Assets, liabilities and the balance sheet

29 Getting paid

1.  Invoice- is a document asking for payment for something and showing the amount to pay

2. invoicing or billing-the activity of producing invoices and sending them to customers

3. chases an invoice- ask for payment because it has not been paid on time

4. trade credit – a period of time, usually 30 or 60 days, before they have to pay

5. a discount-a reduction in the amount they have to pay.

6. Upfront- pay before they receive the goods

7. payment terms – rules on when and how customers should pay

8. cashflow– the timing of payments coming into and going out of the business

9. asset- is value or the power to earn money for a business

10. current assets – money in the bank, investments that can easily be turned into money, money that customers owe, stocks of goods that are going to be sold

11. fixed assets – equipment, machinery, buildings, land

12. goodwill – the value that a company has through its reputation with existing customers – and brands, because an established brand allows its owner to earn money from it, rather than having to build up a brand from nothing

13. going concern-is sold as a functioning operation.

14. depreciation or amortization-Assets, such as machinery and equipment, lose their value over time because they wear out, or are no longer up to date

15. charge-s is shown in the financial records: the value of the equipment is reduced

or written down each year over that period.

16. written off completely – shown as having no value at all – at the end

17. book value- The value of an asset at a particular time as shown in a company’s accounts

18. liabilities- are its debts to suppliers, lenders, the tax authorities

19.  balance sheet gives a picture of its assets and liabilities at a particular time. This is usually at the end of the 12-month period of its financial year