Accounting as a Profession
Planning, Recording, Analysing and Interpreting Financial Information
What is Accounting
After Journalizing transactions the next step is
Posting to the ledgers
What is the Accounting Equation?
Assets = Capital + Liabilities
These two accounts are affected when the owner invests $5000 into the business bank account
Bank and Capital
Goods returned by a customer to the firm
Return Inward/Sales Return
The record keeping aspect of accounting
What is book-keeping
This type of business has 2-20 persons
What is Partnership
These are the 2 categories of Assets
Non Current and Current Assets
When an asset increases the entry should be made on this side of the account
What is debit
Day to day cost consumed during the operation of the business
Expenses
What external stakeholder are concerned with the timely payment for goods they supply?
What is Supplier/Creditor
These are the two main financial Statements
Income Statement
Statement of Financial Position
Anything that a business owes
Liability
When a liability decreases the entry should be made on this side of the account
What is debit
An economic resource of the business
Asset
This internal stakeholder is concerned with the amount of profits the business makes
What is Owner
Computerizing accounting processes increases processing speed. True or False
True
The capital of a business is calculated as
Capital = Assets -Liabilities
These two accounts are affected when the owner pays cash $200 for supplies
Cash and Supplier
This book is used to record double entry accounts
General Ledger
This ethical principle expects the accountant to be straightforward and honest in all professional and business relationships
What is Integrity
This accounting concept states that the business is distinct from its owner
Separate Legal Entity
These are loans payable after more than one year
Non Current Liabilities/Long Term Liabilities
These two accounts are affected when a cheque is received for good sold
Bank and Sales
A series of steps that the business follows when recording accounting transactions
Accounting Cycle