FAR1C1 Flashcards
What ASC stands for?
Accounting standards council
What organization defines accounting as a service activity, its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision?
Accounting standards council or ASC
What AICPA stands for?
American Institute of Certified Public Accountants
What organization defines accounting as an art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are in part at least of financial character and interpreting the result thereof?
American Institute of Certified Public Accountants or AICPA
What AAA stands for?
American Accounting Association
What organization defines accounting as the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of the information?
American Accounting Association or AAA
What are the three (3) important points in the definition of accounting according to Accounting Standards Council?
1) Accounting is about quantitative information.
2) The information is likely to be financial in nature.
3) The information should be useful in decision making.
What are the three (3) important points in the definition of accounting according to Accounting Standards Council?
1) Accounting is about ** information.
2) The information is likely to be ** in nature.
3) The information should be ** in ** making.
1) Accounting is about quantitative information.
2) The information is likely to be financial in nature.
3) The information should be useful in decision making.
What organization’s definition of accounting has stood the test of time?
American Accounting Association or AAA
What are the three (3) components in American Accounting Association definition of accounting?
1) Identifying as the analytical component.
2) Measuring as the technical component.
3) Communicating as the formal component.
This accounting process is the recognition or nonrecognition of business activities as “accountable” events.
Not all business activities are accountable.
For example, the hiring of employees, the death of the entity president and the entering into a contract are all business activities such events are not accountable because they cannot be quantified or expressed in terms of a unit of measure.
Identifying
When is an event accountable or quantifiable?
An event is accountable or quantifiable when it has an *** on assets, liabilities and equity.
In other words, the subject matter of accounting is ** ** or the ** of economic ** and economic ***.
Only economic ** are ** and *** in accounting.
** and ** matters are beyond the *** of accounting.
An event is accountable or quantifiable when it has an effect on assets, liabilities and equity.
In other words, the subject matter of accounting is economic activity or the measurement of economic resources and economic obligations.
Only economic activities are emphasized and recognized in accounting.
Sociological and psychological matters are beyond the province of accounting.
What are the two (2) types of economic activities?
1) External transactions
2) Internal transactions
What are the two (2) types of economic activities?
1) ** transactions
2) ** transactions
1) External transactions
2) Internal transactions
They are also known as exchange transactions, are those economic events involving one entity and another entity.
external transactions
What are external transactions?
- They are also known as ** transactions, are those ** events involving one ** and ** entity.
They are also known as exchange transactions, are those economic events involving one entity and another entity.
What are the five (5) examples of external transactions?
1) Purchase of goods from a supplier
2) Borrowing money from a bank
3) Sale of goods to a customer
4) Payment of salaries to employees
5) Payment of taxes to the government
What are the five (5) examples of external transactions?
1) ** of ** from a supplier
2) ** ** from a bank
3) ** to a **
4) ** of ** to employees
5) ** of ** to the government
1) Purchase of goods from a supplier
2) Borrowing money from a bank
3) Sale of goods to a customer
4) Payment of salaries to employees
5) Payment of taxes to the government
They are economic activities that take place entirely within the entity. Production and casualty loss are examples of internal transactions.
Internal transactions
What are internal transactions?
They are economic ** that take place entirely within the **. Production and casualty loss are examples of *** transactions.
- They are economic activities that take place entirely within the entity. Production and casualty loss are examples of internal transactions.
It is the process by which resources are transformed into products.
Production
It is any sudden and unanticipated loss from fire, flood, earthquake and other event
Casualty
