Flashcards
Accounting Definitions
Flashcards do conjunto (38)
- 1What is Accounting?Accounting is the process of identifying, measuring, recording and communicating financial information in order to permit informed judgements and decisions by users of information.
- 2What is Data?Anything that can be measured and given a value
- 3What is Information?When figures are summarised or rearranged in a structured fashion
- 4Quantitative DateInformations expressed in numerical form and which is measurable
- 5Qualitative InformationAll other information such as legal, social, environmental or ethical matters etc
- 6Financial InformationMay include budgets, ratios, sales results and current interest rates
- 7Non-Financial Informationmay include benchmarks, staff turnover and market share
- 8Relevance?Financial Information mud have value in terms of assisting users in making and evaluating decisions about the allocation of financial, physical and human resources.
- 9ReliabilityFinancial Information must be free from bias and undue error
- 10MaterialityInformation may be relevant in the general operations of an enterprise but might not be of significance when the entity is reporting
- 11ComparabilityThis is achieved by comparing an entity at one point in time and over time or an entity with other entities at one point in time and over time
- 12UnderstandabilityFinancial Information must be presented in a form that assists users in its understanding
- 13TimelinessFinancial Information may lose its relevance if there is a long time span before the information is presented to interested parities.
- 14Cost Vs BenefitsAccountants need to consider whether the provision of certain financial information will stimulate more benefits than the costs incurred.
- 15Internal UsersInclude all levels of management and other governing bodies of an organisation
- 16External UsersInclude present or potential investors and present or potential creditors
- 17ClarifyThe clarification stage involves setting the decision in its context by giving some thought to: objectives, problems diagnosis and constraints
- 18AnalyseThis staff involves doing the research and fact finding necessary to provide a sound base of information to support the decision making: involves information and ideas
- 19ChooseWhere the decision is made. Choices are made between small numbers of alternatives.
- 20ExecuteOnce the decision has been made, you need to be sure it is put into practice and followed up. Finally review the decision to see how well you achieved your objectives following the three steps; planning, controlling and reviewing
- 21Regulatory FrameworksCompanies have to comply with the regulations set out by the Australian Securities and Investments Commision
- 22Accounting EntityAny organisational unit for which accounting records are kept and about which accounting reports are prepared
- 23Legal EntityThe law does not see the separation of the business from the owners in the case of sole proprietors and partnerships.
- 24Reporting EntityAny business or part of a business that prepared a report on its financial activities.
- 25Accounting ProcessThis is the process required to convert raw transaction data to useable information for statement users.
- 26Monetary Unit Concept"Accountants consider only things that can be expressed in monetary terms"
- 27Dual AspectAccountants see total assets as equal to total equities
- 28Accounting EntityAccountants consider a business to be separate and distinct from the owner.
- 29Legal EntityIn the eyes of the law the owner and the business are seen as one in the case of sole traders and partnerships
- 30Going ConcernAccountants assume that a business has an unlimited life and that it will continue to operate in the foreseeable future and in the same general line of business.
- 31Accounting PeriodAccountants split the life of the business up into arbitrary time periods for recording and reporting purposes
- 32Historical CostAccountants normally value assets at the price paid to acquire them
- 33RealisationAccountants recognise revenue when goods or services have been delivered regardless of when cash for these is received.
- 34Accrual AccountingAccountants measure profit on the basis of revenue earned during the period and expenses used or incurred during the period
- 35ConsistencyAccountants consistently apply accounting procedures and policies from one period to the next
- 36PrudenceAccountants should exercise care and caution when dealing with uncertainties in the measurement process.
- 37ReliabilityAccountants should disclose all information relevant to statement users
- 38MaterialityAccountants record and report only those items which are material or important enough to affect the decisions of statement users
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- 12 Accounting FlashCards sobre Accounting Definitions, criado por Tess Morris em 02-10-2013.
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- Tess Morris
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