accounting Flashcards
liquidity order
the order in which assets can be converted to cash ; current assets are listed in order of liquidity
cost principle
assets must be shown on the balance sheet using the cost of the acquisition or construction
business entity principle
each business is considered a separate unit or entity and the financial data for the business must be kept separate from the owners personal financial data
maturity date rule
the date when liabilities are due to be paid; liabilities are listed on the balance sheet according to their maturity date
the three lines on the headings of a balance sheet answer the questions
who what when
the purpose of accounting
The purpose is to provide information for decision making
transaction
any buisness activities that affect the company’s financial statements and status
buisness entity concept
in accounting a buisness or an organization and it’s owners are treated as two separate parties this is called the entity concept
debtor
a person or institution that owes a sum of money
creditor
a person or company to whom money is owed
bookeeping
the activity or occupation of keeping records of the financial affairs of a business
what is a private company
a private company is one that does not have shares traded on the stock market .
what are accounting standards
authoritive standards for financial reporting and are the primary source of generally accepted accounting principles
which standards govern public companies in canada
IFRS
which standards govern private companies in canada
ASPES
what might make a person make the right decision
- law
- business ethics
-professional standards - accounting principles and standards
