Chapter 2 ( dont give up lol) Flashcards
What is accounting information system?
the different stages in the accounting process
What is monetary theory?
business transactions that can be measured in monetary terms can be recorded
What is business transactions?
an activity carried out by the business to provide goods and services in exchange for money
What are the types of business transactions?
Cash transactions , Credit transactions
What is cash transactions?
an activity carried out by the business in exchange for cash( pay on the spot)
What is credit transactions?
an activity carried out by the business but amount not yet received/ given ( pay at a later time)
What is objectivity theory
evidence that certain transactions are taken place
What are source documents?
paper document that provides information of the transactions that has taken place
What are the types of source documents?
Invoice , Credit note , Debit note , Receipt , Payment voucher , Bank statement
What is invoice?
Sent by the seller to state the amount owed by the customer on credit
What is credit note?
Sent by seller to state the amount to be reduced from the invoice issued. Happens when customers are overcharged or customer on credit returns goods
What is debit note?
Sent by seller to customer to state the amount to be added to the invoice issued. Happens when customers are undercharged
What is receipt?
Sent by seller to customer to record cash payment
What is payment voucher
Prepared by customer to record cash payment for credit transactions
What is bank statement?
Sent by the bank to record of all transactions and balance of the business using Cash at Bank.
