chapter 1

Question 1

what is a trading business?

Answer 1

buys from suppliers and sell goods to customers
e.g. bookstore, grocery store
has physical goods to sell

Question 2

what is service business?

Answer 2

provide services to customers
example: hair salon, dental, gym

Question 3

what does owners and shareholders do in a business and example of decision needed to make

Answer 3

contribute capital and expect profit distribution in return. whether to continue invest in business or sell business

Question 4

what does managers do in a business and example of decision to make

Answer 4

work for business, devise strategic plans to run business efficiently.
example:consider ways to improve performance of business

Question 5

what does employees do in a business and example of decision to make

Answer 5

work for business, perform executive duties
whether to consider working at the business

Question 6

what does lenders do in a business and example of decision to be made

Answer 6

make money available to business and expect it to be fully repaid with interest
whether to grant loans to the business

Question 7

what do suppliers do in a business and example of decision need to make

Answer 7

supply goods and/ or services to business
whether to sell to business on credit

Question 8

what do customers do in a business and example of decision to make

Answer 8

buy goods and and/ or services from business
whether to buy from business

Question 9

what does the government do in a business and example of decision to make

Answer 9

enforce tax regulations
whether business complies with tax regulations, decide the amount of tax to collect from business

Question 10

what does the competitors do in a business and example of decision they make

Answer 10

sell similar goods and/ or services as the business
whether they are comparable to business, how to improve their own performance

Question 11

what is the roles of accounting

Answer 11

-information system that provides accounting information for stakeholders to make informed decisions regarding the management of resources and performance of business.

Question 12

what is the role of accountants

Answer 12

1. prepare and provide accounting information for decision-making
2. set up accounting information system (AIS)
3. they become stewards of the business and are responsible for managing the resources of the business on behalf of the owners

Question 13

what do accountants have to do

Answer 13

• adapt, solve problems , think critically and provide accounting and non-accounting info for decision-making
• provide timely, credible, relevant information based on accounting theories which are easily and appropriately understood by stakeholders

Question 14

professional ethics

Answer 14

integrity
- to be straightforward and honest in all professional relationships
being objective
- not let bias, conflict of interest or the undue influence of others override his or her professional judgement