1. Intro to Accounting Flashcards
Define Accounting
Systematic and comprehensive recording of financial transactions pertaining to a business.
State 5 main types of business
Public/Private
Sole trader/Partnership
Company with limited liability
State the difference between plc and ltd companies
Plc: Large company quoted on stock exchange
Ltd: Smaller company which is privately owned
Give examples of external users of the accounting info system
Investors Bankers Government Capital Markets Customers Suppliers Financial Analysts
Give examples of internal users of the accounting info system
Management
Employees
What are the two types of accounting, according to users?
Financial Accounting (external)
Managerial Accounting (internal)
What does an output consist of in terms of documentation?
Balance sheet Income statement Owners' equity statement Cash flow statement Statement of accounting policies
Describe the output of the financial accounting system
Show financial position of a company at the end of the year
Characteristics of financial reports
Understandable Relevance Consistency Comparability Reliability Objectivity Timely
What are the key differences between management and financial accounting?
Purpose specific vs. General purpose
Non-financial sometimes vs. monetary based
What is a “business entity concept”?
A business separate from the owners
