chapter 1

Question 1

what is trading business?

Answer 1

buys from supplier and sell goods to customers

Question 2

service business?

Answer 2

provides services to customers

Question 3

name me three types of stakeholders of business

Answer 3

employees, managers , suppliers, managers

Question 4

employees decisions

Answer 4

whether to continue working for the business

Question 5

managers decisions

Answer 5

whether to consider ways to improve performance of business

Question 6

suppliers decisions

Answer 6

whether to sell business on credit

Question 7

business ownerships

Answer 7

sole proprietership
limited liability partnership
private limited company

Question 8

accounting information and examples

Answer 8

quantitative factors
measured numerically
examples : cost of inventory
and charges

Question 9

non accounting information and examples

Answer 9

qualitative factors
examples : nature of business and economic outlook

Question 10

accounting roles

Answer 10

provide accounting information for stakeholders to make informed decisions regarding the management of resources and the performance of business.

Question 11

accountant roles

Answer 11

stewards of the business and have management making for accounting and non accounting information.

Question 12

professional ethics

Answer 12

integrity and objectivity

Question 13

intergrity

Answer 13

straightforward and honest in all professional relationships

Question 14

objectivity

Answer 14

will not let bias , conflict of interest or undue influence of others affect their professional judgement.

Question 15

going concern theory

Answer 15

business is assumed to have an indefinite economic life

Question 16

objectivity theory

Answer 16

accounting information recorded must be verifiable and reliable evidence , so that financial statement will avoid bias and opinions.

Question 17

accounting period theory

Answer 17

life of business is divided into regular time intervals

Question 18

historical cost theory

Answer 18

transactions recorded at its original cost

Question 19

monetary theory

Answer 19

transactions is measured in monetary terms

Question 20

accounting entity theory

Answer 20

activities of the business is separated from activities of owners , transactions are recorded at the POV of the business.

Question 21

treatment of drawings

Answer 21

accounting entity theory

Question 22

source documents

Answer 22

objectivity theory