IB Business Management 3.4.2 Final Accounts Key Definitions

The value of an asset as recorded in a company's financial statements, usually the original cost minus depreciation, amortization, or impairment costs.

The direct costs associated with producing or purchasing goods that a company sells during a period, including raw materials and labour.

The set of financial statements prepared at the end of an accounting period, usually including the profit and loss account and the balance sheet.

The original purchase price of an asset, recorded in accounting records, without adjustments for inflation or market value changes.

The total assets of a business minus its total liabilities, representing the owners’ equity.

A Profit and Loss Appropriation Account is an extension of the Profit and Loss Account that shows how a company or partnership allocates its net profit at the end of an accounting period. It is mainly used by partnership firms and companies to distribute profits among partners, shareholders, or reserves.

A financial statement that presents a company’s financial position at a specific point in time, listing assets, liabilities, and equity.

A financial statement showing a company's revenues, expenses, and profits over a specific period.

A Trading Account is a financial statement that forms part of the final accounts of a business. It is prepared to determine the gross profit or gross loss of a company during an accounting period.

The practice of manipulating financial statements to make a company's financial position appear stronger than it actually is.