Chapter 1 Flashcards
what is the types of business?
trading and services
what is trading?
buy and sell goods
what are the types of business ownership?
sole proprietorship , partnership , private limited company
how many owners does sole proprietorship have and where do they get their funds?
1 owner , personal savings/ friends / family
how many owners does partnership have and where do they get their funds?
2 owners , personal savings / friends family/
how many owners does private limited company have and where do they get their funds?
2 to 50 owners , borrow funds from the bank
what are the roles of accounting?
stewardship and decision making
what do the roles do?
stewardship - manage the resources
decision making - helps to make decisions (literally)
what are the professional ethics?
Integrity (be honest) and objectivity(not being bias)
what are the external stakeholders
Investors , Customers , Suppliers , Government
what are the internal stakeholders
Employees , Owners, Managers
What is the accounting theory?
Accounting Entity , Going Concern , Accounting period , Monetary , Historical cost , Objective , Constitency
What is accounting entity?
Each business is a separate unit form its owner
What is going concern?
The business is to continue unless there is credible evidence that it may close down
What is accounting period?
Divide its life into periods
