Chapter 1 - Accounting And Business Flashcards
What are internal users?
Internal users plan, organize and run a business:
• Marketing managers
• Production supervisors
What are the 5 main accounting activities?
1) Gather financial information.
2) Preparing and Collecting records
3) Rearranging, summarizing, and classifying financial information
4) Preparing information reports and summaries (financial statements)
5) Establishing controls to promote accuracy and honesty among employees
What are external users?
External users are people who work for an organization and have an interest in the financial position of the organization: • Investors • Creditors • Taxing Authorities • Regulatory Agencies • Customers • Labour Unions • Economic Planners
What are the type of businesses?
- Service business
- Retail business
- Manufacturing business
- Non-profit organization
What is a service business?
Sells a service to the public: • Hairdresser • Dentist • Tutoring Service • Accounting Firm
What is a retail business?
Buys goods and resells them at a higher price for profit:
• Sobey’s
What is a manufacturing business?
Buys raw materials, creates a product with the raw materials and then the product is sold to earn profit:
• Paper Mill
• Steel Plant
What is a non-profit organization?
Activities to meet social needs and not for financial profit:
• Charities
What are the forms of ownership?
- Sole Proprietorship
- Partnership
- Corporation
What is a sole proprietorship?
Business owned by one person
What is a partnership?
Business owned by two or more people
What is a corporation?
Ownership of a business is divided into transferable shares
What is CPA?
CPA stands for Chartered Professional Accountant
What is the role of the Accounting Clerk?
Clerical in nature, mainly concerned with bookkeeping:
• Transactions are properly recorded and source documents are present an correct
• Recording and accounting entered + Balancing the ledger
• Payroll calculations + Payroll cheques
• Carrying out all necessary banking transactions
What are the roles of accounting?
- Maintaining the entire accounting system
- Ensure that correct data is entered
- Ensure that GAAP and IFRS are met
- Interpreting the data produced
- Preparing reports based on data output
- Participating in management and assists in decision making
- Supervising the work of all accounting employees
