1, intro to accounting

Question 1

what is the difference between a trading and a service business

Answer 1

trading deals w the sales and purchase of goods while a service business deals with the provision of services to customers

Question 2

what are some professional ethics an accountant shld have

Answer 2

integrity

objectivity

Question 3

what is the role of accounting

Answer 3

accounting is an information system that provides accounting information for stakeholders to make informed decisions regarding the management of resources and the performance of the business

Question 4

what is the role of an accountant

Answer 4

to prepare and provide accounting information for decision making

Question 5

why do accountants need to be ethical (2)

Answer 5

to not mislead users into making poor decisions

to ensure financial reports prepared contain accurate info

Question 6

explain integrity

Answer 6

to be straightforward and honest in all professional relationships

Question 7

explain objectivity

Answer 7

to not let bias, conflict of issue or the undue influence of others override ones professional judgement

Question 8

what decisions do owners have to make

Answer 8

whether to continue to invest or to sell the biz

Question 9

what decisions do managers have to make

Answer 9

ways to improve the biz

Question 10

what decisions do employees have to make

Answer 10

whether to continue working at the biz

Question 11

what decisions do lenders have to make

Answer 11

whether to grant loans to the biz

Question 12

what decisions do suppliers have to make

Answer 12

whether to sell to the biz on credit

Question 13

what decisions do customers have to make

Answer 13

whether to buy from the biz

Question 14

what decisions does the government have to make

Answer 14

the amount of tax to collect from the biz

Question 15

what decisions do competitors have to make

Answer 15

ways to improve their biz

Question 16

how many owners does a sole proprietor biz have

Answer 16

1

Question 17

how many owners does a llp biz have

Answer 17

2+

Question 18

how many owners does a pte ltd biz have

Answer 18

<50

Question 19

how are sole proprietor companies managed

Answer 19

the sole owner has total control

Question 20

how are llp companies managed

Answer 20

one of the two owners will contribute most to daily operations

Question 21

how are pte ltd companies managed

Answer 21

shareholders have no control; employees make decisions

Question 22

what are the risks of sole proprietor companies

Answer 22

loss is bored by the sole owner

Question 23

what are the risks of llp companies

Answer 23

loss is bored by the two owners

Question 24

what are the risks of pte ltd companies

Answer 24

shareholders lose part/all of their investments if the company is not successful

Question 25

explain the prudence concept

Answer 25

business should understate profits and assets of the biz, all losses are expected to be reported but not all gains are expected to be reported

Question 26

explain the consistency concept

Answer 26

entities have to use the same accounting methods and procedures from period to period to ensure meaningful comparison over time

Question 27

explain the accrual concept

Answer 27

all revenues and expenses needs to be taken into account for the period in which they are earned of incurred regardless whether cash is received or paid

Question 28

explain the matching principle

Answer 28

expenses incurred in a given period must be matched against income to determine the profit or loss for the period

Question 29

explain the accounting period concept

Answer 29

divides the life of a business into equal time periods for financial reporting

Question 30

explain the going concerns concept

Answer 30

assumes that the business has an indefinite economic life

Question 31

explain the going concerns concept

Answer 31

assumes that the business has an indefinite economic life

Question 32

explain the objectivity concept

Answer 32

states that transitions are recorded based on information that is reliable and verifiable

Question 33

concepts and the acronym

Answer 33

penguins call alfred massive amazingperson going overseas

prudence, consistency, accrual, matching, accountingperiod, goingconcerns, objectivity