What
What is the main aim of a business?
To make a profit
...letting people and organizations know:
*l if they are making a profit or a loss;
*l what their business is worth;
*l what a transaction was worth to them
*l how much cash they have;
*l how wealthy they are;
*l how much they are owed;
*l how much they owe to someone else;
A Balance Sheet tells...
...what the business owns and what the business owes
What must exceed sales in order to make a profit
...in order to make a profit income must exceed sales
List 5 users of accounting information
Owners
*Shareholders
*Managers
*Prospective Investors
*Creditors and other Lending Institutions
*Bank
*Suppliers
*The General Public
*Government
*Employees
*Regulatory Agencies
*Customers
The primary objective of accounting is to...
...provide information for decision making.
What is book keeping
...recording and managing business transactions in the books of accounts
List 5 careers in Accounting
ACCOUNTANT
AUDITOR
BANKER
INSURANCE AGENT
BOOKKEEPER
STOCK BROKER
Accounting is, therefore, concerned with:
recording data;
classifying and summarizing data;
communicating what has been learned from the data.
What is revenue?
...the monetary value of goods and services supplied to customers
List all the steps includes in transitioning from bookkeeping to accounting
RECORDING FINANCIAL DATA
CLASSIFYING FINANCIAL DATA
SUMMARIZING FINANCIAL DATA
COMMUNICATING FINANCIAL DATA
THE GOVERNMENT, SUPPLIERS AND EMPLOYEES NEED ACCOUNTING INFORMATION TO...
ENSURE THAT THE FINANCIAL STATE OF THE BUSINESS IS FAVORABLE TO THEM
What is an asset as opposed to a liability?
Assets are resources owned by the business.Liabilities are the monies owed for assets supplied to a business.
List the most important financial statements
Trading a profit and loss account (Income statement)
Balance sheet (Statement of financial position)
Accounting can be defined as...
...the process of identifying, measuring, and communicating financial information to permit informed judgments and decisions by users of the information’.