chapter 1 Flashcards
what is trading business?
buys from supplier and sell goods to customers
service business?
provides services to customers
name me three types of stakeholders of business
employees, managers , suppliers, managers
employees decisions
whether to continue working for the business
managers decisions
whether to consider ways to improve performance of business
suppliers decisions
whether to sell business on credit
business ownerships
sole proprietership
limited liability partnership
private limited company
accounting information and examples
quantitative factors
measured numerically
examples : cost of inventory
and charges
non accounting information and examples
qualitative factors
examples : nature of business and economic outlook
accounting roles
provide accounting information for stakeholders to make informed decisions regarding the management of resources and the performance of business.
accountant roles
stewards of the business and have management making for accounting and non accounting information.
professional ethics
integrity and objectivity
intergrity
straightforward and honest in all professional relationships
objectivity
will not let bias , conflict of interest or undue influence of others affect their professional judgement.
going concern theory
business is assumed to have an indefinite economic life
objectivity theory
accounting information recorded must be verifiable and reliable evidence , so that financial statement will avoid bias and opinions.
accounting period theory
life of business is divided into regular time intervals
historical cost theory
transactions recorded at its original cost
monetary theory
transactions is measured in monetary terms
accounting entity theory
activities of the business is separated from activities of owners , transactions are recorded at the POV of the business.
treatment of drawings
accounting entity theory
source documents
objectivity theory
