A plan that sets out the expected financial
transactions for a business in a future reporting period.
What is a budget?
100
Obligations of economic sacrifices of a business
entity.
What are liabilities?
100
Owner adds $5000 capital.
Cash Budget
100
This is a rule followed by accountants in regard to the original cost being recorded for any item purchased by the business
What is Historical Cost?
100
State 4 cash inflow items which would not be included in a budgeted income statement.
What are: GST Collected, Collections from Debtors, Loan, Capital
200
A report that shows estimates of cash
receipts and cash payments, and an estimated cash
balance, at a particular point in time in the future.
What is a cash budget?
200
The excess of revenues over expenses for a specific period of time.
What is profit?
200
Credit Fees
Income Statement
200
This principle allows accountants to divide the life of a business into particular periods of time, and assign relevant expenses and revenues to the appropriate period.
What is the Reporting Period Principle?
200
State 4 cash outflow items which would not be included in a budgeted income statement.
What are GST Paid, payment to creditors, payment of loan, drawings
300
A table used by businesses (that sell on credit) to help predict cash inflows from debtors.
What is a debtors collection schedule?
300
Losses of economic benefits that cause assets to decrease or liabilities to increase
What are expenses?
300
Collections from Debtors
Cash Budget
300
This principle demands that the same accounting methods be applied from one reporting period to the next.
What is the Consistency Principle?
300
List 4 possible uses of a cash surplus?
What are:
pay off some liabilities
invest internally through the purchase of non-current assets
withdraw some for personal use
invest the cash externally.
400
A situation in which a cash budget predicts that a business will have an amount of cash in excess of its needs at some time in the future
What is a cash surplus?
400
inflows of economic benefits that cause an increase in assets or a decrease in liabilities, are usually gained from the provision of goods or services to customers.
What are revenues?
400
Cash fees
Cash Budget & Income Statement
400
A Qualitative Characteristic that allows accountants to match the results achieved by a business in one year to those of previous years.
What is comparability?
400
List 4 possible actions to take in the event of a cash shortage.
What are:
reducing the level of drawings
contributing additional capital
reducing the level of expenses
postponing the payment of expenses
postponing the purchase of additional assets
generating additional revenue
offering incentives to debtors to encourage payment
borrowing money externally.
500
The difference between a budget estimate and
an actual result.
What is a budget variance?
500
Items controlled by a business entity that have future economic benefits.
What are assets?
500
Payment of advertising
Cash Budget & Income Statement
500
A Qualitative Characteristic that states that accounting
reports should be based on data that can be checked, or verified, by independent people.
What is reliability?
500
Identify three possible reasons for a unfavourable surplus.
When revenues are less than expected or expenses are greater than expected, when debtors don't pay as expected.