Accounting 1-3 Flashcards
GAAP
generally accepted accounting principals
IFRS
International Financial Reporting Standards (over 100 countries have adopted to this)
AcSB
Accounting standards board
CICA
Canadian Institute of Chartered Accountants
CA
Chartered Accountant
CPA
Chartered Professional Accountants
CGA
Certified General accountants
CMA
Certified Management accountants
what are the 5 activities an accountant does?
- Gathering financial information
- Preparing and collecting permanent records
- Rearranging, summarizing, and classifying financial information
- Preparing information reports and summaries
- Establishing control for honesty and accuracy
Types of businesses?
- Service business
- Merchandising business
- Manufacturing business
- Non-profit business
Forms of businesses
- Sole proprietorship
- Partnership
- Corporations
Categories of Accounting work
- Routine daily accounting activities
- Periodic accounting activities
- Miscellaneous accounting activities
Outer ring
- Transactions occur
- Transactions are recorded in Journal
- Transactions are put into general ledger account
- Trial balance/ Interim financial statement prepared
(always ongoing)
Inner ring
- worksheet prepared
- Former Financial Statements Prepared
- Ledger is adjusted and closed
- Post closing trial balance prepared
(repeats every fiscal period)
What is the accounting cycle
A reoccurring cycle that is carried out every fiscal period
Creditor
Someone you owe
Fundamental accounting equation
A= L+E
Debtor
Someone owes you
what did CICA do?
publish the handbook
created the CPA
designates the CA position
order of liquidity
- Cash
- A/R
- Supplies
- Land
- Building
- Equipment + Furniture
- Trucks
The business entity concept
the business and the owner are separate entities
The cost principle
information should be reported at the purchased rate
the continuing concept
The business and the cost principle will continue to run unless said so
The revaluation model
if a private business chooses to use IFRS, they may change their assets to the market value
The objectivity principle
records must have visible evidence that they are accurate
Source document
the best form of evidence
what happens to a source document after it is recorded
it is kept on file for reference or evidence
business transaction
a financial event that causes a change in financial position
Classified balance sheet
used to gain more insight on a balance sheet (used by ASPE)
Statement of financial position
same as Classified balance sheet but is only used if a private enterprise decides to choose IFRS
4 steps to analyzing transactions
- Determine which accounts are being affected and make the change
- Check to see if the owner’s equity has changed
- Make sure two accounts are affected
- Make sure the equation balances
Financial position
a status of a business based on assets, liabilities, and equity
what is A2
a cell
what is =B10+c17
a formula
what is =sum(b10:b14)
a function
Accounting clerk
usually called a bookkeeper. Associates with the routine activities. (e.g. transactions, payroll, banking, balancing the ledger)
Accountant
more broader skillset, requires higher education. (e.g. prepares reports, interprets data, makes business decision)
father of accounting?
Luca Pacioli
What is Auditing
testing a firm’s records and procedures for accuracy
whats the difference between Public accountants and professional accountants
public serves the public for a fee
A professional accountant may choose?
Management or Institutional
What is a management accounting
working for a large company (e.g. Mcdonalds, Bell)
What is Institutional accounting
working for governments, banks, universities
ASPE
Accounting standards for Private Enterprises (preferred over IFRS in private enterprises)
IASB
International accounting standards board
What did the IASB do
helped develop and approve of the IFRS
what is the AcSB
The CICA committee combined to form a separate government body called the Accounting Standards Board (AcSB). They do their actions independently after consulting with likeminded boards such as the IASB
