Karteikarten
Chapter 1 Definitions
Karten in diesem Stapel (31)
- 1Unincorporated Private Sector Organisations:Sole Traders
Partnerships
Limited Liability Partnership* - 2Incorporated Private Sector Organisations:Private Ltd Companies
Public Ltd Companies
Limited Liability Partnership* - 3Features of Limited Liability Partnerships:-Owned by members
-Separate legal entity from members
-Must have 2 or more designated members
-Legislation: Limited Partnership Act 200
-Financial Statements filed at Companies house - 4Features of a Limited Company-Owned by shareholders
-Separate legal entity from owners
-Minimum of one shareholder, but no maximum
-Legislation: Companies Acts
-Managed by Directors
-Financial Statements filed at Companies House - 5What is the purpose of statement of profit or loss and other comprehensive income?To measure the financial performance of the company for a particular period
- 6What is the purpose of statement of changes in equity?To show the changes that have taken place to the shareholders stake in the company for the accounting period
- 7What is the purpose of the statement of financial position?To list the assets, liabilities and equity (capital) at the end of the accounting period
- 8What is the purpose of statement of cash flows?To link profit with changes in assets and liabilities and the effect on the cash of the company
- 9What is the objective if financial reporting?To provide financial information about the reporting entity that is useful to its existing and potential investors, lenders and other creditors in making decisions relating to providing resources to the entity
- 10Users of the financial statements-Existing and potential investors
-Lenders
-Suppliers
-Employees
-Customers
-Competitors
-Government Agencies
- The public
-Managers - 11What are the Elements of financial statements?-Assets
-Equity
-Liabilities
-Income
-Expenses - 12What is The Accounting Equation?Assets - Liabilities = Equity
- 13Define: AssetsAn asset is a present economic resource controlled by the entity as a result of past events
- 14Define: EquityEquity is the residual interest in the assets of the entity after deducting all its liabilities
- 15Define: LiabilitiesA liability is a present obligation of the entity to transfer an economic resource as a result of past events
- 16Define: IncomeIncome is increases in assets or decreases in liabilities that result in increases in equity other than those relating to contributions from holders of equity claims
- 17Define: ExpensesExpenses are decreases in assets or increases in liabilities that result in decreases in equity other than those relating to distributions to holders of equity claims
- 18Define: Profit or LossesProfits are increases in equity not resulting from contributions from holders or equity claims.
Losses are decreases in equity not resulting from distributions from holders of equity claims - 19What are the Fundamental Qualitative Characteristics?-Relevance
-Faithful Representation - 20Define: RelevanceInformation that is capable of making a difference in the decision that is made by users- it has predictive value, confirmatory value or both
- 21Define: Faithful RepresentationInformation must be complete, neutral and free from error
- 22What are the Enhancing Qualitative Characteristics?-Comparability
-Verifiability
-Timeliness
-Understandability - 23Define: ComparabilityEnables users to identify and understand similarities and differences among other years and in different companies
- 24Define: VerfiabilityHelps assure users the information is faithfully represented
- 25Define: TimelinessHaving information available in time to be capable of influencing decisions
- 26Define: UnderstandabilityEnsuring information is clear and concise
- 27What are the Accounting Concepts?-Business Entity
-Materiality
-Going Concern
-Accruals Concept - 28Define: Business EntityFinancial statements record and report on the activities of one particular entity
- 29Define: MaterialityInformation is material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions that primary users make
- 30Define: Going ConcernUnderlying assumption in the preparation of the financial statements that the entity will continue to trade for the foreseeable future
- 31Define: Accruals ConceptThe effects of transactions are recognised when they occur
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- Beschreibung
- AAT DAIFS Chapter 1 & 2 Karteikarten am Chapter 1 Definitions, erstellt von Jess Ainscough am 17/01/2023.
- Erstellt von
- Jess Ainscough
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