LWEO

chapter 6

chapter 6

Ewout’s courier service

In this chapter you are made familiar with a number of things that you definitely need to know as an entrepreneur. Of course, you can always call in the help of a bookkeeper, but if you don’t know yourself what a balance sheet is, what the items in a balance sheet mean, why there is a debit side and a credit side, you will inevitably get into trouble sooner or later. The ability to read a balance sheet is part of the basic knowledge of an entrepreneur. In addition, there is a profit and loss account, a very important survey in an enterprise. From the profit and loss account you can deduce what your revenues are, what the costs are and whether you have made a profit or incurred a loss. In this chapter you learn how to draw up a balance sheet, how financial transactions lead to changes in the balance sheet and you also learn how to draw up a profit and loss account. Finally, this chapter devotes attention to VAT, which is neither a revenue nor a cost item for the enterprise. In the subject of Management and Organisation in 4 and 5 havo a lot of attention will be given to this.

links
Balance sheet and profit and loss account (www.jdjong.nl)
Turnover tax, including or excluding VAT (www.financieel.infonu.nl)

glossary

Glossary chapter 6

assets
On the debit side (left) of a balance sheet you find the possessions or assets of an enterprise.
balance sheet
An overview of the possessions (assets) and debts (liabilities) of an enterprise at a certain moment.
cost price
The costs expressed per unit of product.
costs
Sacrifices that must be made for the running of the business.
creditors
Debts to suppliers and banks. A supplier (person or enterprise) that must be paid for the provision of a good or a service.
credit side
On the credit side (right) of a balance sheet you find the liabilities – owner’s equity and loan capital – that an enterprise has at its disposal.
debit side
On the debit side (left) of a balance sheet you find the assets of the enterprise.
debtors Money that is still owed to the enterprise. A person or enterprise that still needs to pay for goods delivered or services provided.
depreciation
On-charging the costs of assets that last for a number of years. The loss of value of sustainable means of production (usually calculated per year).
flow quantity
Quantity measured over a certain period, such as income.
loan capital
The loan capital consists of the debts (borrowed money) of a person or enterprise. Loan capital must be paid back and interest must be paid on it.
owner’s equity
The owner’s equity consists of the value of the possessions of a person or enterprise minus the debts of that person or that enterprise.
personal deposit
Money which the owner of a one-man business has paid into his enterprise.
personal withdrawal
The money or the goods that are withdrawn from a one-man business for private purposes.
production company
An enterprise that makes or processes goods or provides services. The enterprise makes those products itself.
profit and loss account
An overview of the revenue, the costs and the result (= profit or loss) over the past period.
statement of changes
A balance sheet on which a change is represented that results from a financial transaction.
stock quantities
Quantities measured at a certain moment or time, such as capital.
trading company
Enterprise that purchases goods and sells them without processing hem first.
VAT
Value added tax or turnover tax.