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Accounting flashcards
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- 1Sole Traderone-person business where the owner supplies most of the funds, runs the business, is responsible for its debts, and bears all losses.
unlimited liability and may work in the business by themselves or employ workers. Sole traders cannot operate banks, building societies, or insurance, and require a license for certain professions. - 2Separate Accounting Entityfinancial records are prepared for a distinct unit or entity regarded as separate from the individuals that own it.
- 3Separate Legal EntityA company by law is regarded as a separate legal person.
It has its own property in it's own right - it is not property of the owner or shareholders - 4Unlimited LiabilityThe owner's private possessions may be sold to pay debts of the business
- 5Limited Liabilityonly liable to the extent of the amounts unpaid on their shares
- 6PartnershipA partnership involves two or more people operating a business, with each partner having unlimited liability.
- 7Partnership Actan agreement between partners
states how the partnership will operate and managed
and how responsibilities and profits are shared - 8TrustTrusts transfer assets to trustees for beneficiaries' benefit, with trustees controlling assets.
- 9BeneficiariesTrusts transfer assets to trustees for beneficiaries' benefit, with trustees controlling assets.
- 10Private CompanyA firm who's shares do not trade on public exchanges and are not issued through an initial public offering (IPO)
- 11Public companyA company who's shares are divided into shares that can be traded by the general public
- 12Non-profit organizationsprimary motive is to provide a focus and services for people with
common interests (e.g. religious, sporting or recreational), or to carry out charity work. - 13Public sectorprovide the citizens of the
country with various services. These organizations operate at the federal, state and local levels, providing
transport, power and other public services to the community. - 14Internal Usersall levels of management and other governing bodies
make decisions such as financing, personnel, production and marketing - 15External usersinvestors, resource providers, government departments, other parties performing a review or oversight function
evaluate efficiency
ensure all parties are following requirements and meeting social obligations - 16Accounting AssociationsCPA - Chart Participating Accountants
CA ANZ - Charted Accountants Australia and New Zealand
IPA - Institute of Public Accountants - 17Accounting standardsset by the Australian Accounting Standards Board (AASB)
- AASB 101 Presentation of Financial Statements
- AASB 102 Inventories
- AASB 107 Statement of cash flows
- AASB 116 Property, Plant and Equipment - 18Corporations Act 2001heavily influenced practice and reporting requirements of accounting
ASIC
Australian Securities and Investments Commission
ASX
Australian Stock Exchange - 19Internal Auditoremployed by the organization
ensures correct processes are being followed - 20External Auditoran independent person who is called upon to express an opinion that a company's financial reports provide true and fair representation of its financial status
- 21Monetary PrincipleStates that all transactions are recorded in the common monetary units in use - dollars and cents
Thus transactions that cannot be quantified in financial terms are not recorded in the financial reports - 22Going Concern PrincipleRequires that the business is going to continue its operations indefinitely and is not likely to be liquidated in the foreseeable future
Hence the cost or purchase price rather than the liquidation values are generally used - 23accounting entity conceptthe owner is separate to the business for accounting purposes
- 24Accounting Period Conceptfor accounting purposes the accounting period concept assumes that the life of a business is divided into arbitrary time periods
- 25Accrual Accountingshow when the transaction occurred rather than cash flow
Indicates
- when revenue is earned
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- Fichas sobre Accounting flashcards , creado por Isabelle Geutjes el 06/03/2024.
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- Isabelle Geutjes
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