General Purpose Statements
This General Purpose Statement shows the financial position of the business on a particular day
What is the Balance Sheet?
Another word for inventory
What is stock?
In the bank reconciliation statement, a positive bank balance is shown on the bank statement in this way.
What is credit?
Balance Day Adjustments are used to ensure that the business is following this concept.
What is Faithful Representation?
This liability account is a facility that allows the business' bank account to go into negative, up to an agreed upon limit.
What is a bank overdraft?
This statement outlines the Operating Activities, Investing Activities and Financing Activities of the business.
What is the Statement of Cash Flows?
This method of recording inventory uses a Purchases account.
What is the Periodic System of Inventory?
Following the system where income is recorded when money is received and expenses are recorded when money is paid out.
What is Cash Accounting?
This system of accounting bring about the need for Balance Day Adjustments, where income is recorded when it is earnt and expenses are recorded when incurred.
What is Accrual Accounting?
This external source of finance does not impact gearing.
What is leasing?
Where would one find information about the owner's interest in the business?
What is the Statement of Changes in Equity?
This is the term that describes a firm's ability to get its hands on cash.
What is Liquidity?
The terms cash and profit are often confused. Cash includes which elements of the accounting equation?
What are all elements of the accounting equation (Revenue, Expenses, Assets, Liabilities and Owner's Equity)?
This concept brings about the need for Balance Day Adjustments because not all transactions fit neatly into one period of time.
What is the Accounting Period Convention?
This is one of the key concepts when selecting a source of finance. It involves the term of the loan and the life of the asset.
What is the Matching Principle?
This Assumption requires an accountant to follow the same process and procedures with recording, from one year to another.
What is the Consistency Assumption?
This can be calculated from the 'out' column on a stock card.
What is Cost of Goods Sold?
This has drastically innovated the Ban Reconciliation Process.
What is Cloud Based Accounting Software?
How would 'unused stock' be recorded in the financial statements?
What is a Current Asset?
This process involves Planning, Controlling and Evaluating.
What is budgeting?
This legislation outlines the reporting and disclosure requirements for Companies in Australia.
What is the Corporations Act (2001)?
The net realisable value of stock would be used for stock, only if it is lower than the historical cost.
What is the Lower of Cost Rule?
This category of finance includes those of an external nature eg. Loan, Leasing etc.
What is Debt Finance?
Payment has been received for services not yet performed or inventory not yet delivered to the customer.
What is Unearned Revenue?
Depreciation, Prepaid Rent and Accrued Wages are not included in financial statements such as the SCF and Cash Budget for this reason.
What are non-cash items?