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Chapter 6
Balance sheet VAT Economie
31
Economics
8th Grade
02/08/2015

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Term
VAT is short for:
Definition
Value Added Tax.
A company can reclaim the VAT-part of all items they purchased from the government.
A company must transfer the VAT-part of all items which they sold to the government.
As a result the government receives only the VAT which corresponds with the value a specific company adds.
Term
Calculate the amount of VAT for the next purchase:
An Ipad for €479,- including 21% VAT
Definition
€ 83.13 (divide the amount by 121 and then multiply by 21).
Term
Who should pay the VAT and whom not?
Definition
Consumers pay for the VAT, companies eventually transfer it to the tax office (government).
Term
How can the owner's equity increase? Mention 2 ways..
Definition
By making a profit or transfer extra funds from the owner's private account to the business account
Term
Why is VAT called VAT, can you explain?
Definition
Each company makes sure that they transfer VAT to the tax office. Note this amount is precisely corresponding to the VAT over the added value of that company.
If a company makes a purchase they can get a VAT refund.
If a company sells for instance goods they have to transfer the VAT part to the tax office.
Hence if they bought something with value 10 VAT and resold it with value 25 VAT. As a result they only pay 15 to the tax office. The VAT belonging to their added value.
Term
What's the difference between a balance sheet and a statement of changes.
Definition
a balance sheet shows how the company has acquired its assets and what the company has done with these assets.
Term
What's an other name for loan capital
Definition
liabilities
Term
Owner's Equity =
Definition
The debt of the company to the owner
Term
Loan capital is used to
Definition
finance the assets
Term
Mention 4 different Inventory examples
Definition
curtains, floor coverings. lightning, office furniture
e.g. fitting up of the shed
Term
You can finance a company by
Definition
- the owner's money (owner's equity)
- money borrowed from others (loan capital)
Term
true or false:
Expenses increase the owner's equity
Definition
False, expenses reduce the OE
Term
True or False:
If the owner invests more private money into the company, the Owner's equity will increase
Definition
True, then the company should repay a bigger amount to the owner in the (near) future.
Term
A debtor is
Definition
a customer who did not pay us yet.
They already received an invoice and already received our product or service.
Term
A production company provide a service or manufacture goods which they make themselves.
They do not calculate the gross profit. Why not?
Definition
Because they make the products/services they provide themselves so they do not first purchase these from others.
Turnover less all costs is equal to the net profit.
Term
True of False
A trading company does not manufacture goods/services themselves
Definition
True
Term
True of False:
A trading company calculates straight to net profit
Definition
False, they first calculate the gross profit before they calculate the net profit (see Ch5 for details).
Term
Mourad wants to start his own hairdresser’s salon. He has saved up an amount of € 20,000 for this and also wants to borrow € 14,000 from the bank. He uses the money for the purchase of hairdresser’s chairs, mirrors, equipment carts, cabinets, desk, chairs for the waiting area, etc.
Below you see a survey of the goods he has purchased with his total capital.
Hairdresser’s inventory € 23,500
PC with printer € 1,100
Consumables € 5,600
Cash register € 2,600
Cash € 1,200
How big is Mourad’s own equity?
A. € 34,000
B. € 21,200
C. € 20,000
D. € 6,000
Definition
euro 20,000.-
Term
If KPN supplies your company, but you did not yet pay the invoice. In your balance sheet KPN will appear as a:
- debtor or a creditor?
Definition
KPN will be one of the creditors.
Your company still has a debt. In the near future the invoice needs to be paid.
Term
Private withdrawals do not affect the gross profit, but they do affect the net profit of an enterprise.
Definition
Incorrect (only OE is lowered)
Term
A profit and loss account provides insight into the causes for the change in the owner’s equity
Definition
True
Term
A profit and loss account states stock quantities
Definition
No, this will show om a balance sheet.
Term
Customers who still need to pay money are called creditors
Definition
No debtors. The money is not yet transferred to the bankaccount of the company.
Term
Does VAT influence the profitability of a company?
Definition
No such thing. The company is only the 'vehicle' to transfer the tax to the authorities.
Term
Give an example of a flow quantity
Definition
Inventory
(a quantity that is renewed over a certain time).
Term
What's the opposite of a flow quantity?
Definition
Term
What changes on a balance sheet when something is damaged?
Definition
At the left hand side something will change: e.g. Car or coffee machine.
At the right hand side OE will drop.
Term
What does a balance sheet state?
Definition
What the value is of all different assets
How big the debt of the company are (liabilities = OE + loans)
Term
Give a definition of Profit&Loss account
Definition
a survey of costs and revenues in a certain period
Term
I studied Chapter 6 well.
Definition
I liked using the flashcards !!
Term
We could change the way we study by preparing flashcards for the whole class.
Definition
Perhaps 3 students could cover a course.....
so all courses are covered and summarized in a different way. (Teacher can check the input).
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