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Flashcards

Accounting

Elisha R Accounting 11th grade English 32 cards

Cards in this deck (32)

  1. 1What is accounting?- An information system
    - Language of business
    - It is the way to communicate information about business enterprises to interested people to make business and financial decisions
  2. 2What is accounting?A discipline which measurers, records and processes financial and other information about an organisation, and reports and interprets that information to interested parties to enable them to make appropriate decisions.
  3. 3What are accounting standards?The basic rules and practices that accountants follow. They are developed by the Australian Accounting Standards Board (AASB).
  4. 4What are the accounting entity assumptions?Separates the owner from the business for accounting purposes. However, the accounting entity may not always be the same as the legal entity; that is, the body which the law recognises as being responsible for the debts and actions of the business.
  5. 5What is a sole trader?If a business if owned by one person they are known as a sole trader. Sole traders have “Unlimited liability” for their business debts, and the owner may be sued and lose personal assets if the business has insufficient assets to meet its liabilities.
  6. 6What is an asset?Items of value owned or controlled by a business. Asset accounts= cash at bank, accounts receivable, inventories, furniture, motor vehicles, land, and shares.
  7. 7What is cash at bank?Cash held by the business in a bank account.
  8. 8What is accounts receivable?People or organisations that owe money to the business as a result of credit sales. The term ‘debtors’ is also commonly used.
  9. 9What are inventories?Items which are bought and sold by the business as the main source of income. This terms ‘goods’ or ‘stock’ are also commonly used.
  10. 10What are shares?Any investment the business has in shares in a company.
  11. 11What is a liability?Amounts owed by a business to external parties. Liability accounts= accounts payable, loan, mortgage.
  12. 12What is accounts payable?People or organisations to whom the business owes money as a result of credit purchases
  13. 13What is a loan?Money borrowed from a bank or other financial source
  14. 14What is a mortgage?A loan taken out by a business secured by assets it owns
  15. 15What is "Unlimited Liability"?The owner's possessions may be sold to pay the debt of the business
  16. 16What is owner's equity?The difference between the assets and liabilities of a business and equals the owner's investment in the business .e.g. capital, drawings
  17. 17What is revenue?The inflow of resources to a business. It increases equity and results from: The sale of inventories, services performed, general operations of the business .e.g. sales, discount expense , commission revenue, interest revenue, rent revenue
  18. 18What are expenses?Outflows of resources from a business. They decrease equity and result from: Services performed, cost of goods sold, general operations of a business .e.g. purchases, cartage inwards, discount expenses, salaries and wages
  19. 19What is the accounting equation?The relationship between the total assets, liabilities, and owner’s equity of a business at a certain date. The relationship is always equal.
  20. 20What is the accounting equation expression?ASSETS= LIABILITY + OWNER'S EQUITY
    LIABILITIES= ASSETS- OWNER'S EQUITY
    OWNER'S EQUITY= ASSETS- LIABILITY
  21. 21What are transactions?Financial events that affect the elements of the accounting equation
  22. 22What is an account?A record in a ledger where all changes to a particular item are shown
  23. 23What is a ledger?A book or file of the accounts of a business
  24. 24What is a source document?Details of a transaction and the evidence that the transaction has occured
  25. 25What is GST(Goods and services tax)?GST is a broad based tax of 10% on the supply of most goods and services consumed in Australia.
    Calculated:
    • 1/10 of the value (GST inclusive) OR
    1/11 of the price (GST exclusive)
  26. 26What are supplies?Goods and services sold by a business
  27. 27What are acquisitions?Goods and services bought by a business in order to conduct its business activities
  28. 28What are taxable supplies?Goods and services which GST included in their price e.g. furniture, clothing, stationery, telephone, supplying information, providing hire equipment, leasing business premises
  29. 29What are GST-free supplies?GST is not included on the sale of goods and service e.g. basic food, education, water, exports, international air & sea travel, health services
  30. 30What are input taxed supplies?GST is not included in the sales price e.g. interest, bank charges, sales of residential premises, residential rent, sale of food in school tuckshop
  31. 31What is a journal?A detailed account that records all the financial transactions of a business, so that they can then be used for future reconciling and transfer to other official accounting records, such as the general ledger.
  32. 32What is double entry booking?Double-entry accounting is based on the fact that every financial transaction has equal and opposite effects in at least two different accounts.

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11th grade Accounting Flashcards on Accounting , created by Elisha R on 02/02/2017.
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Elisha R
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