Name	Definition
Absorption	Each Production Unit to Absorb Direct & Indirect Costs
Absorption Costing	Using this method costs are dived into:  [1] DIRECT COSTS (Raw materials, Labour hour) and [2] INDIECT COSTS (Heat, Light, Rent, Rates, Cleaning)  They need to be apportioned on the basis of say CAPACITY or AREA and then allocated to the product
BEP	Break Even Point
Budgeting Methods	[1] Incremental Budget - [2] Zero Base - [3] Rolling Budget - [4] Flexible Budget
Capital Expenditure	Assets "Fixed" that is going to last more than one year
Consistency	Use the same Method
Contribution	Sales - Variable Costs = Contribution
Corporate Governance	What they are doing for returning of the money invested
Current Assets (Non Fixed Assets)	Stock, Debtors, Bank, Cash
Equity	Fixed Assets + Current Assets - Current Liabilities = Equity (What Fund the Business)
Fixed Assets	Premises, Equipment, Vehicles (<1 Year)
Flexing the Budget	Adjusting to reflect Actual Sales and not budgeted
Going Concern	Business is valued as it will stay in business
Gross Profit	Sales – Cost of goods sold or (Cost of Sales) = Gross Profit
Limiting Factors	Capacity, Materials, Skilled Labours - (Limited Resources)
Management Account (Why?)	[1]  Manage the Cash Flow - [2] To Get the Price to cover the Costs - [3] Efficient use of the resources - [4] To see why and where we have over or under spent
Margin	Is the point at which every item sold makes Profit (After the BEP is Profit)
Margin of Safety	Is the budgeted Sale from the BEP e.g. ((BEP 100pcs) budgeted 125pcs - 25pcs is the MOS)
Marginal Costing	An increase of One extra Unit will incur an increase in Variable Costs [Direct Materials & Direct Labour] This increas is the Marginal Cost
Matching of Accruals	Match Expenses, Revenue and Accounting Records
Net Income	Gross Profit – Total operating expenses = Net Income
Net Profit	Gross Profit - Expenses = Net Profit
Net Sales	Sales – Sales returns and allowances
OFR	Operating and Financial Review
Overheads	Idirect Materials + Indirect Labour + Indirect Expenses = Total Overheads
P&L	Profit & Loss
Profit (Accounting)	Accounting Profit is:  Revenue Income - Revenue Expenditure = P&L
Profit/Loss	Contribution - Fixed Costs = Profit/Loss
Prudence	Being Careful (Record Cheques spent when written and not when cashed)
Revenue Expenditure	To provide benefit for only one period  e.g.(Land, Building, Machineries, Motor Vehicles, Furnitures and Fittings)
Working Capital	Current Assets - Current Liabilities = Working Capital