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11 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is accounting? |
♥ The systematic recording of the monetary values of a business ♡The provision of financial info as a basis for decision making |
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What are the 3 parts of the accounting process |
Identify, record, communicate |
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Define identify |
♡Select evidence of financial activity (transactions)
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Magnifying glass, recorder, person talking |
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Define record |
Provide a permanant history of the transaction (business activity) |
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Define communicate |
Use accounting reports (i.e financial statements) |
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5 forms of Ownership |
Partnership, closed corporation, non-profit, proprieter, company |
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Explain the difference: Company vs. Corporation |
♥Company: entity that engages in the business.
♡Corporation: Owned by thousands of indv. via shares. Legal owners are seperate. |
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Who uses the financial info and why? |
♥Management : goal setting & planning ♡Investors: to determine whether the company remains a good investment ♥Creditors: money, merch & service lenders ♡Employees: To determine job security (future employment) and as a basis for wage negotiations ♥Government: for tax and statistical purposes. |
MICE G |
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Management vs Financial Accounting |
♥ Management accounting= providing financial information for specific purposes (as this info is used by management in decision making and goal setting) ♡Financial Accounting= Providing financial info for the entity as a whole. |
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What are the two important looking accounting terms? |
♡♡ Generally accepted Accounting Practice ♡♡ Accounting Policy and Disclosure Thereof Accounting Policy and Disclosure Thereof |
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What is the Accounting Policy and Disclosure Thereof? |
A set of decisons that determines on what basis an enterprise will deal with/ treat the same types of transactions to acheive consistancy; which is disclosed in the financial statements. Eg. How an enterprise should disclose on which basis it deals with depreciation in the value of a property and equipment. |
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