Vocab
Accounting
The process of keeping and interpreting financial data
What is the importance of accounting
Accounting information exposes the company's financial performance, and lets people know how well the company is doing
Assets
Anything of value that the business owns
Honesty
Telling the truth
What is a pure risk
Risks that are beyond human control
Ethics
The principles that control a person's behavior
What is the importance of ethics
Ethics guides us in making the right decision
Cash
Physical currency, money in notes or coins
Fairness
Treating everyone the same way
what is an hazard risk
Risk that might injure people
Integrity
acting with honesty in every situation, doing the right thing even if its hard
What is the importance of integrity
It leads us to make the right decision, even when no one is watching
Balance sheet
Report of a business's financial condition at a particular moment
Respect
A deep admiration of someone for their abilities and achievements
What is an strategic risk
a risk that effects the company's outcome in the future
Transperancy
Maintaning honest and open communications
What is the importance of transperancy
It reduces uncertainty, and supports trust and trustworthiness
Cash accounting method
records income and expenditures at the time the money changes hands
Loyalty
Faithful and devoted to someone or something
Sara saw a co-worker steal money from the cashier, if she doesn't report him to their boss, what could happen.
It would increase the probability of a financial risk
Accounting Standards
Rules that accountants must follow when preparing financial statements
What is the importance of Accounting standards
It ensures the financial statement from multiple companies are comparable
Accural accounting method
Businesses journalize income and expenditures at the time they occur, even if no money changes hands at that time.
Accountability
Expected to justify actions
Alex owns a car repair shop, and the car lift collapse and a car got damaged. What type of risk is this
Operational risk