Page 164 - Book-keeping for Secondary Schools Student’s Book Form One

Book-Keeping for Secondary Schools

Interest is money paid regularly or at specific intervals at a particular rate for the use
of money lent or borrowed

Inventory goods which are held by the business for resale. For a manufacturing firm,
they may be finished goods, partly finished goods or raw materials awaiting
conversion or processing into finished goods which will be sold
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Invoice it is a document prepared by a seller and sent to a buyer when goods are
sold or services are rendered on credit

Investor a person (or entity) who puts his or her money into business in order to
become one of the owners for the purpose of getting a share of the profit
generated.
Journal a book of prime entry where transactions are initially recorded before they
are posted to ledger accounts
Ledger the main book of an account which is used to record business transaction
using the double entry principle of Book-keeping

Liability a claim against resources of an enterprise
Liquidity it is a measure of the ability of a business to meet its financial obligations
as they fall due. One of the indicators of liquidity is time spent to convert
its current assets into cash

Loss the excess of expenses over revenue
Non-productive these are assets existing in the business but not fully utilised to generate
assets revenue. For example, a large office building in excess of the business
requirements may represent a non-productive asset
Occupation this is a person’s principal work or business used as a means of earning a
living

Overdraft loan facility provided by a bank to an account holder to withdraw and pay
bills when the account balance is insufficient

Owner’s equity capital contributed by an owner to start or expand a business. It can increase
or decrease by the amount of profit or loss generated by a business
Posting the transferring of entries from a book of prime entry to the relevant ledger
accounts

Profit the excess of revenue over expenses
Purchases goods bought for resale

Receipt an electronic or printed acknowledgment of the amount of cash received in
a transaction that involves transfer or payment of cash

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Student’s Book Form One

Book Keeping Form 1 New 2024 FINAL.indd 156 18/10/2024 10:14