Basics of Accounting Flashcards
1
Q
What is Accounting?
A
- A process whereby accountants collect and record data
- They then process data to produce information
- This must be communicated to interested user groups
2
Q
What does an Accountant do?
A
- Monitors Money coming in and going out
- Reports activities and performance- thus supports decision making
- Helps assess benefits to society (CSR)
- Forms a basis for taxation
3
Q
What do Managers use accounting for?
A
Control over a Firm
4
Q
What do Investors use accounting for?
A
- Return on Investment
5
Q
What do Employees use accounting for?
A
- Job security and future planning
6
Q
What do Consumers use accounting for?
A
- Continuation of Supply
7
Q
What do Suppliers use accounting for?
A
- To guarantee payments
8
Q
What do Lenders use accounting for?
A
- To guarantee repayments
9
Q
What do Governments use accounting for?
A
- Monitors how much expected tax
10
Q
What do Competitors use accounting for?
A
- Assess the threat level that is posed
11
Q
What do Communities use accounting for?
A
- The ultimate good- societal wellbeing
12
Q
Name the 6 organisations that produce accounting information
A
- LLCs
- NPOs
- Sole Proprietorship
- Partners
- Clubs and Societies
- Public Sector
13
Q
Which 3 attempts to profit maximise?
A
- LLCs
- Sole Proprietorship
- Partners
14
Q
Which 3 financial organisations attempt to welfare maximise?
A
- NPOs
- Clubs and Societies
- Public Sector
15
Q
Main difference between Financial and Management Accounting
A
- Financial accounting is external, heavily regulated and is often just a general overview
- Whereas managerial is internal, less ‘scripted’ and is often much more specific for what a manager requires
