its shareholders as a dividend.
Paying dividends reduces the amount of cash available to the business, but the distribution of profit to the owners is the purpose of the business.
The amount paid out per share. Usually described as a percentage of the face value (the original price) of one share. So a 10% dividend on a £2.00 share would be 20p.
As every transaction must have an equal or zero effect on both sides of the accounting equation, every positive amount entered (debit) must be mirrored by a negative amount or amounts (credit).
Drawings do not count as an expense in the Profit and Loss account and must be included in the financed by section of the Balance Sheet.
AVVERTENZE D'UTILIZZO: Il presente glossario contiene una definizione dei termini più frequentemente utilizzati nella contabilità d'impresa nel Regno Unito.
La spiegazione di ciascuno dei termini indicati in questo glossario è di carattere meramente orientativo e priva di valore legale; si raccomanda, quindi, di tenere conto del contesto e dell'evento in cui essi vanno applicati, in quanto il significato loro attribuito potrebbe differire rispetto a quello qui rappresentato.
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