Extra terms Flashcards

1
Q

internal control

A

is the procedures, policies, processes and systems in place in order to protect a businesses assets and financial records

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2
Q

classifications of businesses

A

merchandising: creates profit by purchasing stock and reselling at a higher price
service: creates profit by providing a service to customers
manufacturing: creates profit through the purchase of raw materials and converting them into products.

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3
Q

types of business ownership

A

sole trader: is an individual who owns a business without a legal entity

partnerships: is considered with 2 or more owners and is unincorporated
company: incorporated body created by law and is a legal entity

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4
Q

monetary assumptions

A

Monetary assumption: any entries in the accounting system must be expressed in units of currency]

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5
Q

Public company

A

Listed on ASX

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6
Q

Private company

A

Small # of shareholders, not listed on ASX

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7
Q

business entity

A

Business entity: when business transactions are separate from personal transitions

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8
Q

going concerned

A

Going concerned: in order to continue to operate the business, all debts are paid when they are due.

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9
Q

historical cost

A

Historical cost: the value of an asset or product is always recorded at the original cost of the first purchase.

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10
Q

accounting period

A

accounting period: trading performance of the business is reported on a consistent time period

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11
Q

double entry

A

Double-entry: always two entries, one debit and one credit so that the accounting system is balanced

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