Fichas
Accounting
Fichas del conjunto (33)
- 1chapter 1-
- 2financial data vs financial informationfinancial data is the facts and figures on which financial information will be based on. this data is then converted into financial information once it has been sorted and processed into a more usable and understandable form
- 3non-financial informationis a very broad term that includes any information that cannot be found in the financial statements, and it not expressed in dollars or cents.
- 4the accounting processthe accounting process os the process of turning financial data into financial information is facilitated by what is known as accounting process
- 5stages of the accounting processstage 1- Source documents
stage 2- recording
stage 3- reporting
stage 4- advice - 6accounting assumptionsis a set rules (assumptions) that all reports follow
- 7accounting assumption- accounting entitybusinesses assess are seperate to the owners. also applied to debt
- 8accounting assumption- going concernthe idea that the business will continue on forever, current / non- current
- 9accounting assumption- periodidea that the reports of a business are made for a particular period of time. used to compare
-yearly
-monthly
-quarterly - 10accounting assumption- accrual assumptionrecognise an item as soon as it has or will occur
- 11Qualitative characteristicscharacteristics of a report
- 12Qualitative characteristics - relevanceinformation that will be used in decision making of a business
- 13Qualitative characteristics- faithful representationinformation reported actually happened. representation of reality
- 14Qualitative characteristics- comparabilityshould be able to compare our reports, based on time and method used
- 15Qualitative characteristics- verifiabilityproof the event / transaction occurred
eg: receipts, cheques, invoice etc - 16Qualitative characteristics- timelinessending out information in a manner that allows decisions to be made
- 17Qualitative characteristics- understandabilityfinancial information in a report must be able to be understood by the reader
- 18chapter 2-
- 19assetsasset is an economics resource controlled by the entity as a result of a past event.
- 20liabilityare present obligations of the entity arising from a past event
- 21owners equityis defined as the residual interest in the assets of the entity after the deduction of its liabilities. owners equity is what is left over for the owner once a firm has met all its liabilities, or the owners claim on the firms assets
- 22the accounting equationassets = liabilities + owners equity
assets - liability - owners equity - 23balance sheetthe balance sheet is an accounting report that details a firms financial position in a particular period of time
- 24balance sheet has...a classified balance sheet has
-title
-balance sheet as at...
-current assets
- non - current assets
-current liabilities
- non - current liabilities
-total assets
-total equity
-owners equity - 25liquidityrefers to the ability of a business to meet its short term debts as they fall due, which is essential for survival
best way to measure this is by WCR
WCR = current assets / current liabilities = _ : 1 - 26stabilitythe ability of a business to meet its debts and continue its operations in the long term
best way to measure this is by the DEBT RATIO
debt ratio = total liabilities / total assets * 100 =
_%
debt ratio measure how much of the business is funded by external resources - 27chapter 3businessssss
- 28business ownershipssize of businesses
small business - 2-20 people
medium business - 20-200 people
large business - 200 + people - 29becoming a business ownerreasons for becoming an owner
-profit motive
-a desire for greater freedom/ independance - be your own boss
-identifying a market opportunity
- unemployment - 30resources required to establish a businessResources consist of:
personal resource- expertise, entrepreneurship, determination, humility, patience etc
external resources: accountants, lawyers, bank managers, programs/ mentorships - 31planninga comprehensive plan should include
-description of the business
-market analysis
-description of products
-detailed list of establishment costs and weekness of the owner
-projected sales and estimated running cost
etc - 32nature of business operationsretail / trading- this type of business purchase finished goods for the sole purpose of resale, inventory is purchased at cost price from wholesalers / manufacturers, and then sold at a markup price to consumers through retail outlet
service- this type of business perform a service for there customers so what is being sold at that time, labour and expertise. there is a physical exchange of goods.
manufacturing- type of business that produces the goods it sells, using production process to transform raw material into finished products
mixed business- will combine one or more types of operation - 33ownership structureowners and operated by one person
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- Year 11 Economics and Business Fichas sobre Accounting , creado por Harman Hans el 14/03/2021.
- Creado por
- Harman Hans
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