Terminology Flashcards
What is ethics
Ethics refer to the socially acceptable or correct way to do something
What is a code of conduct
A code of conduct is a written set of norms and values about how to behave ethically and correctly
What is a code of conduct used for
It is used to regulate the behavior of members of an organization to keep their behavior within acceptable norms and set standards of acceptable behavior to ensure professionalism
What are the basic principles of business ethics
Integrity
Objectivity /Fairness
Professional competence and due care
Confidentiality
Professional behavior/discipline
Leadership
transparency
accountability
sustainability
responsible management
Explain integrity as a principle in ethics
This can be described as a quality that a person possesses to be honest and possess strong moral values
Explain objectivity/furners as a principle in ethics
It is there ability to behave in partially honestly and without prejudice or bias
Explain professional competence and due care as an principle in ethics
Professional competence refers to the ability to your work while and Due care ensures that tasks are done responsibly,carefully,promptly abd diligently
Explain confidentiality as a principle in ethics
This refers to the ability to handle information concerning the business
Explain professional behaviors/ discipline as a principle in ethics
There’s refers to the manner in which a person behaves in the workplace all members need to behave with restraint and ensure that they are actions are governed by the code of conduct at all times
Explain leadership as a principle of ethics
A leader with a responsibility of writing leadership should make sure that their actions and their workers actions comply with the code of ethics/conduct
Explain accountability as a principle in ethic
This means that members of an organization should be prepared to take responsibility for the actions in any situation
Explain sustainability as a principle in ethics
Are you sources used by the business should be replaceable
Explain responsible management as a principle in ethics
People responsible for running the business should behave in a conscientious and trustworthy manner at all times
What are the four building blocks of the King IV report
Ethical culture, good results, effective control, and legitimacy
What is a king ivy report supposed to focus on
It is supposed to emphasize the 3PS which are people planet and profit . The king IV report is mandatory for all companies listed in the JSE
What is a sole proprietorship
It is a business way only one owner contributes all the capital and is entitled to all the profit
What is The Entity principle
This is a principle that stay and the business are two separate persons or entities with separate sets of financial records, assets and liabilities.
Though in a sole proprietorship the owner can be kept liable for all incurred expenses in the name of the business
What is equity and what is the formula to calculated
Owner’s equity is the owner’s stake in the business it is based of how much capital the owner contributed
formula is equity = assets - liabilities
What is another formula for equity
Equity= capital + net profit-withdrawal
What are assets
Assets are possessions of the business
What are non-current assets or fixed assets
These are assets that I use by the business over a long period of time for examples of this are land and buildings, vehicles, equipment
What are financial assets
Financial assets or assets that arise when a business transfers money not needed for a period
What are current assets
These are assets of which the value fluctuate every month and that are relatively easy to convert into cash
What are the current assets in order of liquidity
- Inventory/trading stock- goods purchased to be sold at a profit later
- Debtors control- money owed by debtors to the business
- Savings account- money in a separate bank account with the aim of earning higher interest without a fixed investment period
- Bank money in a current account for daily payment via EFT
- Petty cash- cash amount for necessary cash payments that are made daily
- Cash float- money in the cash register at the beginning and end of everyday
What are liabilities needs to the difference between downtown liabilities and short-term liabilities
Liabilities are parties outside the business to whom the business owes money liabilities equals assets minus equity long-term liability is a debt paid over a period longer than a year and current liabilities are liabilities repaid over a period shorter than a year
What is a crj
This is a journal which records any cash received by the business assault documents are DREC,CRR,B/S
What is a cpj
A journal which records any payments made from the current bank account the source documents are EFT or B/S
What is a pcj
A journal where small cash amounts paid are recorded the source document is PCV petty cash voucher
What is a DJ
A journal which records got sold on fiddle the source document is invoice
What is a CJ
A journal in which any items purchased on credit are recorded the source document is credit note
What is an d a j
A journal which records items return to us by Unsatisfied debtors this was document is a credit note
What is a creditors allowance journal
A journal which records items who you return to creditors the source document is Debit note
What two sections of the general ledgers split up in
The balance sheet section which consists of all accounts used to prefer the statement of financial position
and
the nominal consection which consists of all incomes and expenses use to prepare the statement of comprehensive income
What are the two financial statements in the accounting report is presented in the financial year
Statement of comprehensive income slash income statement
statement and the statement of financial position/ balance sheets
What are examples of daily procedures,
Daily procedures include transactions source document completions subsidiary journals completions posting to debtors and creditors ledgers
What are examples of monthly procedure
Closing of subsidiary journals posting to the general Ledger preparation of trial balance preparation of debtors and creditors list
What are examples of annual procedures
Preparation of financials and analysis and interpretation of financial statement
Why are the go principles important for financial recording
They are understandable relevant reliable useful timely free fire go neutral and consistent and comparable
What are the GAAP principles
Principles that accounting should follow when they prepare their financial statements
Explain the historical cost principle
It is a rule that assets will be valued at the price paid for them originally EG if a building appreciate in value it will still be recorded at the original cost price
Explain the principle of matching
Expenses and income should we recorded in the correct financial period and which the occur this means that if a transaction happens in the previous financial year but they expenses or income or not received then it is still recorded as from the last year even though we have not been received
What is prudence
Businesses having realistic amounts entered and figures
Explain materiality as a principle
Items material enough to affect evaluation or decision should be disclosed separately in the financial statement and all values that appear in the financial statement must have material value
Explain going concern as a principle
Financial statements are prepared on the assumption that the business will continue to operate in the foreseeable future
Explain business entity element
The owner and the business are set as two different persons or entities with different sets or financial records assets and liabilities
Explain business entity element
The owner and the business are set as two different persons or entities with different sets or financial records assets and liabilities
